Student Loans and Federal Aid
Approximately 35 percent of SIPA students borrow student loans as part of their financing plan. Among members of the graduating class of 2015 who borrowed, the average student loan debt incurred while in attendance at SIPA was approximately $71,200. This section of the SIPA Financial Aid website is to help you learn about federal aid and student loan options, the application procedure, calculating the amount you are eligible to apply for, as well as repayment options, rights and responsibilities.
The SIPA Financial Aid Office staff understands that you are making a significant financial commitment by attending here, and we want to help you make educated choices about student loans as a means of financing your studies. Please read this section carefully and contact us at any time if you have questions.
If you are a US citizen or permanent resident:
- Complete the Free Application for Federal Student Aid, or FAFSA, for the appropriate academic year at www.fafsa.gov. Remember to designate Columbia University as a recipient by using our school code number, 002707.
- After the SIPA Financial Aid Office determines your eligibility, we will send you an email with a link to a portal known as Net Partner, where you will be able to log in and see what loans you qualify for.
- On Net Partner, you will see information about the next steps in the loan application process, including links to online forms you will need to complete. Several of these forms are one-time only, so you will not have to complete them again the following year.
- About a week after completing the required forms, return to the “Documents” tab on Net Partner to confirm our receipt (that screen is not updated in real time).
- If you are interested in loans from private lenders instead of those from the federal government, the FAFSA is not required. Columbia provides a sampling of private loans at http://sfs.columbia.edu/grad-private-loans. To learn about the differences between private loans and those from the federal government and what might better suit your needs, visit http://sfs.columbia.edu/grad-private-loans#fed-direct-grad.
If you are an international student:
- International students may borrow from some lenders in the US if they have a US citizen who can co-sign the loan for them. Go to http://sfs.columbia.edu/grad-private-loans and click on the "Suggested Lenders" link for information on some lenders from whom international students at Columbia University have successfully borrowed.
- International students should not complete a FAFSA, as it is only used to determine eligibility for aid only available to US citizens and permanent residents.
- Some of SIPA’s international students come from countries with student loan programs that can be used for study in the United States; if such loans are available, they may be preferable as they may not require a co-signer.
SIPA students who are US citizens or permanent residents, and who are enrolled on at least a half-time basis (6 credits per semester) may be eligible for one or more of the following aid programs:
- Federal Unsubsidized Direct Student Loans: annual maximum amount available is $20,500, and an origination fee of 1.069% is deducted at the time of disbursement; interest is currently fixed at 5.31% (effective 7/1/16), rates may vary in subsequent years; interest accumulates while in school. Lifetime aggregate limits apply. For more information, go to https://studentaid.ed.gov/sa/types/loans/subsidized-unsubsidized.
- Federal Graduate PLUS Loans: credit-based loan that can be borrowed up to the full cost of attendance minus other aid and loans, and an origination fee of 4.276% is deducted at the time of disbursement; interest is currently fixed at 6.31% (effective 7/1/16), rates may vary in subsequent years; interest accumulates while in school. For more information, go to https://studentaid.ed.gov/sa/types/loans/plus.
- Federal Perkins Loans: available on a limited basis to high-need students as determined by data on the FAFSA; annual amounts typically range from $1,000 to $8,000; 5% interest is fully deferred while in school. As of summer 2016, unless Congress takes action to extend the Perkins Loan program, it will no longer be available after 9/30/16, and only to grandfathered borrowers; we encourage recipients to contact their representatives in Congress to let them know that this is a helpful program for needy students, it is the only federal loan available to graduate students in which interest does not accumulate while you are enrolled. For more information, go to https://studentaid.ed.gov/sa/types/loans/perkins.
- Federal Work Study: available on a limited basis to high-need students as determined by data on the FAFSA; annual earning limits typically range from $4,000 to $5,000. Students whose aid package includes Work Study will receive information about how to locate a job, which may be anywhere on campus (not necessarily at SIPA). Work Study awards are not credited towards students’ tuition as scholarships or loans are. Like any salary from employment, Work Study earnings are potentially taxable income. For more information, go to https://studentaid.ed.gov/sa/types/work-study.
