A loan is a form of financial aid that must be repaid, usually with interest. The two types of educational loans that presently available to NEC students are the Federal Stafford Loan (for students) and the Federal PLUS Loan (for parents or graduate students). Each of these loans has specific regulations and interest rates that are set and monitored by the Department of Education.

Alternative loans are also available. However, they are not associated with the federal government and are offered directly through lenders; alternative loans normally carry a higher interest rate than federal loans.

Loans for Students

Federal Direct Stafford Loan

The Direct Stafford loan is a low-interest federal loan that is made to the student; the student is responsible for repayment. There are two types of Stafford loans: subsidized and unsubsidized. To qualify for a subsidized Stafford loan, a student must demonstrate financial need. The federal government pays the interest on subsidized Stafford loans while the student remains enrolled at least half-time. If a student does not demonstrate financial need, he or she will qualify for an unsubsidized loan. Unsubsidized Stafford loans accrue interest while the student is in school; the student may pay the interest periodically while in school or capitalize it and repay it along with the principal. Loan repayment begins six months after the student ceases to be enrolled at least half-time.

Eligibility

The Financial Aid Office uses your FAFSA results to determine your eligibility for a Subsidized Federal Stafford loan. To be awarded a Stafford loan, a student must

  • be a U.S. citizen or permanent resident
  • enrolled at least half-time
  • not be in default on a prior student loan
  • not have been convicted of a drug offense while receiving federal financial aid

Loan Limits

Annual loan amounts are based on your grade level and dependency status. If your subsidized eligibility is not the full amount you are eligible to receive based on your grade level, you may be awarded the remaining amount in unsubsidized Stafford loan funding. Because you may borrow more than your cost of attendance, minus any other Financial Aid, you may be awarded less than the annual maximum amount. Annual loan limits are as follows:

Dependent undergraduate students:

  • Freshmen: $5,500 (including up to $3,500 subsidized)
  • Sophomores: $6,500 (including up to $4,500 subsidized)
  • Juniors and Seniors: $7,500 (including up to $5,500 subsidized)

Independent undergraduate students (Am I independent?):

  • Freshmen: $9,500 (including up to $3,500 subsidized)
  • Sophomores: $10,500 (including up to $4,500 subsidized)
  • Juniors and Seniors: $12,500 (including up to $5,500 subsidized)

Graduate students: $20,500 (UNsubsidized only)

Interest Rates & Fees

For 2012-2013, the interest rate for subsidized Stafford loans (which are only for undergraduate students) only is fixed at 3.4%. The interest rate for all unsubsidized Stafford loans is fixed at 6.8%.

Application Process

To apply for a Stafford Loan, you must first submit the Free Application for Federal Student Aid (FAFSA). When your FAFSA and Financial Aid file are complete, the NEC Financial Aid Office will review your file and send you an award letter detailing your eligibility for a Stafford loan, as well as other types of financial aid.

To apply for a Direct Stafford loan, all borrowers must also complete a Direct Stafford loan Master Promissory Note (MPN). An MPN is a legal document in which you promise to repay the loan, plus any accrued interest and fees, to the lender. The MPN also explains the terms and conditions of the loan. NEC participates in the Federal Direct Student loan program. To complete your application for a Direct Stafford loan, please visit the following site:

Go here to complete your Direct Stafford loan Master Promissory Note online

The Direct Loan servicer will notify the Financial Aid office electronically when your MPN is complete. After both the MPN and Entrance Counseling (see below) have been completed and your financial aid file is otherwise complete, the net amount of his or her loan will be credited to the student’s account with the NEC Business Office.

Entrance Counseling

All Direct Stafford loan borrowers must complete Entrance Counseling before loan funds can be sent to the school.

Go here to complete your student loan Entrance Counseling online

The Counseling session takes approximately 15 minutes and will be followed by a short quiz. The Direct Loan servicer will notify the Financial Aid office electronically when your Entrance Counseling is complete. After both the Entrance Counseling and the MPN (see above) have been completed and your financial aid file is otherwise complete, the net amount of his or her loan will be credited to the student’s account with the NEC Business Office.

