This discussion was created from comments split from: Federal Student loan rates drop after July 1st. Which rate will my incoming freshman get?.
We received a bill from the college our son is attending from August (2019-2020). He is only child so we are going through everything first time. The amount of both federal student loans ($5500) weren’t subtracted from the bill. According to school, our son hasn’t completed a loan agreement in FAFSA yet (even though he clicked when he accepted an offer from the college) and he needs to do it before first semester starts in August. Since our son is out of the country for next 4 weeks, we need to pay in full to meet a deadline and should get a credit for first semester ($2750) in our student account. Does this sound right in general?
If you pay the full cost of the fall term, your kid can borrow the $5,500 for second semester and apply it toward that bill then.
Your son has NO internet access? He needs to complete a master promissory note for his loan and do the entrance counseling. He can do this from any computer in the world.
But yes…if you pay in full, and he later completes his loan application requirements, the money will be sent to his college…and could be refunded to him whenever the school processes those refunds.
Thank you! Well, he does have an internet access but he is in a very intensive summer program currently (not vacation kind) with very limited free time. Hope, he can complete it online within a week or so but if he can’t, he can complete when he returns but before fall semester starts, then we can get a credit eventually.
Your credit will only be around $2,721 as the origination fee will be subtracted first.
Oh, good to know. Thank you! Is my son going to complete federal loans process twice a year for two semester? Or only once for an academic year?
Once for the academic year.
He just needs to do the master promissory note (and pre-loan online program) once, and then he’ll agree to the terms of the loan every semester when he accepts the loan. He’ll probably accept the loans for both semesters every summer.
None of this takes a long time. When he gets back from his program, he can do it. There may be other online pre-orientation forms he needs to complete too. My daugther had some on drug training before she could move into her dorm.
It is likely the school will show the loan amounts as ‘pending’ and you won’t have to pay upfront. My daughter had funds from the state that weren’t actually paid to the school until a few weeks after the semester started, but they were always credited to the bill and we didn’t have to pay those amounts to the school unless they never came in.
I, um, might know someone who clicked all these forms just to speed up a process…with student’s consent…possibly. Not that I’d advocate that.
Hopefully you and your child can talk about prioritizing time for more immediate/important items. My S did this in less than an hour which included entrance counseling about how much interest costs for loans.
An update—- As soon as my son came back from an intensive summer program, he completed required process for federal student loans so we got an credit back / refund (minus $28: like what mommdc mentioned). We just confirmed last night. He will need to do this every summer (June or July). Thank you, all!
Thanks for the update.
My kids only had to do the entrance counseling and master promissory note the first year they took federal student loans.
They did however have to accept their loans in the student financial aid portal every year.
Some schools do multi- year MPNs while others may require them to be completed annually. Loan amounts need to be accepted annually.
It’s June. My son is going to be sophomore and his college will be sending us a bill in July. Is master promissory note for federal student loans only for entrance / freshman year?
It varies by school. Some are one-and-done, while others want a new MPN each year. He needs to check his school requirements. It should be on the financial aid instructions page of the website and/or in his final aid requirements in his online financial aid info.
kelsmom—
An update. My son asked his college FA department about master promissory note for his second year federal students loans ($6500). He was told that he wouldn’t need to do. So, his college is one-and-done.