The maximum annual amount available under the Federal Unsubsidized Direct Student Loan program is $20,500. As this does not cover most students’ costs for tuition and living expenses, additional loans are available. Most domestic students at SIPA who need such an additional loan borrow the Federal Graduate PLUS Loan. This loan’s only annual limit is the full cost of attendance (which includes tuition, fees, room and board, books and other miscellaneous expenses) minus all other forms of aid (including scholarships, fellowships, and assistantships), Work Study and loans. Private student loans typically use the same calculation for annual limits as the Graduate PLUS Loan.
Remember that the Unsubsidized Direct Loan and the Graduate PLUS Loan both have fees deducted at the time of disbursement, 1.069% for the Unsubsidized Loan and 4.276% for the PLUS Loan. These fees are subject to annual adjustment due to Sequestration.
Above all, borrow thoughtfully. Review all available resources, including, if applicable, your own savings, assistance from your family, and employer tuition benefits. Apply for all of the outside funding you can, and also carefully examine your own budget and spending habits to see if you can minimize student loan debt. Not all students need to borrow the maximum amount available. Consider the advice, “live like a college student now so you don’t have to later.”
Most student loans come due six months (or 9 months for Perkins Loans) after you graduate or cease enrollment on at least a half-time (6 credits per semester) basis. And for most loans available to graduate students (with the Perkins Loan again being the exception), interest accumulates while you are in school.
The loans most frequently borrowed by SIPA students, the Unsubsidized Direct Student Loan and the Graduate PLUS loan, are both from the federal government, which outsources the loan servicing and collections. You will be repaying one of about ten contracted servicers, to which your loan will be assigned randomly. To find who is going to be servicing your loan, log in to the National Student Loan Data System (NSLDS) at www.nslds.ed.gov using your FAFSA ID. This site will show you details of all of your federal student loans (including anything you borrowed at schools prior to attending SIPA), including your servicer and their contact information.
Do not wait until it’s time to start making your student loan payments to familiarize yourself with the terms of your loans, anticipated monthly payments and the various repayment options. Most people shop for car loans with a monthly payment amount in mind, and you wouldn’t borrow a mortgage without that information either; approach student loans the same way. But also be aware that there are a number of different repayment plans available for federal student loans designed to meet your needs and make your student loan debt manageable. A good resource for loan repayment information is http://studentaid.ed.gov/repay-loans.
If you borrowed a private loan, your lender can provide you with repayment information. Terms such as interest rates and maximum length of repayment will vary depending on lender policies, borrower credit rating, amount borrowed and other factors.
For the narrated slides from the Financial Aid Office's Student Loan Repayment Info sessions, please click here. For a handout from those sessions with additional information about loan repayment, loan servicers and other helpful links, please click here.
Online calculators are available to help you estimate your monthly payments, but first you should familiarize yourself with the different repayment plans. We recommend that you go to http://studentaid.ed.gov/repay-loans/understand/plans to learn about the available repayment options. They include:
- Standard Repayment, in which your loan amount is paid in full in 10 years, with equal monthly payment amount;
- Graduated Repayment, which also requires full repayment in 10 years, but with smaller monthly payments at first that increase over time;
- Extended Repayment, which gives you up to 25 years to repay with smaller monthly payments;
- And several repayments plans tied directly to borrower income, the Income-Based Repayment plan, the Income-Contingent Payment Plan, the Pay As You Earn Plan and the Revised Pay As You Earn Plan. With these plans, monthly payment amounts will change with your income, and you may not qualify for some if your debt is too low in relation to your income. These plans allow 20 to 25 years for repayment.
In all plans, as is the case with any interest-bearing debt, the longer you take to repay your loan, the more interest will accumulate, and the more expensive it will be. Faster repayment always saves money, and are there no penalties for pre-payment.
You do not have to decide which repayment plan you wish to use until it comes time to enter repayment, and you can change plans if your needs change. But it pays to review the repayment calculators (“Quick Links” on the RH side of the page linked above) using different repayment plans to compare the differences in monthly payments. Another good calculator site is http://www.finaid.org/calculators/, scroll down to where you see “Loans” and you will find a number of links to different calculators. This site offers more information about accrued interest, factoring in salary increases, etc.
