A loan is a form of financial aid that must be repaid, usually with interest. There are two types of educational loans presently available to domestic (US citizen or permanent resident) NEC students: the Federal Direct Stafford Loan (for students) and the Federal PLUS Loan (for parents or graduate students). The terms and interest rates of these loans are set and monitored by the Department of Education.
A variety of alternative private loan options are also available to students and/or their families. Alternative loans are offered by private lenders, are not associated with the federal government, and are usually credit-based. Borrowers should only use private loans as supplemental funding after having exhaused all other sources of financial aid.
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. Since July 2012, only undergraduate students who demonstrate financial need can recieve subsidized Stafford loans. The federal government pays the interest on subsidized Stafford loans while the student is enrolled at least half-time. If a student does not demonstrate financial need, he or she will typically 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 in addition to the principal. Loan repayment begins six months after the student ceases to be enrolled at least half-time.
The Financial Aid Office uses your FAFSA to determine your eligibility for a 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
Interest Rates & Fees
For 2016-2017, the interest rate for undergraduate students' subsidized and unsubsidized Stafford loans is fixed at 3.76%. The interest rate for graduate students' unsubsidized Stafford loans is fixed at 5.31%. Rates are set annually by Congress and are based on the 91-day rate from the last Treasury auction in May.
All direct Stafford loans disbursed on or after Oct. 1, 2015, and before Oct. 1, 2016, carry a 1.068% origination fee. The federal government deducts this fee from the gross loan amount before NEC recieves the loan funds.
Annual Stafford loan limits are determined by the students' year in school, which is based on the number of credits s/he has successfully completed. The government limits the amount of a sudent's total Stafford loan funding that can be subsidized, as shown in the following chart:
Stafford Loan Limits:
|Year in School||Maximum Annual Loan Limit*||Maximum Amount of Annual Limit That Can Be Subsidized|
|First Year Undergraduate||$5,500||$3,500|
|Second Year Undergraduate||$6,500||$4,500|
|Third/Fourth Year Undergraduate||$7,500||$5,500|
*Independent undergraduate students (Am I independent?) and dependent students whose parents have been denied a PLUS loan are eligible to borrow additional unsubsidized Stafford loan funds. First-year and sophomore students can recieve an additional $4,000, while juniors and seniors can recieve an additional $5,000. Independent students' financial aid award letters will reflect these additional amounts. Parents who have been denied a PLUS loan should contact the Financial Aid Office for additional information.
To apply for a Stafford Loan, you must 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 and other types of financial aid.
All Direct Stafford loan borrowers must complete a Direct Stafford loan Master Promissory Note (MPN). An MPN is a legal document in which the borrower promises to repay the loan, plus any accrued interest and fees, to the lender. The MPN also explains the terms and conditions of the loan. To complete a Direct Stafford loan MPN, log in to studentloans.gov and select "Complete Master Promissory Note." Note: the site requires the use of a Department of Education issued PIN (typically, the same 4-digit PIN with which the student e-signed his/her FAFSA).
All Direct Stafford loan borrowers must also complete Entrance Counseling before loan funds can be sent to the school. To complete Entrance Counseling log in to studentloans.gov and select "Complete Counseling." 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 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.
Disbursement and Repayment
Up to date, government-published information on disbursement and repayment, including government loan repayment plans, can be found on studentaid.ed.gov. Federal Student Aid regulations mandate that students cannot have their federal aid disbursed until the first day of classes. Students who borrow loan funds to cover living expenses will receive these funds after their loans are posted onto their student account. Students should not plan on getting a refund check until approximately the second week of classes.
After graduating, leaving school, or dropping below half-time enrollment, Direct Stafford loan borrowers must complete Exit Counseling. Exit counseling can be completed online at studentloans.gov. After a six-month grace period following the date of separation, borrowers must begin repayment.
The Direct PLUS loan is a credit-based federal education loan available to graduate students and the 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.
Unlike other federal student loans, PLUS loans are credit based and borrowers must meet 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)
The interest rate for 2016-2017 Direct PLUS loans disbursed before October 1, 2016, is fixed at 6.31%. Rates are set annually by Congress and are based on the 91-day rate from the last Treasury auction in May. Interest begins to accrue on the date of the loan's first disbursement. Loan funds are disbursed directly to NEC. The federal government deducts a loan origination fee of 4.276% from the gross loan amount before forwarding the balance to NEC.
Applicants can borrow any amount up to NEC's Cost of Attendance 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).
To complete an application for a PLUS loan, take the following steps:
- Visit studentloans.gov. After logging in, select "Request a Direct PLUS Loan," then provide the requested personal and employment information.
- Complete a PLUS Loan Master Promissory Note online at studentloans.gov. After logging in, select "Complete Master Promissory Note." An MPN is a legal document in which the borrower promises to repay the loan, plus interest and fees, to the lender. The MPN also explains the terms and conditions or the loan. 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.
Both steps require the use of a Department of Education-issued FSA ID. To request an FSA ID, visit fsaid.ed.gov. The Direct Loan servicer will notify the Financial Aid Office when both processes are complete. After the semester has begun, if the student's financial aid file is complete, the net amount of the loan will be credited to his/her account with the NEC Business Office.
Disbursement and Repayment
Up to date, government-published information on disbursement and repayment, including government loan repayment plans, can be found on studentaid.ed.gov. Federal Student Aid regulations mandate that students cannot have their federal aid disbursed until the first day of classes. After disbursement, PLUS loan borrowers may contact their loan servicer to arrange repayment immediately (based on a standard 10 year repayment plan), pay interest only, or defer repayment until s/he is no longer enrolled at least half time. Students who borrow loan funds to cover living expenses will receive these funds after their loans are posted onto their student account. Students should not plan on getting a refund check until approximately the second week of classes.
After the student graduates, leaves school, or drops below half-time enrollment, Direct PLUS loan borrowers must complete Exit Counseling. Exit counseling can be completed online at studentloans.gov. After a six-month grace period following the date of separation, borrowers must begin repayment.
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.
Discover Student Loans
Liberty Bay Credit Union
Massachusetts Education Financing Authority
NASA Federal Credit Union
Pentagon Federal Credit Union
Rhode Island Student Loan Authority
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.
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.
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). TMS is not a loan program. There is an 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 information about private scholarships, please visit NEC's Scholarships page.