ES4325 - Alternative/Private Student Loan

1. Institutional Regulations
   1. DMACC shall make available to eligible students private or alternative educational loans to help pay the cost of an educational expense.
      1. Private student loans are defined as nonfederal loans made (originated) by a lender such as a bank, credit union, finance company, or other extender of credit.
         
         DMACC does not originate or otherwise offer institutional private student loans.
          
      2. Educational expenses for credit seeking students are defined as those outlined with the Student Expense Budget (Cost of Attendance) assigned to the individual student by the Financial Aid Department. Educational expenses for students seeking a non-credit course or program are defined as the cost of tuition and required materials (or are otherwise outlined by the non-credit program).
   2. DMACC shall develop, make available for review, and enforce an institutional Code of Conduct prohibiting conflicts of interest by financial aid office staff related to the administration of private educational loans.
   3. DMACC makes available information regarding private education loans from a lender to current and prospective borrowers, and therefore also must provide the following consumer disclosures:
      1. Information required under section128(e)(1) of the Truth in Lending Act (TILA) for private education loans
      2. Notice that the borrower may qualify for loans or other assistance under the Title IV programs
      3. Notice that the terms and conditions of loans under the Title IV programs may be more favorable than those of private education loans
   4. As outlined within Federal Register, 10/28/09. p. 55630, DMACC will develop and make accessible to current and prospective borrowers an historical lender list. DMACC’s historical lender list is a neutral, comprehensive list of lenders that have made loans to students at DMACC within a three academic year period of time. DMACC’s historical lender list is available for review on the financial aid portion of www.dmacc.edu.
   5. Prior to certification of a private loan, current or prospective borrowers attending DMACC must meet the following eligibility criteria:
      1. All prospective private loan borrowers are recommended to complete the Free Application for Federal Student Aid (FAFSA) for the award year applicable to the student’s term of enrollment. Notification must be provided by the DMACC Financial Aid Department to the student recommending the completion of the FAFSA. Exceptions to this criteria include:
         1. The student is attending a non-credit program not eligible for federal student aid.
         2. The student is attending at a less than halftime enrollment level. A certified private loan for students attending less than halftime shall not exceed $1000 per term at DMACC.
         3. The student is not maintaining Financial Aid Satisfactory Academic Progress as outlined by DMACC ES4300 .
         4. The student is attending DMACC as a “guest” or non-degree-seeking student.
         5. The student is attending a credit program of study that is not eligible for financial aid.
      2. All private loan student borrowers are recommended to complete additional loan counseling other than the federal Entrance Counseling. The method of counseling will be determined by the DMACC Financial Aid Department. Notification must be provided by the DMACC Financial Aid Department to the student recommending the completion of the additional counseling program.
      3. A prospective private loan borrower must be successfully admitted into a program of study at DMACC (or be seeking registration in an eligible non-credit program). Students admitted as Guest or non-degree-seeking must confirm that he or she is not receiving financial aid at another school during the same period of study for which the private student loan is sought at DMACC.
      4. DMACC, at its sole discretion, will determine any non-credit/non-Title IV eligible programs offered by the institution that are eligible for certification of private loan requests. The determination of private loan program eligibility will be made by the Vice President of Enrollment Services, the Director of Financial Aid, and the Program Chair.
      5. Prospective private loan borrowers determined to be eligible by the DMACC Financial Aid Department for Federal Direct Student Loans during the same period of enrollment for which a private loan is sought must be informed by DMACC of the recommendation to utilize their full eligibility for a Federal Direct Student Loan prior to the certification of a private loan.
   6. The certified amount of a private student loan shall not exceed a prospective private loan borrower’s educational expenses less any federal, state, institutional, scholarship or other financial aid resources received. Educational expenses are define in section A, 2 of this policy.
   7. Prospective private loan borrowers will be subject to a cancellation of a certified private student loan should attendance not be established for a period of enrollment during which the scheduled disbursement was to occur. Students choosing to completely withdrawal prior to the census date established for the term will be subject to private loan cancelation.
2. Procedure
   1. Receiving Private Loan Certification Request: Requests for a private loan are received by the DMACC Financial Aid Office via an electronic certification request or via paper form. The electronic certification request is delivered by iLink. On a limited basis, a paper certification request may be received from lenders choosing not to utilize electronic services.
      1. The designated Financial Aid Specialist will be provided access to iLink to support the processing of private loan certification requests. The Specialist will log into iLink at www.ilinksupport.org/
      2. A prospective student borrower’s Admission or program status will be evaluated within Banner. Guest or non-degree-seeking students may only access a private student loan if the private lender selected by the student allows such as part of the lender’s established eligibility criteria.
      3. The designated Specialist will evaluate the student’s financial aid status to determine if the student has applied for financial aid by completing the Free Application for Federal Student Aid (FAFSA) and has been offered or has accepted federal student loans.
         1. In the event a student has not completed the FAFSA for the appropriate award year, notification will be provided to the student as outlined in section I, E, 1. Notification will be sent via a paper Private Loan Disclosure Letter mailed to the student’s address provided within Banner.
         2. If the prospective borrower has been offered federal students loans by the DMACC Financial Aid Office but has not accepted the award, DMACC must make the recommendation that the eligible student consider accept the federal student loan. The recommendation will be sent via a paper Private Loan Disclosure Letter mailed to the student’s address provided within Banner. Exceptions to this policy include:
            1. Students attending a non-credit program
            2. Students not maintaining Financial Aid Satisfactory Academic Progress as outlined by ES4300 
            3. Students no longer eligible for federal student aid due to aggregate limits as identified by the National Student Loan Data System
            4. Students attending less than halftime*
               