Loan Disbursements

Federal Student Aid regulations mandate that all students cannot have their federal aid disbursed onto their student accounts until the first day of classes. Students are expected to plan accordingly. Students who borrow loan funds to cover living expenses will not receive refunds until three business days from the date that loans are posted onto their student account. Therefore, for planning purposes, students should not plan on getting a refund check until approximately the second week of classes.

Exit Counseling

All Direct Stafford loan borrowers must complete Exit Counseling before entering repayment. You will be required to use your Department of Education issued PIN (which you used to file the FAFSA). You may request a PIN online at www.pin.ed.gov.

Go here to complete your student loan Exit Counseling online

Repayment

There are four repayment plans available for Federal Stafford loan borrowers: Standard Repayment and three alternatives. Each of the alternatives has a lower monthly payment than Standard Repayment, but this extends the term of the loan and increases the total amount of interest repaid over the lifetime of the loan. These plans are as follows:

  • Standard Repayment: Under this plan you will pay a fixed monthly amount for a loan term of up to 10 years. Depending on the amount of the loan, the loan term may be shorter than 10 years. There is a $50 minimum monthly payment.
  • Extended Repayment: This plan is like standard repayment, but allows a loan term of 12 to 30 years, depending on the total amount borrowed. Stretching out the payments over a longer term reduces the size of each payment, but increases the total amount repaid over the lifetime of the loan.
  • Graduated Repayment: This plan starts off with lower payments which gradually increase every two years. The loan term is 12 to 30 years, depending on the total amount borrowed. The monthly payment can be no less than 50% and no more than 150% of the monthly payment under the standard repayment plan. The monthly payment must be at least the interest that accrues, and must also be at least $25.
  • Income-Contingent Repayment: This plan pegs the monthly payments to a percentage of gross monthly income. The loan term is 10 years.
  • Income-Based Repayment: This new repayment plan, which took effect in July 2009, is intended as an alternative to income-sensitive repayment. The plan caps monthly loan payments based on income and family size, and forgives any debt and interest remaining after 25 years of payments. The monthly payment amount is adjusted annually, based on changes in income and family size. In certain cases, under this plan, payments may be as low as $0/month. The loan term is up to 25 years. For more information about Income-Based Repayment, or to calculate your eligibility, please visit the Department of Education's ICBR fact sheet or use this ICBR Calculator.

Federal Graduate PLUS Loan

The Direct Graduate PLUS loan is a low-interest federal education loan available to graduate students to help pay for the student’s educational costs. Applicants with no adverse credit history may apply for up to the cost of education (for one academic year at a time), less any other financial aid.

Eligibility

Unlike other federal student loans, PLUS loan borrowers must meet their lender's minimum credit requirements. Applicants unable to meet the PLUS credit criteria may be able to borrow with a creditworthy “endorser” (the endorser cannot be released from the repayment obligation before the loan is repaid in full). To be awarded a Graduate PLUS loan, the student must

  • have a valid Free Application for Federal Student Aid (FAFSA) on file with the Financial Aid Office
  • be a U.S. citizen or permanent resident
  • be enrolled at least half-time and be otherwise eligible for federal student aid
  • not have a federal government judgment lien on his or her property
  • not owe an overpayment on a federal education grant or be in default on a previous federal education loan unless he or she has made satisfactory arrangements to repay the grant overpayment or loan
  • not have adverse credit history (i.e., no more than 90 days late on any debt and no defaults, bankruptcies or other adverse action on any Title IV debt)

Interest Rates

The interest rate for Direct Graduate PLUS loans is fixed at 7.9%; interest begins to accrue on the date of the loan's first disbursement. Loan funds are disbursed directly to NEC. Direct PLUS loan borrowers must also pay a loan origination fee of 2.5%. Note: your lender deducts this fee before disbursing any loan money, so the loan amount disbursed will be less than the required repayment amount.

Application

To apply for a Direct PLUS loan for the first time, you must complete a Direct PLUS loan Master Promissory Note (MPN). An MPN is a legal document in which you promise to repay the loan, plus interest and fees, to the lender. The MPN also explains the terms and conditions of the loan. Typically, once your MPN has been submitted and accepted by the lender, you will not have to complete a new MPN to obtain future PLUS loans.

Go here to apply for a Graduate PLUS loan online.

Upon application, the Department of Education will check your credit history; to be eligible for a PLUS loan, you must not have an adverse credit history.

Disbursement

For students enrolled for a full year, the Direct PLUS loan funds will be sent to NEC in two equal disbursements (typically, one at the start of each semester). NEC will first credit loan funds to the student’s NEC account to pay for billable charges. (tuition, fees, room, board, etc.). If the loan disbursement amount exceeds your charges, NEC will refund you the remaining balance of the disbursement.

Repayment

After disbursement, PLUS loan borrowers may contact their loan servicer to arrange repayment immediately (based on a standard 10 year repayment plan), or pay interest only, or defer repayment until s/he is no longer enrolled at least half time.

Loan Limits

Applicants can borrow any amount up to NEC's Cost of Attendance (see page 11 of NEC's Financing Your Education guide), minus any other financial aid awarded. Because Federal PLUS loans are not need-based, the funds may be used to cover the applicant's Expected Family Contribution (EFC).

Entrance Counseling

All Direct Graduate PLUS loan borrowers must complete Entrance Counseling before loan funds can be sent to the school.

Go here to complete Graduate PLUS loan Entrance Counseling online

The Counseling session takes approximately 15 minutes and will be followed by a short quiz. The Direct Loan servicer will notify the Financial Aid office electronically when your Entrance Counseling is complete. After both the Entrance Counseling and the MPN (see above) have been completed and your financial aid file is otherwise complete, the net amount of his or her loan will be credited to the student’s account with the NEC Business Office.

Federal Perkins Loan

The Federal Perkins Loan is a low-interest loan program for students with exceptional financial need. The Perkins loan program is a campus-based loan program, with NEC acting as the lender using a limited pool of funds provided by the federal government.

Application

Go here to download/print a copy of the Perkins Loan Master Promissory Note.

If you have been awarded a Perkins loan for 2011-2012, please complete the Perkins Loan MPN (at the above link) in order to secure your loan. Be sure to complete sections 1-6 and sign/date the bottom of the form.

Eligibility

Subsidized loans are awarded based on financial need. The Financial Aid Office uses your FAFSA results to determine your need and eligibility for a Federal Perkins loan. To be awarded a Perkins loan, a student must

  • be a U.S. citizen or permanent resident
  • not be in default on a prior student loan
  • not have been convicted of a drug offense while receiving federal financial aid

Loan Limits

The maximum awards are $5,500/year for undergraduate students and $8,000/year for graduate students. However, Perkins Loan awards at NEC typically range from $500 to $3,000 and depend on the amount of funding available each year. We regret that no Perkins Loan funding is available for the 2009-2010 academic year.

How to Apply

To apply for a Perkins Loan, you must first submit the Free Application for Federal Student Aid (FAFSA). When your FAFSA and Financial Aid file are complete, the NEC Financial Aid Office will review your file and send you an award letter detailing your eligibility for a Perkins loan, as well as other types of financial aid.

Once you have accepted your loan, you must complete a Perkins Loan Master Promissory Note (MPN). An MPN is a written promise to pay a lender a fixed amount of money over a specified period of time. You will only need to complete one Perkins Loan MPN during your time at NEC. We must have an MPN on file in order to disburse your loan funds.

Interest Rate & Fees

Perkins loans have no loan fees and a fixed interest rate of 5%. Perkins loans are subsidized, with the government paying the interest during the in-school and 9-month grace periods.

Disbursement

NEC typically disburses Perkins loan funding in two equal installments (i.e. one disbursement per semester for students enrolled for the full academic year). Your loan money must first be applied to your student account to cover billable charges such as tuition and fees. If the funds create a credit on your student account, the NEC Business Office will issue a refund check.

Exit Counseling

The government requires all federal student loan borrowers to complete a process called "Exit Counseling" any time they graduate, withdraw, or drop below half-time status. If you have borrowed both a Stafford Loan and a Perkins Loan while at NEC, you will need to complete Exit Counseling for each loan type (which types of loans do I have?). To complete your Perkins Loan Exit Counseling, please visit our Perkins Loan Exit Counseling site.

