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Q. What kinds of loans are available? A. The U.S. Department of Education offers federal student loans (Federal Direct Stafford Subsidized and Unsubsidized, Parent PLUS and Grad PLUS loans). BND offers an alternative student loan called the Dakota Education Alternative Loan (DEAL). The DEAL loan provides students with an outstanding alternative loan option when they are unable to obtain adequate funds through federal student aid programs. Q. What is the difference between a Federal Direct Stafford Subsidized Loan and an Unsubsidized Loan? A. Subsidized means the government pays the interest that accrues on your loan while you are in school, for the first six months after you leave school and if you qualify to have your payments deferred. The government approves subsidized loans based on financial need. Unsubsidized means you are responsible for paying all interest that accrues. You can receive both subsidized and unsubsidized loans for the same enrollment period as long as you don't exceed the annual loan limits. Q. Should I apply for a federal student loan or an alternative loan?A. Students should discuss all of the financing options that are available to them with their Financial Aid Office. BND strongly encourages students to maximize scholarships, grants, and federal student loans such as Stafford loans before applying for a DEAL loan. Q. Can I apply for a DEAL loan if I did not complete the Free Application for Federal Student Aid (FAFSA)? A. No. The only exception to this requirement is if you are attending school less than half-time. Everyone else must complete the FAFSA in order to identify other forms of financial aid that may be a better option for you. A. Yes. We have an online loan application for our DEAL loan. Contact your school for instructions on completing a Federal Stafford (subsidized and unsubsidized), PLUS and Grad PLUS loan application. Q. Can I go online to check the status of my application after I submit it? A. Yes. Log in to our secure website at “Manage Your Loan” to see the status of your loan application and find out when your loan will be disbursed. Q. If I prefer to complete a paper loan application, may I fax that to BND? Q. How will I get the money?
Your loan must be used to pay for tuition, fees, room and board, and other school charges. Any remaining funds will be distributed to you by the school. RepaymentDuring a forbearance or deferment period, interest continues to accrue. Any unpaid interest is capitalized (added to the principal balance) at the end of the forbearance or deferment period. Once interest is capitalized, interest accrues on the new principal loan balance. Below is an example of the effect of capitalization. These examples are based on a 12-month forbearance period. In Example 1, interest is paid during the forbearance period. In Example 2, interest is not paid and is capitalized at the end of the forbearance period.
A. Repayment of your Federal Direct Stafford loans (Subsidized and Unsubsidized) and your DEAL loans begin when your grace period expires. You will receive a one-time grace period which begins when you drop below a half-time enrollment status and lasts for six months. The first payment is due after the grace period ends. Be aware that for a Federal Direct Stafford Unsubsidized loan or a DEAL loan, interest accrues while you are attending school and during your six-month grace period. Any unpaid accrued interest is capitalized (added to your principal balance) when the loan enters repayment. DEAL loans (for less than half-time attendance) enter repayment when the loan is fully disbursed. A. Yes. Every month since your loan was disbursed, BND has reported the status of your loans to the consumer reporting agencies. BND will continue to report information about your payment history to the consumer reporting agencies each month until your loan is paid in full. A. Yes. Although not required, BND encourages you to make payments while you are in school if you are able. Payments received will first be applied to unsubsidized accrued interest, if any, then to your principal balance. Q. Do I have to send in a check or are there other ways for me to make my monthly payment? A. BND offers you several options for making your monthly payment. You may even be able to reduce the interest rate of your loan. Learn more about ways to make your payment. A. Payments are applied in this order:
Unless you notify us differently, additional payment amounts equal to or greater than your monthly payment amount will be applied to advance the next scheduled due date. Q. How does interest accrue on my student loan(s)? A. Interest accrues daily on the unpaid principal balance of your loan. We use a simple daily interest calculation to determine accrued interest for each day: Interest rate X current principal balance ÷ number of days in the year = the amount of interest that accrues on your loan each day. Q. Are there any special options available to people serving in the military? A. Yes. Military deferment options and an interest rate reduction may be available. BND will reduce the interest rate to 6% on any eligible student loan. The reduction lasts as long as you are on active duty, provided the loan was obtained prior to the date that active duty began. In order to take advantage of this benefit, you must give written notice to BND requesting the reduction and send copies of your military orders. This notice must be given no later than 180 days after you leave active duty. For federal student loans, the 6% interest reduction only applies to borrowers in military service as of August 14, 2008. According to the Department of Education, borrowers may not receive a refund of interest paid in excess of the 6% limit before August 14, 2008. Contact BND for additional information on these benefits. DelinquencyQ. What should I do if I can't make my payments? A. Contact BND at 800-472-2166 ext. 5660. Many different options are available to assist you if you are having difficulty repaying your loan. These options include:
You should contact BND to find out which option would be best for you. Q. What is a forbearance? A. A forbearance allows you to make a smaller monthly payment or to temporarily postpone repayment by choosing a no payment option. Be careful – the loan balance can increase very quickly if you use a no payment forbearance option! Q. What is a deferment? A. A deferment allows you to postpone repayment of your loans when you meet specific eligibility criteria defined by the Department of Education (DOE). Interest on subsidized loans is paid by DOE during eligible deferment periods. Interest that accrues on unsubsidized loans is your responsibility and any interest that is not paid will be added to your loan balance when your deferment ends. Q. What happens if I am late in making my loan payment? A. If you are more than 15 days late, you will be assessed a late charge. If the delinquency continues and your loan becomes 30 days late, BND will report your late payment(s) to the credit bureaus (also known as consumer reporting agencies). If the delinquency continues for 270 days, you will default.
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