               * Students attending less than halftime will be notified of their eligibility for a federal student loan should the student make the decision to increase his or her enrollment level A certified private loan for students attending less than halftime shall not exceed $1000 per term at DMACC.
      4. As outlined in section I, F, a private student loan shall not exceed a prospective private loan borrower’s educational expenses less any federal, state, institutional, scholarship or other financial aid resources received. The designated Specialist will review a student’s cost of attendance as determined by the DMACC Financial Aid Office. The requested private loan amount may be adjusted downward in order to avoid exceeding a student’s cost of attendance.
      5. The maximum private loan amount for students seeking an eligible non-credit program is determined by the DMACC Financial Aid Office and will be based on the identified cost of tuition and required materials (books, etc.) for the non-credit program (or otherwise outlined by the non-credit program).
      6. During the loan certification process, the designated Specialist will ensure the prospective private loan borrower has received the recommendation to complete the additional loan counseling as outlined under section I, E, 2. The recommendation will be sent via a paper Private Loan Disclosure Letter mailed to the student’s address provided within Banner.
      7. Once the request for a private student loan has been successfully certified, the loan will appear within Banner and available for review by the student on the Web Info System. A revised award notification will then be sent to the student via DMACC e-mail
      8. In the event a student selects a lender not previously identified on the institution’s historical lender list (identified in section I, D) the Specialist will ensure the new lender is added.
   2. Receiving a Private Loan Disbursement: Disbursements are delivered to DMACC utilizing an electronic process through iLink. On a limited basis, a paper check may be received from lenders choosing not to utilize electronic services.
      1. The designated Specialist will access a disbursement roster utilizing iLink.
      2. If not already established within Banner, the Specialist will establish the private loan within Banner once the prospective student borrower’s continued eligibility has been confirmed. Loan disbursement amounts will be reconciled to the amounts previously certified by the Specialist.
      3. An electronic record of the disbursement roster will be maintained in order to complete a monthly reconciliation of private loan funds received by the DMACC Business Office.
      4. Students that are over-awarded as outlined in section I, F, will be subject to a reduction of their loan disbursement. Students no longer enrolled at the time of disbursement will be subject to a cancellation of their private loan.
      5. Funds that are required to be returned to the private lender will be returned within 30 days utilizing the policies and procedures outlined by the DMACC Business Office.
      6. Private loan funds are released to the student’s account utilizing the same release of funds schedule established for federal and state aid by the DMACC Financial Aid and Student Accounts Departments.
      7. All private loan funds will be first credited to a student’s account to pay institutional charges including but not limited to tuition, fees, and purchases made in the DMACC bookstore. Credit balance disbursements will be made according to the release of funds schedule utilizing the disbursement method the student has established with the DMACC Student Accounts Department.