Repayment

The standard repayment plan is 10 years. NEC contracts with a company called University Accounting Services (UAS), a student loan management service that assists in the administration and billing of Perkins Loans. We encourage borrowers to sign up for an online account with UAS in order to easily view statements, make payments, and obtain valuable information about repayment plans and loan forgiveness/deferment.

Private Student Loans

A variety of private/alternative loan options are available to undergraduate and graduate students and/or their families. Alternative loans are offered by private lenders and are usually credit-based. Borrowers should only use private loans as supplemental funding after having exhausted all other sources of financial aid.

When researching your loan options, it is advisable to take into consideration the loans’ interest rates as well as any origination, disbursement, and repayment fees. We are happy to answer questions or provide information as you work to identify the program(s) that best suit your family’s needs.

Lenders Who Have Made Private Loans to NEC Students

In order to better assist our students and families in their search for a private loan lender, we have compiled the following, comprehensive list of all lenders who have made private (non-federal) education loans to NEC students in the last 3 academic years. In offering this list, we do not endorse, recommend, or promote any lender; borrowers may select any lender, including those not on the below list.

Chase Bank
CHESLA
Chicago Scholarship Foundation (Loan)
Citizens Bank

Citibank
Discover Student Loans
Firstmark
Liberty Bay Credit Union

The Main Loan
Massachusetts Education Financing Authority
NASA Federal Credit Union
NJCLASS

Pentagon Federal Credit Union
Sallie Mae
Union Federal
Vermont Student Assistance Corporation
Wells Fargo

Loans for Parents

Federal Parent PLUS Loan

The Direct Parent PLUS loan is a low-interest federal education loan available to parents of dependent, undergraduate students to help pay for the student’s educational costs. Borrowers with no adverse credit history may apply for up to the cost of education (for one academic year at a time), less any other financial aid.

Eligibility

Unlike other federal student loans, PLUS loan borrowers must meet their lender's minimum credit requirements. Applicants unable to meet the PLUS credit criteria may be able to borrow with a creditworthy “endorser” (the endorser cannot be released from the repayment obligation before the loan is repaid in full). To be awarded a Parent PLUS loan, the parent must

  • have a valid Free Application for Federal Student Aid (FAFSA) on file with the Financial Aid Office
  • be a U.S. citizen or permanent resident
  • be enrolled at least half-time and be otherwise eligible for federal student aid
  • not have a federal government judgment lien on his or her property
  • not owe an overpayment on a federal education grant or be in default on a previous federal education loan unless he or she has made satisfactory arrangements to repay the grant overpayment or loan
  • not have adverse credit history (i.e., no more than 90 days late on any debt and no defaults, bankruptcies or other adverse action on any Title IV debt)

Interest Rates

The interest rate for Direct Parent PLUS loans is fixed at 7.9%; interest begins to accrue on the date of the loan's first disbursement. Loan funds are disbursed directly to NEC. Direct PLUS loan borrowers must also pay a loan origination fee of 2.5%. Note: your lender deducts this fee before disbursing any loan money, so the loan amount disbursed will be less than the required repayment amount.

Application

To apply for a Direct PLUS loan for the first time, you parents must complete a Direct PLUS loan Master Promissory Note (MPN). An MPN is a legal document in which you promise to repay the loan, plus interest and fees, to the lender. The MPN also explains the terms and conditions of the loan. Typically, once your MPN has been submitted and accepted by the lender, you will not have to complete a new MPN to obtain future PLUS loans.

Go here to apply for a Parent PLUS loan online.

Upon application, the Department of Education will check your credit history; to be eligible for a PLUS loan, you must not have an adverse credit history.

Disbursement

For students enrolled for a full year, the Direct PLUS loan funds will be sent to NEC in two equal disbursements (typically, one at the start of each semester). NEC will first credit loan funds to the student’s NEC account to pay for billable charges. (tuition, fees, room, board, etc.). If the loan disbursement amount exceeds your charges, NEC will refund you the remaining balance of the disbursement.