For a loan repayment comparison chart that illustrates how monthly payments change with a specific loan amount among different repayment plans, as well as amounts that would qualify for Public Service Loan Forgiveness, please click here.
If you borrowed a private loan, your lender can provide you with information about your monthly payment amount. Terms such as interest rates and maximum length of repayment will vary depending on lender policies, borrower credit rating, amount borrowed and other factors. The different income-driven and extended repayment plans available on federal loans are not generally available for private loans.
In 2007, Congress passed legislation that introduced the Public Service Loan Forgiveness Program. This program was designed to encourage students to pursue careers in the public or non-profit sectors by forgiving a portion of their student loan debt. This program could mean considerable savings on loan repayment for many SIPA students.
Borrowers who pursue full-time careers in the non-profit or public service sectors can have their outstanding student loan balance forgiven after 120 months of repayment (payments need not be consecutive, but must be made on time). This program applies to Federal Direct Loans (also known as Stafford Loans), Graduate PLUS loans, and Federal Direct Consolidation Loans only. Borrowers with other federal loans such as Perkins or Federal Family Education Loans may incorporate those loans into a Federal Direct Consolidation Loan so that they qualify for this program.
For more information, contact the Financial Aid Office or visit any of these websites:
Non-profit or public sector employment may include any of the following:
- A Federal, State, county, local, or Tribal government organization, agency, or entity;
- A public child or family service agency;
- Volunteering full-time in the Peace Corps or AmeriCorps;
- A tax exempt 501(c)(3) organization;
- A Tribal college or university; or
- A private non-profit organization that provides any of the following public services:
Public safety or law enforcement
Public interest law services
Early childhood education
Public service for individuals with disabilities and the elderly
Public education or other school-based services
Public or school library services
In most cases the exact nature of the work does not matter, but it cannot include religious instruction, worship, or proselytizing. Work for a labor union or partisan political organization also does not count as public service for purposes of this program, even if they are tax-exempt. Recent legal interpretations have also determined that work at a 501(c)(6), which may include professional trade associations or chambers of commerce, does not meet the qualifications for Public Service Loan Forgiveness.
There are other circumstances under which student loan debt can be forgiven or cancelled.
http://studentaid.ed.gov/repay-loans/forgiveness-cancellation - This site includes a chart that summarizes existing full or partial loan cancellation and forgiveness programs for all federal student loans. These provisions include service in the Peace Corps or AmeriCorps*VISTA program, the military, as a nurse or medical technician, law enforcement or corrections (including public defenders and prosecutors), a Head Start worker, a teacher in certain areas or subjects, child/family services or a provider of early intervention services. Not all forgiveness/cancellation provisions apply to all loans, so review this site for more information if your career goals may entitle you to any student loan relief.
http://www.opm.gov/policy-data-oversight/pay-leave/student-loan-repayment/#url=Overview – Agencies of the federal government may elect to assist employees in the repayment of their student loans, including possibly paying them off for the employee in full. However, this is not guaranteed, it is at the discretion of the employing office/division and is subject to availability of funds.
Another repayment option for federal student loans is to borrow a Consolidation Loan. This option, as the name implies, consolidates existing loans and gives the borrower who may have several different types of loans and multiple servicers or lenders the convenience of one monthly payment to one servicer. You may choose to consolidate all or some of your federal loans through this program. Loans from private lenders do not apply to this program.
Loan Consolidation typically does not save money, and in some cases, some repayment benefits can be forfeited. But in other cases, there are benefits available for Consolidation Loans not available for loans that can be consolidated; it can be advantageous, for instance, to consolidate Perkins Loans if you may qualify for Public Service Loan Forgiveness, which is otherwise not available for Perkins debt. For more information, visit http://studentaid.ed.gov/repay-loans/consolidation.
Most borrowers are eligible for deferment of payment on Stafford/Direct loans, Perkins loans or other educational debt while enrolled on at least a half-time (six points) basis in a degree program. At Columbia, the University Registrar’s Office submits enrollment records for all students to the National Student Clearinghouse, which is then accessed by all student loan lenders. Loan deferments do not begin until your first semester classes begin. Plan to make payments until your lender notifies you that your loan is officially deferred.