Federal Aid Policies and Procedures

Federal Aid Policies and Procedures

FEDERAL AID POLICIES AND PROCEDURES

Federal Direct Stafford Loans

Federal Direct Stafford Loans, also known as Direct Loans, are Federal Student Loans made directly available to college and university students and are used to supplement personal and family resources, scholarships and grants. They may be subsidized by the U.S. Government or may be unsubsidized depending on the student’s financial need.

Federal Direct Stafford Loans include the following two types of loans:

  1. Federal Direct Subsidized Stafford Loans: Direct Subsidized Loans are for students with financial need. They are awarded on the basis of the student’s financial need and other specific eligibility requirements. AAU’s Financial Aid Office will review the results of your Free Application for Federal Student Aid (FAFSA) and determine the amount you can borrow. The federal government does not charge interest on these loans while borrowers are enrolled at least half-time, during a six-month grace period, or during authorized periods of deferment. Repayment of subsidized loans begins six months after enrollment has ceased or dropped below half-time status.

    Interest Rate on Direct Subsidized Loans
    The interest rate on subsidized loans first disbursed to undergraduate students between July 1, 2015 and June 30, 2016 will be fixed at 4.29%.

    To maintain eligibility for a subsidized loan a student:
    • must have financial need (based on your FAFSA results)
    • must be enrolled at least half-time
    • must meet Satisfactory Academic Progress requirements
    • may not exceed the annual or aggregate loan limits
  2. Federal Direct Unsubsidized Stafford Loans: You are not required to demonstrate financial need to receive a Direct Unsubsidized Loan, but must meet specific eligibility requirements. Like subsidized loans, AAU’s Financial Aid Office will determine the amount you can borrow. Interest accrues (accumulates) on an unsubsidized loan from the time it’s first paid out. Interest is charged throughout the life of the loan. You can pay the interest while you are in school and during grace periods and deferment or forbearance periods, or you can allow it to accrue and be capitalized (that is, added to the principal amount of your loan). If you choose not to pay the interest as it accrues, this will increase the total amount you have to repay because you will be charged interest on a higher principal amount. Repayment of unsubsidized loans begins six months after enrollment has ceased or dropped below half-time status.

    Interest Rate on Direct Unsubsidized Loans
    The interest rate on unsubsidized loans first disbursed to undergraduate students between July 1, 2015 and June 30, 2016 will be fixed at 4.29%.

    To maintain eligibility for an unsubsidized loan a student:
    • must complete a FAFSA
    • must be enrolled at least half-time
    • must meet Satisfactory Academic Progress requirements
    • may not exceed the annual or aggregate loan limits

Sample Loan Repayment Schedules

Examples of Typical Direct Stafford Loan Repayments
Estimated Monthly Payments & Total Amounts Repaid Under Different Repayment PlansFor Direct Loans Only: Income Contingent (c) (Income = $25,000)
Initial Debt When You Enter RepaymentStandard (not to exceed 10 years)Extended (a)Graduated (b)SingleMarried/HOH (d)
Per MonthTotal RepaidPer MonthTotal RepaidPer MonthTotal RepaidPer MonthTotal RepaidPer MonthTotal Repaid
$3,500$50$4,471$25$5,157$27$6,092$25$6,405
$5,000$58$6,905$40$7,278$38$8,703$36$9,150
$7,500$83$10,357$59$10,919$57$13,055$54$13,725
$10,500$121$14,500$83$15,283$80$18,277$76$19,215
$15,000$173$20,714$119$21,834$114$26,110$108$27,451
$40,000$460$55,239$277$83,289$316$58,229$253$72,717$197$84,352

Payments are calculated using the fixed interest rate of 6.8 percent for student borrowers.

  1. This is an estimated monthly repayment amount for the first two years of the term and total loan payment. The monthly repayment amount will generally increase every two years, based on this plan.
  2. Assumes a 5 percent annual growth (Census Bureau) and amounts were calculated using the formula requirements in effect during 2006.
  3. Assumes an income of $25,000.
  4. HOH is Head of Household. Assumes a family size of two.

Borrower Requirements

In order to receive federal student loans, you must meet certain requirements. The Department of Education has created a website www.studentloans.gov to manage borrower requirements and provide valuable information regarding federal student loans. The three items listed below are required from all student loan borrowers.

  • Entrance Counseling

    To ensure that you understand your rights and responsibilities as a student loan borrower, the Federal Government requires you to participate in loan counseling prior to receiving a Direct Loan, if you have not previously received a Direct Loan, Federal Family Education Loan or Supplemental Loans to Students (SLS) Loan. You must complete entrance counseling before receiving your first Direct Loan disbursement at AAU. Entrance Counseling may be completed at www.studentloans.gov. Your Federal PIN is required in order to complete the Entrance Counseling.

  • Sign Master Promissory Note (MPN)

    The Master Promissory Note, commonly referred to as MPN, is a document that must be signed in order to receive a federal student loan. The signed MPN binds you to the federal government as a promise to repay the student loan you intend to take out to help cover your educational expenses. The MPN provides valuable information about the rights and responsibilities you have as a borrower. You must sign an MPN before receiving your first Direct Loan disbursement at AAU. An MPN may be signed at www.studentloans.gov

  • Exit Counseling

    Prior to graduating, leaving school, or dropping below half time status, Direct Loan borrowers must complete exit counseling. The Direct Loan Exit Counseling will explain your rights and responsibilities as a Direct Loan Borrower. Your Federal PIN is required in order to complete the Exit Counseling because your personal loan information will be provided. Exit Counseling may be completed at www.nslds.ed.gov.

Annual and Aggregate Loan Limits

The amount of federal student loans a student may barrow is dependent on many factors including their grade level, dependency status and federal loan limits. The following chart provides maximum annual and aggregate (total) loan limits for subsidized and unsubsidized Direct Loans.

YearDependent Undergraduate Student (except students whose parents are unable to obtain PLUS Loans)Independent Undergraduate Student (and dependent students whose parents are unable to obtain PLUS Loans) Graduate and Professional Degree Student
First Year$5,500-No more than $3,500 of this amount may be in subsidized loans.$9,500-No more than $3,500 of this amount may be in subsidized loans.$20,500-No more than $8,500 of this amount may be in subsidized loans.
Second Year$6,500-No more than $4,500 of this amount may be in subsidized loans.$10,500-No more than $4,500 of this amount may be in subsidized loans.
Third and Beyond (each year)$7,500-No more than $5,500 of this amount may be in subsidized loans.$12,500-No more than $5,500 of this amount may be in subsidized loans.
Maximum Total Debt from Stafford Loans When You Graduate (aggregate loan limits)$31,000-No more than $23,000 of this amount may be in subsidized loans.$57,500-No more than $23,000 of this amount may be in subsidized loans.$138,500-No more than $65,500 of this amount may be in subsidized loans. The graduate debt limit includes Stafford Loans received for undergraduate study.

Note: These annual loan limit amounts are the maximum yearly amounts you can borrow in both subsidized and unsubsidized Direct loans. You can have one type of loan or a combination of both. Because you can’t borrow more than your cost of attendance minus any other financial aid you’ll get, you may receive less than the annual maximum amounts. Also, the annual loan limits assume that your program of study is at least a full academic year.

Origination Fee

Students who accept and are disbursed Direct Stafford Loans will be charged an origination fee by the Department. These origination fees will be deducted before each disbursement. All Direct Subsidized and Unsubsidized loans disbursed on or after July 1, 2015 will include an origination fee of 1.0 percent.

Federal Student Loan Deferment

A deferment is a period of time during which your loan holder suspends your regular loan payments. Students who are enrolled at least half-time at AAU and whose student loans have gone into repayment may wish to seek an In School Deferment. Borrowers should contact their loan servicer for the appropriate deferment form and submit the form to the Business Office for certification. It is the student’s responsibility to ensure that the deferment request is processed by their loan servicer.

Refusing to Originate/Certify a Loan

AAU and the Financial Aid Office reserves the right to refuse to originate and/or certify a Direct Stafford loan or may reduce the loan amount. Such decision is made on a case-by-case basis and they must involve the respective directors of the Admissions Office, Student Affairs, Compliance and the Financial Aid Office. The borrower will be notified in writing of the reason for the decision and documentation will be kept by the Financial Aid Office.

Federal Direct PLUS Loans for Parents
Parents of dependent students may apply for a Direct PLUS Loan to help pay for their child’s education expenses as long as certain eligibility requirements are met.

To be eligible for a Direct PLUS Loan for Parents:

  • The parent borrower must be the student’s biological or adoptive parent. In some cases, the student’s stepparent may be eligible.
  • The student must be a dependent student who is enrolled at least half-time. Generally, a student is considered dependent if he or she is under 24 years of age, has no dependents, and is not married, a veteran, a graduate or professional degree student, or a ward of the court.
  • The parent borrower must not have an adverse credit history (a credit check will be performed). If the parent’s credit is not approved, the parent may still receive a loan if someone (such as a friend or relative) whose credit is approved agrees to endorse the loan. The endorser promises to pay the loan if the parent fails to do so.
  • The student and parent must be U.S. citizens or eligible noncitizens, must not be in default on any federal education loans or owe an overpayment on a federal education grant, and must meet other general eligibility requirements for the federal student aid programs.

Interest Rate on Direct PLUS Loans

The interest rate is fixed at 6.84%. Interest is charged from the date of the first disbursement until the loan is paid in full.

Interest rate cap for military members - If a parent qualifies under the Service Members Civil Relief Act, the interest rate on loans obtained before entering military service may be capped at 6% during the parent’s military service. Parents must contact their loan servicer to request this benefit.

Borrower Requirements

Parents of dependent students who wish to seek a Direct PLUS loan must complete a Direct PLUS Loan Request and Master Promissory Note (MPN) on www.studentloans.gov. The MPN is a legal document in which the borrower promises to repay the loan and any accrued interest and fees to the Department. It also explains the terms and conditions of the loan. In most cases, one MPN can be used for loans that a parent receives over multiple academic years although a separate Direct PLUS Loan Request must be filed for each academic school year.

Annual Loan Limits

The annual loan limit on a Direct PLUS loan is equal to the student’s cost of attendance minus any other financial aid the student receives.

Loan Fee

Parents who are approved and accept a Direct PLUS loan will pay a fee of 4% of the loan amount, deducted proportionately each time a loan disbursement is made.

Direct PLUS Loan Repayment

The repayment period for a Direct PLUS loan begins at the time the PLUS loan is fully disbursed, and the first payment is due within 60 days after the final disbursement. However, for Direct PLUS loans with a first disbursement date on or after July 1, 2008, the parent may defer repayment:

  • While the student on whose behalf the parent borrowed the loan is enrolled on at least a half-time basis, and
  • For an additional six months after the student ceases to be enrolled at least half-time.

Direct PLUS Loan Deferment

For Direct PLUS loans with a first disbursement date on or after July 1, 2008, the parent may defer repayment:

  • While the student on whose behalf the parent borrowed the loan is enrolled on at least a halt-time basis, and
  • For an additional six months after the student ceases to be enrolled at least half-time.

Loan Counseling

Loan Entrance/Exit Counseling (Required)

Before receiving a student loan, borrowers must complete an entrance counseling session. Loan entrance counseling provides information to students concerning how to manage student loans, both during and after college. Exit Counseling is generally required once a direct loan borrower drops below half-time enrollment status, withdraws or graduates. The student must notify the AAU Financial Aid Office prior to withdrawal or graduation for loan counseling. The purpose of loan exit counseling is to inform the student of their tentative total loans received while in attendance at AAU and to provide the student with an estimated payment schedule. Every loan counseling session will be documented in the student’s record by the Financial Aid Office.

Successful completion of entrance and exit counseling will consist of the following two parts:

  1. Students must complete entrance counseling on the studentloans.gov website before receiving their first Direct Loan disbursement at AAU.
  2. Students must complete exit counseling on the nslds.ed.gov website prior to graduating, withdrawing or dropping below half time enrollment status. The Financial Aid Office will e-mail the student the Exit Counseling for Federal Student Loan Borrowers booklet no later than 30 days from the last date of attendance if the student does not electronically complete the online exit counseling.

The Financial Aid Office is responsible for verifying a student’s completion of counseling. Receipt of this information will be documented in the student’s record.

Borrower Rights & Responsibilities

When a student takes on a student loan he/she has certain rights and responsibilities.

The borrower has the right to receive the following information before the first loan disbursement:

  • The full amount of the loan
  • The interest rate
  • When the borrower must start repaying the loan
  • The effect borrowing will have on the student’s eligibility for other types of financial aid
  • A complete list of any charges the student must pay (loan fees) and information on how those charges are collected
  • The yearly and total amounts the student can borrow
  • The maximum repayment periods and the minimum repayment amount
  • An explanation of default and its consequences
  • An explanation of available options for consolidating or refinancing the student loan
  • A statement that the student can prepay the loan at any time without penalty

The borrower has the right to receive the following information before leaving school:

  • The amount of the student’s total debt (principal and estimated interest), what the student’s interest rate is, and the total interest charges on the loan(s)
  • A loan repayment schedule that lets the student know when his/her first payment is due, the number and frequency of payments, and the amount of each payment
  • The fees the student should expect during the repayment period, such as late charges and collection or litigation costs if delinquent or in default
  • An explanation of available options for consolidating or refinancing the student’s loan
  • A statement that the student can repay his/her loan without penalty at any time

The borrower has a responsibility to do the following:

  • Understand that by signing the promissory note, the student is agreeing to repay the loan according to the terms of the note
  • Make payments on the student loan even if the student does not receive a bill or repayment notice
  • If the student applies for a deferment or forbearance, he/she must still continue to make payments until notification that the request has been granted
  • Notify the appropriate representative (institution, agency, or servicer) that manages the student’s loan when the student graduates, withdraws from school, or drops below half-time status; changes his/her name, address, or Social Security Number, or transfers to another institution
  • Receive entrance counseling before being given the first loan disbursement, and to receive exit counseling before leaving school

Student Body Diversity (2010-2011)

Men
Hispanic/Latino65
American Indian or Alaska Native3
Asian7
Black or African American53
Native Hawaiian or Other Pacific Islander8
White266
Two or More Races418
Race or Ethnicity Unknown268
Total Men1,088


Women
Hispanic/Latino9
American Indian or Alaska Native2
Asian3
Black or African American43
Native Hawaiian or Other Pacific Islander2
White79
Two or More Races197
Race or Ethnicity Unknown54
Total Women389
Total Students For 2010-20111477

AAU has recently been approved to offer Title IV aid. Therefore, AAU did not have any Pell Grant recipients in the 2010-2011 Award Year.

Student Convicted of the Possession or Sale of Drugs

A federal or state drug conviction can disqualify you from receiving federal financial aid!

Convictions only count if they were for an offense that occurred during a period of enrollment for which the student was receiving Title IV aid-they do not count if the offense was not during such a period. Also, a conviction that was reversed, set aside, or removed from the student’s record does not count, nor does one received when she was a juvenile, unless tried as an adult.

The chart below illustrates the period of ineligibility for FSA funds, depending on whether the conviction was for sale or possession and whether the student had previous offenses. (A conviction for sale of drugs includes convictions for conspiring to sell drugs.)

Possession of Illegal Drugs Sale of illegal drugs
1st Offense 1 year from date of conviction2 years from date of conviction
2nd Offense2 years from date of convictionIndefinite Period
3+ OffensesIndefinite Period

If the student was convicted of both possessing and selling illegal drugs, and the periods of ineligibility are different, the student will be ineligible for the longer period.

Drug and Alcohol Prevention Policy

Substance Abuse

Allied Business Schools (Allied Business Schools refers to ABS, AAU and ANHS) is firmly committed to providing a safe, healthy working environment for all employees, students and faculty. Consistent with this commitment, Allied Business Schools has strengthened its stand against drug and alcohol use. In compliance with section 120(a) through (d) of The Higher Education Act of 1965, as amended, including the Drug-Free Schools and Communities Amendments of 1989 (Public Law 101-226), the Allied Business Schools Drug and Alcohol Prevention Policy is provided to all employees and students annually.

Employee involvement with illegal drugs, controlled substances, or alcohol can negatively impact the workplace and the employee’s ability to perform his job duties. It also adversely affects the Company’s reputation, integrity and quality of products and services. Consequently, all employees, regardless of position, are covered by the terms of this Policy. Applicants for employment are included in this Policy as expressly stated.

Definition

All divisions of Allied Business Schools premises are all areas in which the Company operates including, but not limited to its property; Company owned or leased offices, plants and equipment; privately owned vehicles entering or parked on the property, or in use on the property; lockers; desks; equipment; work space; and storage facilities. Illegal drug means any drug which is an illicit drug and not legally obtainable or which is legally obtainable but has not been legally obtained. This term also includes prescribed drugs not legally obtained and prescribed drugs, such as controlled substances like pain medications, not being used for prescribed purposes.

Legal drug includes any prescribed drug or over the counter drug that has been legally obtained and is being used for the purpose for which it was prescribed or manufactured. Under the influence means; that the employee is affected by drugs or alcohol or the combination of drugs and alcohol in a detectable manner. A determination of such influence can be established by professional opinion, a scientifically valid test or, in some cases, by a layperson’s opinion.

Requirements/Prohibition

Students, faculty, and staff must comply with federal, state, and local laws concerning alcohol and illegal drug usage, whether on the Company’s property or otherwise. Allied Business Schools employees must report for work and remain in a condition to perform their duties free from the effect of any drug or alcohol. Employees shall not be under the influence of any illegal drug while performing any Company related activity.

All employees must report for work and remain in a condition to perform their duties free from the effect of any drug or alcohol. Employees shall not be under the influence of any drug, legal or illegal, during working time, while on Company premises or business or while operating Company vehicles or equipment. The use, sale, possession, manufacture or purchase of illegal drugs, controlled substances or alcohol while on Company premises or while on Company business is prohibited. Employees who violate this Policy are subject to disciplinary action, up to and including termination. Such violations include, but are not limited to, the commission of any act prohibited under this Policy and the failure to cooperate with or follow any of its requirements.

Use of Legal Drugs

Studies show that long term heavy drinking and drug use can lead to damage of the liver, nervous system, heart and brain. It may also lead to high blood pressure, stomach problems, medicine interactions, sexual problems, osteoporosis, and cancer. Because of the well known consequences of drug and alcohol abuse, the company is firmly committed to providing a safe and healthy environment for all students and employees. Consistent with this commitment, the company has a zero tolerance policy against drug and alcohol abuse.

It is the responsibility of the employee who is taking legal drugs to assure that such medication will not interfere with the employee’s safe and efficient performance of his job. Upon receiving a prescription, the employee must ask the physician whether the use of a prescribed drug will interfere with his/her safe and efficient performance. If so, the employee must inform the supervisor of this fact and cooperate fully with management in an evaluation of the appropriate action. If management concludes that the drug will or may adversely affect the employee’s job performance, management will determine whether assignment of alternative job duties, a leave of absence and/or other job related action is required. The employee may also be required to obtain a physician’s release before being allowed to return to regular Job duties.

Investigation

The use, sale, possession, manufacture, or purchase of illegal drugs, controlled substances, or alcohol while on the premises or while performing Company related activities is strictly prohibited. Those who violate this policy are subject to disciplinary action, up to and including expulsion, termination of employment and referral for prosecution. Local, state and federal sanctions for unlawful activity relating to drug and alcohol abuse may result in fines and/or incarceration. Employees reasonably suspected of possession, use, manufacture, sale, purchase or of being under the influence of illegal drugs or alcohol on Company premises or during working time may be suspended without pay pending an investigation of the circumstances. The Company will try to complete its investigation within a 72 hour period.

To ensure that drugs, alcohol and/or other illegal activity do not enter or affect the workplace, the Company may take any or all of the following steps in accordance with applicable state law while employees are on Company premises or performing Company business during working time.

  • observe actions of employees
  • counsel employees
  • search any Company property, including desks, file cabinets and lockers
All searches under this policy will occur with the appropriate discretion and consideration for the employee(s) involved.

Drug Use Assistance

Allied Business Schools is a virtual campus and therefore does not allow for us to provide onsite counseling or treatment. Therefore, we provide the following information as a resource for those students who need assistance with avoiding or recovering from alcohol or drug abuse. We encourage any student, staff, or faculty member who needs information related to alcohol or drug abuse to use directory information, online searches, the telephone book, or referrals from friends, family, and/or professionals. At a national level there are also organizations dedicated to providing information and suggestions:

  • Substance Abuse and Mental Health Services Administration (SAMHSA)
This is an agency of the U.S. Department of Health and Human Services which provides information online regarding alcohol, drugs, and treatment programs. Web address: www.samhsa.gov
Treatment programs: findtreatment.samhsa.gov
Phone Number: 1-800-729-6686
  • The National Clearinghouse for Alcohol and Drug Information
This organization is part of the U.S. Department of Health and Human Services and SAMSHA’s Clearinghouse Web address: http://www.health.org
Phone Number: 1-800-729-6686
  • About.com Substance Abuse
Explore the complicated disease of addiction and obtain information on basic questions concerning drugs and addition.
Web address: http://search.about.com/fullsearch.htm?terms=substance%20abuse
  • National Institute on Drug Abuse
Web address: www.nida.nih.gov
Web address on club drugs: www.clubdrugs.org
Phone Number: 1-310-443-1124
  • Alcoholics Anonymous
Web address: www.alcoholics-anonymous.org
  • Local Resources for Staff and Faculty
Substance Abuse - Orange County California
Web address: http://www.ocgov.com/ocgov/Social%20Services%20Agency/Community%20Resources/Substance%20Abuse
  • Social Services Agency - Orange County California
Web address: http://www.ssa.ocgov.com/

Notice of Availability of Institutional and Financial Aid Information

Allied American University (AAU) is required to disclose certain consumer information to prospective students and annually to currently enrolled students. AAU publishes most of this information on the school’s website at www.allied.edu. Other consumer information can be found in the school catalog, the Student Financial Aid Handbook and through direct distribution to each individual. You also have the right to receive this information in paper copy. You may contact the Financial Aid Office to obtain paper copies of any of the information listed below.

  • Notice of Availability of Institutional and Financial Aid Information
  • Contact Information for Assistance in Obtaining Institutional or Financial Aid Information
  • General Institutional Information
  • Privacy of Student Records - Family Educational Rights and Privacy Act (FERPA)
  • Facilities and Services for Students with Disabilities
  • Student Diversity
  • Price of Attendance
  • Net Price Calculator
  • Refund Policy and Requirements for Withdrawal and Return of Federal Financial Aid
  • Textbook Information
  • Educational Programs
  • Instructional Facilities
  • Faculty
  • Transfer of Credit Policies and Articulation Agreements
  • Accreditation, Approval, and Licensure of Institution and Programs
  • Copyright Infringement - Policies and Sanctions
  • Computer Use and File Sharing
  • Student Activities
  • Career and Job Placement Services
  • Student Financial Assistance
  • Assistance Available from Federal, State, Local, and Institutional Programs
  • Federal Direct Loans Terms and Conditions
  • Procedures for Applying for Assistance
  • Entrance Counseling for Student Borrowers
  • Student Rights and Responsibilities
  • Criteria for Continued Student Eligibility
  • Satisfactory Academic Progress
  • Method of Disbursements
  • Exit Counseling for Student Borrowers
  • Federal Student Financial Aid Penalties for Drug Law Violations
  • Health and Safety
  • Alcohol and Drug Policy
  • Student Outcomes
  • Retention Rate
  • Graduation Rates
  • Transfer Out Rates
  • Job Placement for Graduates
  • Job Placement Rates for Graduates
  • Graduate and Professional Education Placement for Graduate

AAU Bookstore Return Policy

Learn about AAU’s Bookstore Return Policy, on hard-copy textbooks, lab kits, software, electronic textbooks and more.

Finances Cancellation Withdrawal Refund Policy

A student may cancel his or her course(s) by following the procedures outlined on the Finances Cancellation Withdrawal Refund Policy.