Repayment

After disbursement, PLUS loan borrowers may contact their loan servicer to arrange repayment immediately (based on a standard 10 year repayment plan), or pay interest only, or defer repayment until s/he is no longer enrolled at least half time.

Loan Limits

Applicants can borrow any amount up to NEC's Cost of Attendance (see page 11 of NEC's Financing Your Education guide), minus any other financial aid awarded. Because Federal PLUS loans are not need-based, the funds may be used to cover the applicant's Expected Family Contribution (EFC).

Disclosures

Code of Conduct

The New England Conservatory Financial Aid Office is a member of NASFAA, the National Association of Student Financial Aid Administrators. We abide by NASFAA’s Code of Conduct for Institutional Financial Aid Professionals, which states that an institutional financial aid professional is expected to always maintain exemplary standards of professional conduct in all aspects of carrying out his or her responsibilities, specifically including all dealings with any entities involved in any manner in student financial aid, regardless of whether such entities are involved in a government sponsored, subsidized, or regulated activity. In doing so, the NEC Financial Aid Office is bound by the following:

  • Refrain from taking any action for our personal benefit.
  • Refrain from taking any action that we believe is contrary to law, regulation, or the best interests of the students and parents we serve.
  • Ensure that the information we provide is accurate, unbiased, and does not reflect any preference arising from actual or potential gain.
  • Remain objective in making decisions and advising the administration of New England Conservatory regarding relationships with any entity involved in any aspect of student financial aid.
  • Refrain from soliciting or accepting anything other than of nominal value from any entity involved in the making, holding, consolidating or processing of any student loans, including anything of value (including reimbursement of expenses) for serving on an advisory board or as part of a training activity or of sponsored by any entity.
  • Disclose to the administration of New England Conservatory any involvement with or interest in any entity involved in any aspect of student financial aid.

Reporting to NSLDS

Borrowers are advised that student loan information will be submitted to the National Student Loan Data System (NSLDS), which is accessible to guaranty agencies, lenders, and schools determined to be authorized users by the Department of Education.

Preferred Lenders Selection Process

Federal Stafford or PLUS loan borrowers may choose any lender that participates in the Federal Family Education Loan program.

The basic terms of the loans (maximum interest rate, maximum fees, deferment options) are set by the federal government. However, many lenders offer special benefits to borrowers. The NEC Financial Aid Office encourages you to compare the benefits offered by different lenders so that you can make an informed choice.

To assist borrowers in the lender selection process, the NEC Financial Aid Office has identified a group of lenders who we feel offer outstanding borrower benefits and customer service. In creating this list, we have considered several factors:

  • Borrower Benefits: Our preferred lenders offer competitive benefits such as zero/low origination fees for Stafford loans, interest rate reductions for borrowers who sign up for electronic payments, and principal reductions for borrowers who make a certain number of consecutive, on-time payments. We monitor changes in benefits offered by each lender to make sure that our preferred lenders offer the best benefits available to borrowers.
  • Customer Service: All of our preferred lenders have provided consistently excellent service to our borrowers for many years. We listen carefully to feedback from our students and parents regarding level of service. If a particular lender generates complaints, we will strongly consider removing them from our list.
  • Student/Parent Demand: If a significant number of NEC borrowers have chosen to borrow with a lender that does not appear on our preferred list, we will evaluate that lender for inclusion on the list. If we notice that one of our preferred lenders is no longer popular with our borrowers, we may consider removing them from the list.

We review our lender list at least once a year, applying the above criteria.

Alternative Financing Options

Tuition Management Systems

TMS is a private company not affiliated with NEC, that contracts with the Conservatory in order to offer students and families a monthly payment plan for paying direct educational costs (tuition, room, board, fees). This is not a loan program. There is a $90 enrollment fee to participate. For more information on TMS, call the NEC Business Office at 617-585-1221, or call TMS at 888-216-4258.

Private/External Grants & Scholarships

For additional information about private scholarships, please visit NEC's Scholarships page.

2013-06-20


WITHOUT CRAFTSMANSHIP, INSPIRATION IS A MERE REED SHAKEN IN THE WIND. JOHANNES BRAHMS