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Frequently Asked Questions on US Loans

Q. What is a FAFSA?

The FAFSA is the Free Application for Federal Student Aid. Anyone who requires US federal student aid for college/school/university will need to complete a FAFSA.  The form is submitted to, and processed by, a federal processor contracted by the US Dept. of Education and the results are electronically transmitted to the financial aid offices of the schools that you list on your application. The FAFSA is the application used to determine eligibility for federal aid, including grants educational loans and work study programs.

Q. What is a SAR?

A student Aid Report (SAR) is a summary of information you submitted in your Free Application for Federal Student Aid (FAFSA) and indicates your official Expected Family Contribution (EFC).

Q. What is the EFC?

The Expected Family Contribution (EFC) is used to determine financial need. It’s shown on your Student Aid Report (SAR) which is generated once you complete your Free Application for Federal Student Aid (FAFSA). We ask undergraduates to add the EFC to their Cost of Attendance spreadsheet. The EFC is used to determine ‘need’ and limits the amount that can be borrowed as a Direct Subsidised loan.

Q. What is an MPN?

The Master Promissory Note (MPN) is a legal document under which the borrower promises to repay their loan(s) and any accrued interest and fees to the U.S. Dept. of Education. It also explains the terms and conditions of the loan(s); for instance, it will include information on how interest is calculated, when interest is charged, available repayment plans, and deferment and cancellation provisions.

Q. What is entrance counselling?

Entrance counselling explains the obligations you agree to meet as a condition of receiving a federal student loan.

Q. What is exit counselling?

Exit counselling provides important information you need as you prepare to repay your federal student loan(s).

Q. When can I apply for my federal loans and how long will it take?

We begin processing loans for the new academic year at the beginning of June.

The US loan webpages (including cost of attendance spreadsheets) for the new academic year are updated during May. Please wait for updates to be made before applying for federal loans for the new academic year.

We can usually process your loan(s) in around 2 weeks, although during the peak period (June – October) the process can take longer. Please ensure that you apply in plenty of time.

Q. How do I apply for my federal loans?

Refer to the Application procedure page on the US loans website for the procedure and process to follow in order to apply for federal loans. 

The US loan webpages (including cost of attendance spreadsheets) for the new academic year are updated during May. Please wait for updates to be made before applying for federal loans for the new academic year.

Q. I’ve completed my Free Application for Federal Student Aid (FAFSA) but haven’t heard anything – what should I do?

There are several steps to completing a federal loan application, other than completing a FAFSA. Refer to the Application procedure page for the process to follow.  

The US loan webpages (including cost of attendance spreadsheets) for the new academic year are updated during May. Please wait for updates to be made before applying for federal loans for the new academic year.

Q. How much can I borrow?

The maximum amount you can receive in loans cannot exceed the yearly cost of attendance less any other financial aid you may be receiving.  

Refer to the Cost of attendance page for cost of attendance spreadsheets and costs that can be included. You decide how much you want to borrow up to the maximum available. 

The US loan webpages (including cost of attendance spreadsheets) for the new academic year are updated during May. Please wait for updates to be made before applying for federal loans for the new academic year.

Q. I’ve applied for a scholarship/award etc. should I wait to hear back before applying for my federal loan(s)?

You can apply for federal loan(s) before hearing back about applications made in relation to scholarships/awards etc. Although please  ensure that you inform our office as soon as possible if you receive confirmation of any scholarships/awards etc. after your loan(s) have been certified/approved as we may need to adjust your loan(s).

Q. Do I have to reapply for federal loans for each year of my programme?

If your course is more than one academic you will need to reapply for federal loans for each year of study. This means you’ll need to complete a new FAFSA application, new MPN(s) (your MPN is only valid for one year if attending a school outside the United States), a new PLUS application (if taking a PLUS loan) and a new cost of attendance spreadsheet for the relevant year of study.  Please ensure that you use your college’s school code on all documentation completed and attach all required documentation to your e-mail as instructed on the Application procedure page before sending it to the Student Loans e-mail address.

Q. How do I complete the financial undertaking form to indicate that I am/will be taking loans?

On the University of Cambridge’s Graduate Admissions Office Financial Undertaking form there’s a section that says the following:

 ‘Please tick at least one of the boxes below, as appropriate to your circumstances, and then sign and date the form.’

On this section you need to tick either ‘A’ to confirm that you will be responsible for both the payment of all your fees and for funding your living costs. Or ‘B’ (only if you have received a part-cost award as listed on that page) to confirm that you have received a part-cost award as listed (on that page), and will be responsible for the remainder of your fees and/or living costs.

Q. What proof of funding will I receive for visa purposes?

Once your federal loan(s) have been processed and completed in our office we'll send you an e-mail and we’ll attach a copy of your 'Notification of Student Loan’ letter which will tell you how much you will receive in loans and when you will receive them.

The original ‘Notification of Student Loan’ letter will be posted out to you and will be sufficient for proof of your loan amounts for the academic year for the purposes of applying for your visa.

Q. How long does it take to receive the ‘Notification of Student Loan’ letter?

The original ‘Notification’ letter will be posted out to your home address (mailing address if different to home address). If you live in the United States please allow up to 10 days for it to be received.

Q. My college has requested full payment of all fees on arrival. How can I do this if my federal loan disbursements are split over each term?

Colleges are aware of US regulations and special dispensation is made for students funding their studies using US federal loans. Your college will arrange for your fees to be paid in equal instalments in line with your US loan disbursements.

Q. Who do I need to provide bank account details to for my maintenance/living expenses to be paid to over to me?

Please provide your UK bank details to your college’s bursary/accounts/finance office as soon as possible. If you require your college to hold onto the maintenance/living expenses portion of your loan disbursement; in order that they can assist you with managing those funds, please inform your college’s bursary/accounts/finance office as soon as possible.

