Federal Direct Loans

U.S. citizens and U.S. permanent residents can finance their education through the Federal Direct Loan Program - up to $20,500 annually may be borrowed (minus a 3% origination fee). Those students demonstrating financial need, assessed through the FAFSA (Free Application for Federal Student Aid) process, may borrow $8,500 in a subsidized loan (no interest is charged while the student is in school) and the remaining amount in an unsubsidized loan (interest is charged while the student is in school). Those who do not demonstrate financial need can borrow the full $20,500 in an unsubsidized loan.

The Direct Loan has a fixed interest rate of 6.8%, and is the same whether the borrower is in-school, grace, or deferment period.

While students are urged to file for aid by March 2, one can still apply after that date for Direct Loan consideration. The FAFSA Federal School Code for Berkeley is 001312. Beginning January 1, 2007, U.S. citizens and U.S. permanent residents file the 2007-2008 FAFSA (Free Application for Federal Student Aid) via the web at http://www.fafsa.ed.gov. The FAFSA asks for your (and spouse, if married) total 2006 calendar year taxable and nontaxable income, federal tax paid, and the current value of your assets, excluding primary home equity and retirement accounts. Refer to the tips at 2007-08 FAFSA .

Eligibility is based on student status and cost of education, not credit history. The FAFSA data will be evaluated to determine your Student Contribution (SC). Your SC and other resources (e.g., employer support, etc.) are then subtracted from your cost of education; the difference is your financial need. If your SC is greater than your cost of education, you will not qualify for need-based financial aid (Federal Direct Subsidized Loan); however, you may borrow a non-need-based loan (Federal Direct Unsubsidized Loan or private student loan).

Repayment begins after the grace period of six months following graduation or dropping below half- time enrollment (6 units). Repayment is made over a 10-25 year term with no prepayment penalty. Complete information can be found at http://www.ed.gov/offices/OSFAP/DirectLoan/about.html. Further details are available with your online Direct Loan Master Promissory Note and online Entrance Counseling.

Deferment of Prior Education Loans
For most federal education loans (such as the Federal Direct, Federal Stafford, or Federal Perkins Loans), you may defer your loan payments while you are enrolled at least half-time at Haas. Obtain a loan deferment form from your lender or loan servicer and submit it to the Haas Financial Aid Office, S420L. Once you are registered and the add/drop period for the current term is passed (usually the fifth week of the term), the UC Berkeley Office of the Registrar will verify your registration on the deferment form. Unfortunately, Haas cannot provide the verification for you. You will need to repeat this procedure each semester and, depending on loan payment due dates, may need to make loan payments in August and September as enrollment verification is somewhat delayed.

Loan Exit Session
If you have borrowed a federal or private loan for study at Haas, you will be required to complete a loan exit counseling session online prior to graduation. Repayment plans, electronic debit option, loan consolidation and other important information will be reviewed.

After receiving the Financial Aid Award Notification, log on to the BearFacts system to accept or decline your financial aid awards.

If you have not received a Federal Direct Loan since 1999 (at UC Berkeley), complete the online Master Promissory Note. Follow the instructions on the website carefully. UC Berkeley cannot apply your loan award to your Campus Accounts Receivables System (CARS) account until we receive electronic notification that you have completed your promissory note. Students who have received funds from a Federal Direct Loan in the last three years have already fulfilled this requirement.

If you have not previously borrowed a Direct Loan at UC Berkeley, federal regulations also require that you complete an online Entrance Counseling session before funds can credit your account. If you successfully pass the quiz, UC Berkeley will receive electronic notification that you have completed the Entrance Counseling requirement.

Once all documents are properly executed and you are enrolled for at least 6 units, then your federal financial aid will credit your CARS account. However, if your aid is not enough to fully cover your registration fees (this is true for Evening & Weekend Program MBA students), then you must personally pay the remaining balance by the due date or risk incurring a Deferred Payment Plan charge ($40) and a late charge ($50).

Suggestions to Simplify Things:

1. Sign up for Electronic Funds Transfer (EFT) - if there is a remainder from your federal or private loan, the University can directly deposit the money in your bank account. You must sign up for EFT at least seven business days before expecting to receive financial aid. This option is strongly recommended. File online at eftstudent.berkeley.edu.
2. Be sure BearFacts has valid local and permanent mailing addresses for you at all times.
3. If you do not understand your financial aid correspondence, please stop by to talk to Charles. Do not just ignore the bill, letter, or whatever. These matters do not resolve themselves.

Financial Aid Contact Information
Charles Conn
Assistant Director, Financial Aid
Haas School of Business
Student Services Building 420L
University of California Berkeley, #1900
Berkeley, CA 94720-1900
(510) 643-0183
finaid@haas.berkeley.edu

More About FAFSA (Free Application for Federal Student Aid) >

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