The ins and outs of student loans

By Stephanie Stuckey, Staff Reporter

There are currently five different loans available to students and their parents, said Lee Carrillo, senior director of Financial Aid & Scholarship Services at CNM.

They are the Subsidized Stafford Loan, the Unsubsidized Stafford Load, the Federal Perkins, the Federal Parent Loans for Undergrads (PLUS), and the Nursing Student Loan-for-Service, he said.

The requirements to receive a student loan, are that a person must be enrolled in 6 credit hours; congress establishes loan limits that may be prorated depending on your student classification, Carrillo said.

If a student is a first time borrower, they will need to complete the entrance counseling session, which is in person, he said.

The entrance counseling session is about 30 minutes to an hour long and students can expect to learn the do’s and do not’s of borrowing, as well as “the good, the bad, and the ugly” of the student loan process, he said.

First time borrowers are also required to sign a master promissory note, which is a document containing a written promise to pay a stated sum to a specified person or agency at a specified date or on demand.

When a student signs a promissory note, they are agreeing to repay the loan according to the terms of the note; this note is a binding legal document.

Carrillo said that the counseling sessions are offered at Main Campus, Montoya Campus, and the West Side Campus.

Carrillo said students are discouraged to borrow money, unless absolutely necessary because the cost to attend CNM is so low.

Students need to keep in mind student loans should not be expected to supplement total income, he said.

If students do decide that they are going to get a student loan, the two most common are the Subsidized Stafford Loan and the Unsubsidized Loan, he said.

The difference between the two loans is that with the Subsidized Loan, the government will pay the interest on the loan as long as the student is enrolled in 6 credit hours or more.

The Unsubsidized Loan requires the student to pay the interest on the loan monthly or the loan will begin to accrue interest monthly, Carrillo said.

According to the, under financial aid the Federal Perkins Loan is available who are in the medical or educational field, the maximum annual award is limited to $2,000 per student, and is based on available funds.

The Federal Parent Loan for Undergraduate Students (PLUS), is a loan specifically for the parents of dependent students and is meant to help parents pay for their children’s education per the CNM website.

There is also a loan available to nursing students only, it is the Nursing Student Loan-for-Service Loan.

The purpose of this loan is to increase the number of nurses in under-served rural areas in New Mexico.

Students need to keep in mind that they are borrowing money against future income and there are certain responsibilities that the students must adhere to, Carrillo said.

A student who takes out a student loan must repay the loan even if they do not complete their education, Carrillo said.

Repayment on loans begins 6 months after graduation or if the student drops below 6 credit hours and does not return to school, payment will be expected on the first day of the sixth month, he said.

Ramifications of not paying back student loans are that it will reflect badly on credit reports and wage garnishment can and will happen, Carrillo said.

According to Carrillo, wage garnishment is different than auto-pay in that the student is forced to make payments directly from their check.

Auto-pay is when the student willingly makes arrangements with the student loan servicing agency to take payments directly from the student’s bank account.

There are a few different payment options available to students if their payment is too high, Carrillo said:

-the basic set amount payment per month

-the graduated payment, which starts out low, then gradually gets higher each year

-the debt to income ratio, which is based on income earned and actual take home pay; this

can be as low as $25/month.

However, if a student falls into the lower payment bracket, they could possibly be paying back the student loan for a long time and interest accrues at a high rate due to not paying off any of the principle amount, Carrillo said.

At the entrance counseling, students will receive a list of twelve different loan servicing agencies that will be servicing their loans, he said.

Students are often unaware that these agencies are who they need to make their payments to and the loan statements get mixed-up with junk mail or thrown away, so it is very important for the student to be aware, pay attention, and follow through, he said.

“The out of sight, out of mind philosophy will not work with students loans, they will catch-up with you,” Carrillo stated.

Students will be discouraged from borrowing at CNM because they should really hold off on student loans until transferring to a four year institution because that is where they will really need it, he said.

Exit counseling is also available to students upon graduation as well, he said.

At exit counseling, students will be informed of what can be expected from them, in terms of their student loans after graduating, he said.

Student loan information can be found at under student resources.

Under student resources, select financial aid, and to the left of that page, select loans.

The CNM website is a great reference tool and students can access the information at any time, Carrillo said.

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