Steps to take when applying for US Financial Aid
There are a number of important steps to applying for US Financial Aid at the University of Otago.
Please note that the full description of the application process which is available elsewhere on this website.
Students must have been admitted to the University of Otago in the course they wish to receive funding for. Please note that not all courses are eligible for students to receive US Financial Aid.
2. Complete “FAFSA”
This is based on your prior year tax information. It outlines your eligibility for Aid and provides the US Department of Education with the financial information to calculate your Expected Family Contribution. Please insert Otago’s school code (G 21568).
3. Complete Entrance Counselling
This step provides you with all the relevant information about borrowing and repaying loans and ensures you understand the undertakings. Students need to complete counselling for Direct Subsidized Loan, Direct Unsubsidized Loan and Direct Loan Grad PLUS.
Parents borrowing Parent PLUS are not required to complete entrance counselling.
You may complete Direct Loan Entrance Counselling electronically via the Studentloans website
To complete Direct Loan Entrance Counselling electronically, you must have a Federal Student Aid PIN. This is the same PIN used to complete the FAFSA (see step 2).
4. Financial Aid Application Form
Complete and return the University of Otago US Financial Aid Application Form (original required).
5. Direct Loan MPN Completion
This outlines the terms and conditions of your loan and is your promise to repay the loan funds.
6. Assessment of Provisional Eligibility
Once your provisional eligibility for a Direct Subsidised Loan and/or Direct Unsubsidised Loan has been assessed, we will notify you of the loans and amounts for which you are eligible. Depending on your status, information about a Direct PLUS loan award for which you or your parent may be eligible will also be included if appropriate. (Graduate students may be eligible for Direct PLUS loans; dependent undergraduate student, your parent may be eligible for a Direct PLUS loan. Students who are ineligible for a PLUS loan may consider a private education loan.
Please note that an assessment of provisional eligibility does not guarantee eventual receipt of funds.
We encourage you to actively monitor your debt levels. This is not something that you should leave until after graduation.
If you want to know what you have borrowed, who now controls the loan and what your loan balance is, visit the National Student Loan Data System.
Figures are listed in US dollar amounts and will be converted to NZ dollar amounts using the exchange rate in effect at the time of the delivery/return of funds. Revisions will NOT be made to reflect any changes in the currency exchange rate.
A servicer is a company which handles administrative aspects of the loan such as collection of payments, correspondence with borrowers, address changes, loan status updates and more. It is important to know the name of your servicer since quite often all communication regarding your loan will be with the servicer.
The US Department of Education approved servicers are:
- Affiliated Computer Services (ACS-Inc)
- Great Lakes Education Services
- Sallie Mae Corporation
- American Education Services (AES) / Pennsylvania Higher Education Assistance Agency (PHEAA)
You and Your Servicer
Whether you are starting university or your career, it is your responsibility to know the facts, about not only the degree that you are undertaking, but also the funding methods, what you are going to be required to pay and when you are going to be required to pay the money back. You are making a big decision and a big commitment to paying the loan funds back. It is important to know exactly what that commitment is all about.
Your Responsibilities as a Direct Loan Borrower
- Think about how much you are borrowing – keep track of your Title IV loans on the NSLDS website
- By signing an MPN means that you will repay your loan
- You will make payments regardless of receiving billing notices
- You will continue to pay while waiting for deferment or forbearance approval
- Notify the Direct Loan Servicing Centre of changes in enrollment status
- Receive Exit and Entrance Counselling.
What Your Servicer expects from you
That you repay your loan.
Your obligation to repay becomes legally binding when you sign the Master Promissory Note (MPN) and authorize the electronic transfer of funds to your student account.
Your requirement to repay does not go away because you:
- Do not complete your educational program
- Cannot find employment
- Were not satisfied with the education or other services your received from the university
- Were notified that your loan was sold to another party by your servicer.
That you pay on time.
You must make your repayments on time unless you have made special arrangements with the servicer. Many servicers offer repayment incentives to reward you for paying on time.
Make a Minimum Payment. A minimum monthly loan payment is required. This minimum amount varies depending on the amount you borrow and your repayment plan.
Notify the University of Otago and the servicer about changes in any of the following:
- Change in your current address / phone numbers / name
- Change in your Social Security Number
- If you withdraw from University
- If you drop below full-time
- Change in your anticipated graduation date
- Change in your US driver's license number
- Change in your references
- Change in your permanent address
- Change in your expected employer
What you should expect from your Servicer
Master Promissory Note
When you decide to enter into an agreement with a particular servicer for your student loan, you sign a Master Promissory Note (MPN). This document explains the terms and conditions of your loan in full detail. It also serves as the legal document requiring you to repay the loan with interest. Read through the entire promissory note before you sign it and make sure you understand your rights and responsibilities. The MPN (either paper or electronic) is only valid for a maximum of one year if you are attending a university outside the US.
Notice of Guarantee and Disclosure Statement
Your servicer provides you with a disclosure statement before or at the time your loan is disbursed. This document states the amount of your loan (principal), and any fees deducted from the principal. It also discloses the interest rate, the annual percentage rate, and an estimate of the total amount you will have to repay (including the total amount of interest based on a Standard Repayment plan). Be sure you receive this from your servicer for your records.
Students repay a Direct Loan to the United States Department of Education (ED). ED contracts with several loan services who act on ED’s behalf as they collect outstanding DLs.
There are a variety of repayment plans that a borrower may pursue. The borrower should discuss these with the appropriate loan servicer.
During your grace period, your servicer will send you a detailed Repayment Schedule. This document states the number and amount of monthly payments and the date when the first payment is due. At the same time, you will receive information about other repayment options, such as the Graduated and Income-Sensitive plans, extended and consolidation plans.
Notification of Loan Transfer
If your servicer sells or transfers your loan to another servicer and it changes where your loan payments are sent, you will receive a Notification of Loan Transfer. This document contains addresses, phone numbers, and other information needed to make payments and keep in touch with the new servicer of the loan. The terms of your loan will not change if your loan is sold or transferred.
For all enquires about US Financial Aid at the University of Otago, please email