Q. When will I receive my next loan disbursement?

Disbursement of federal loan funds is made in three equal instalments, one at the beginning of each term. Refer to the e-mail sent to you once your loan(s) were certified by our office for disbursement information. Before draw down we ask the colleges to provide/confirm information to us to enable us to comply with US regulations in relation to draw down. This includes confirming that they have their students UK bank account details. At the beginning of each term please ensure that your college is aware that you have remained in Cambridge/returned to Cambridge and respond promptly to any e-mails sent to you by your college’s bursary/finance/accounts office. This is in order to minimise any delay in drawing down loan funds for your college at the beginning of term.

Q. When will I be paid my maintenance/living expenses?

You will receive an e-mail once your loan funds have been drawn down. Your college will pay over any maintenance/living expenses due within 14 days of the day that the loan funds have been received into their college’s bank account.  

Q. Can I be paid in US$’s?

No it isn’t possible to keep loan funds in US$’s. The loan funds are received by Western Union who convert the US$’s to £’s sterling and then deposit the loan funds into the appropriate college's sterling bank account.  It isn’t possible for an individual student's loan funds to be separated out, kept in US$’s and sent to a college (to keep in US$’s) or sent to a student’s individual US$ bank account.

Q. Can the loan funds be paid direct to my account instead of going to the college’s bank account?

No federal loan funds are drawn down in a lump sum per college and paid via Western Union direct into the appropriate college’s sterling bank account and cannot be paid directly into an individual student’s bank account.  

Q. What rate will I receive on my loan disbursement?

Western Union determine the exchange rate on the day they receive US$ loan funds drawn down from the US Dept. of Education. We’re only advised of the rate being used by Western Union when we receive the e-mailed notification on the day they post US$ loan funds to a college’s £’s sterling bank account.

Western Union don’t charge any additional commission or a transaction fee for processing funds received by them from the US Dept. of Education.

Q. What happens to my federal loan(s) if I intermit/degrade (undergraduates)/withdraw/submit my thesis early?

If you submit a thesis (earlier than the date recorded on CamSIS)/intermit /degrade (undergraduates)/withdraw during a term for which you have received a federal loan disbursement having completed 60% or less of that term loan funds may be required to be returned to your lender. If the university has to return any of your loan funds received it may be possible that you will be requested to reimburse those funds.

For further information please refer to ‘Leave of absence’, ‘Withdrawing and return to Title IV policy’, ‘Submitting a thesis early – information for PhD students’.

Please inform our office as soon as possible if you are planning on submitting a thesis (earlier than the date recorded on CamSIS)/intermitting /degrading (undergraduates)/or withdrawing during a term for which you have received a federal loan disbursement.

Q. How do I ensure my enrolment status is reported to the US Dept. of Education?

If you are taking US federal loans we will confirm your attendance online through the National Student Loan Data System (NSLDS) as required by US regulations.

Q. How do I increase my federal loan(s)?

Please send an e-mail (minimum of 21 days before your next instalment is due (so that we have time to make the adjustment)) to StudentLoans@admin.cam.ac.uk  to include an updated cost of attendance spreadsheet listing any additional costs required, along with an e-mail with a brief explanation of any changes made and how much you require. If the increase is approved the additional funds will be split across your remaining instalments.

Q. How do I decrease my remaining federal loan(s)?

Please send an e-mail (minimum of 21 days before your next instalment is due (so that we have time to make the adjustment)) to StudentLoans@admin.cam.ac.uk  detailing the amount of the decrease in US$’s and when this is to take effect.

Q. How do I cancel my remaining federal loan(s)?

Please send an e-mail (minimum of 21 days before your next instalment is due (so that we have time to make the adjustment)) to StudentLoans@admin.cam.ac.uk advising that you wish to cancel your remaining loan instalments.

Q. If I haven’t used my full federal loan(s) can I return what I haven’t used?

If you still have remaining instalments you should consider reducing/cancelling these instalments instead.

Loan funds that have been disbursed will have already been received in sterling and will need to be converted back to US$’s at the conversion rate of the day of return (this will not be the same rate that funds were received). You may need to pay fees and bank charges associated with returning the funds to your loan servicer. You may also need to provide proof of alternative funding to your college, to show that you are still able to pay your fees and living costs in full.

In order to return loan funds (if reducing/cancelling isn’t an option/you have no remaining loan instalments) please refer to ‘How to Repay Your Loans’ as you’ll need to arrange to return funds yourself to your Loan Servicer.

Q. When will my federal loan(s) go into repayment?

Federal loans go into repayment from the date that your enrolment on the National Student Loan Data System (NSLDS) drops to below half-time & any grace periods on your federal loans will also be effective from that date.

Q. How do I make a federal loan repayment?

Please refer to ‘How to Repay Your Loans’ where there is information on how, when and to whom you make your federal loan payments.

Q. Who is my federal loan Servicer?

Federal loan borrowers are assigned a loan servicer after the first disbursement of their loan. Your loan servicer will contact you directly after you receive your first disbursement.

Contact your loan servicer with questions about repayment.

Q. I’ve applied for a Private US loan when will I receive the funds?

Private loan applications (with Sallie Mae) must not exceed 180 days between the application and disbursement date. If your course begins in the Michaelmas term please don’t apply for your loan before the beginning of May and note that the first disbursement will not be made before the start of your first term.

Refer to Private loans for further information.

Federal loans generally have more favourable terms and conditions than private loans, if eligible for federal loan(s) please ensure you check interest rates, compare terms and conditions and thoroughly investigate the possibility of taking out federal loan(s) before applying for a private loan.