New Disbursement Method Set to Begin
By Jasmin Jenkins, Advertising Manager
According to the Office of Financial Aid September 2014 newsletter, beginning in the Fall 2014 semester, the federal government has made some changes to when student’s loans will disburse.
The newsletter advises students to keep in mind that the 30 day delayed disbursement for first time borrowers will affect the delivery of their loan proceeds via their refund.
“If you are expecting a refund, the loan portion of that refund will be delayed until the 30 days have passed,” Director of Financial Aid and Scholarships Jenelle Handcox said.
For one time borrowers, as in one term only, the student will receive half of their refund at the beginning of the semester and the other half after midterms.
The newsletter provides the example of if you requested the loan for $1,000 for Fall Semester only, half of your loan ($500) will disbursed at the beginning of the term, while the other half will be withheld by the federal government until midterm.
“This change came about as a result of our default rate, meaning that students who are no longer enrolled have failed to pay off their loans,” Handcox said.
According to Handcox, the default rate went from 11.4 percent in 2010 to 15.9 percent in 2011. This shows how rapidly the default rate increases yearly. Students have six months to pay back loans once they are no longer enrolled.
“When you take out a student loan, you are borrowing from the federal government. You have to pay that back because there consequences for you and the university if you fail to do so,” Handcox said.
Unpaid student loans can result in garnished income tax returns, garnished wages, garnished social security and ineligibility for financial aid in the future.
“I advise all students who take out loans for college to be smart and pay those loans off,” Handcox said.
For further information concerning the changes that have been made in the Office of Financial Aid or for general inquiries go to the website www.uncp.edu/admissions-aid/costs-paying-college/fiancial-aid.