Colby does not expect its students to borrow to pay College costs and loans are not included in the aid packages of students who need financial assistance as determined by the College. Students may still elect to borrow, depending upon personal and family circumstances, but their election to assume loans will be entirely their option. A number of loan choices remain available, including the Perkins and Stafford programs and a variety of parent loan programs.
Federal Perkins Loans are made available to Colby students through federal and College funding and in accordance with federal regulations.
Repayment of these loans does not begin until nine months after a student has left college. The annual interest rate is 5 percent. An incoming Colby student may be eligible for a Federal Perkins Loan of up to $5,500. A student automatically applies for a Federal Perkins Loan by completing a Free Application for Federal Student Aid (FAFSA). Priority is given to those students who also file a complete application for Colby aid.
The Federal Stafford Loan program permits students to borrow up to:-
$5,500 in the first year
$6,500 in the sophomore year
$7,500 in the junior and senior years The current interest rate is no more than 4.5 percent interest (subsidized) and 6.8 percent (unsubsidized).
These loans require no principal payments while the student is enrolled at least half time if the student qualifies for the federal interest subsidy. The repayment period is up to 10 years, and payment may be deferred for full-time enrollment in graduate school.
Students with family incomes of $0 to well over $175,000 may qualify for subsidized Federal Stafford Loans on the basis of an eligibility determination. Because many factors are included, there is no income-level cutoff in determining eligibility for subsidized Federal Stafford Loans.
Students who do not qualify for the full subsidized Federal Stafford Loan may apply for an unsubsidized Federal Stafford Loan. The only difference between these loans is that the student is responsible for the interest on the unsubsidized loan during the enrollment period.
Evaluation of the different programs requires consideration of both the amount available per year and the terms of repayment. For example:Interest rates will differ: lower rates may reduce the amount of the monthly payment.
Some rates are fixed rather than variable: fixed rates will protect you from rising interest rates.
The length of the repayment term will vary: a longer term of repayment usually results in lower monthly payments.
Some programs permit interest-only payments during periods of enrollment. Interest-only payments enable you to keep the monthly payments as low as possible during the period of enrollment but will increase either the length of repayment or the size of the monthly payment after graduation. Some programs permit the capitalization of interest during enrollment; that is, no interest payments are required until after graduation, but the total debt will be much larger at that time.
Some programs provide the option of home equity security, which may enable you to deduct the interest on your federal income tax return. The fees you will pay for the paperwork necessary to secure the loan with home equity will vary. The Federal Taxpayer Relief Act of 1997 includes tax deductibility of some federal education loan interest payments for eligible filers.
Purpose of the Opportunity Maine Program: The program’s purpose is to reimburse education related loans not to exceed in-state tuition and mandatory fees at Maine Community Colleges and the University of Maine System campuses for Maine resident students who complete an associate’s degree or bachelor’s degree in the State and live, work, and pay taxes in the State thereafter. The program includes both employers and employees as qualifying for the tax credit under appropriate circumstances. The Maine Revenue Services will determine eligibility and the amount of the tax credit that each program participant may claim.
"Principal cap" means the loan principal limit that will serve as the basis for claiming the educational opportunity tax credit and is based on in-state tuition and mandatory fees for pursuit of an associate’s degree or a bachelor’s degree from either the Maine Community College System or the University of Maine System, respectively.
For each program participant who obtains a degree, the relevant financial aid office shall certify whether or not the total principal of loans the individual received as part of that individual’s financial aid package exceeds the published average in-state tuition and mandatory fees for full-time enrollment in the Maine Community College System or in the University of Maine System, depending on whether the degree is an associate degree or a bachelor’s degree, respectively, during the relevant years. The average in-state tuition and mandatory fees shall be published and disseminated to the financial aid offices of all institutions of higher education in the State of Maine on or about September 1 each year by the Chancellor of the University of Maine System and the President of the Maine Community College System and they shall be based on averages of program differences within the two systems respectively.
For those students whose loans exceed the principal cap, the financial aid office will calculate what the monthly payment would be on a loan for the amount of the principal cap, to be paid over ten years at the nominal interest rate offered under the Stafford Loan Program, 20 United States Code, Section 1077a. This will be the maximum amount eligible for an educational opportunity tax credit, and it will be so indicated by the financial aid office on the graduating student’s Opportunity Contract.
To preserve eligibility, a student commencing a degree program on or after the effective date of the Opportunity Maine Program must:
1) successfully complete an associate’s or bachelor’s degree program;
2) remain a Maine resident either from the effective date of the Opportunity Maine Program (January, 2008) or from before the end of the second semester of pursuit of the degree, whichever comes later; and
3) perform all coursework toward the degree in Maine colleges and universities, obtaining the final degree from an accredited Maine college or university.
An individual enrolled in a Maine college or university at the time of the effective date of the Opportunity Maine Program need only meet the residency and in-state coursework requirements with respect to the time after the effective date of the Opportunity Maine Program.
More information about the program is available from:
