Students, Families
& Counselors
& Counselors
Frequently Asked Questions - Borrower Eligibility
A defaulted Stafford loan was paid in full through a Direct Consolidation Loan. The borrower has included the consolidation loan in a bankruptcy petition. Is the borrower eligible to receive federal aid?
A borrower who includes a “non-defaulted” federal student loan in an active bankruptcy claim is eligible for aid if they have no loans in default.Even though the borrower’s Stafford loan was in default status at one time, the default was cured through inclusion in the consolidation loan.
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I have a part-time student who is also enrolled as a full-time, fourth year student at another school. The other school has certified a $4,000 subsidized loan for the upcoming academic year and the student already has $18,125 in subsidized Stafford loans
The total amount of subsidized loan funds the student can receive for enrollment at both schools cannot exceed the student’s highest applicable annual Stafford loan limit for the academic year.In this case, the annual limit would be based on the student’s enrollment as a fourth year student at the other school, i.e. $5,500. In addition, ESCB has to be sure that the student does not exceed the aggregate base limit of $23,000. This means the student, prior to the upcoming academic year, has remaining subsidized eligibility of $4,875 ($23,000 – $18,125). Since the other school has already certified a $4,000 subsidized loan for the upcoming year, the student would only be eligible for a subsidized loan of $875 at ESCB.
It should be mentioned that if a student is independent they may be eligible to apply for an additional unsubsidized loan, as well.
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An undergraduate student is certified for the full annual loan amount using a Borrower Based Academic Year (BBAY) of Summer/Fall. When the student returns to school the following Spring and is eligible for another full annual loan amount, may that entire amount be disbursed in the Spring term? Also, when is the next term following Spring that the student may apply for a new annual loan limit?
Yes, after the Summer/Fall BBAY, the student may receive a full annual loan amount in the Spring. Since the school’s BBAY consists of two terms, (in this case it would be Spring/Summer), a subsequent full annual loan amount may not be certified until the following Fall term.Top
A student has had several HESC-guaranteed loans from New York lenders. He applies for another loan from the same lender, but no longer meets residency requirements and will not be attending school in New York. Will the loan application be denied?
If a student is attending a school outside of NYS, the borrower is eligible for the loan if: (1) they have been a resident of NYS for the previous 12 months for which the loan is intended; or, (2) the school or lender has signed a cooperative agreement with HESC to guarantee loans for students who are not residents.Top
Can a dependent undergraduate student who has received the annual maximum subsidized Federal Stafford Loan for his or her grade level receive an unsubsidized Federal Stafford loan?
A dependent undergraduate student’s annual loan limit for an unsubsidized Federal Stafford loan is the same as the student’s annual limit for a subsidized Federal Stafford loan. However, a dependent undergraduate student may qualify for “additional” unsubsidized Federal Stafford Loan funds if the student’s parent was ineligible to receive a FPLUS loan.Top
Can a student borrower who has declared bankruptcy apply for a Federal Stafford loan if there were no federally guaranteed student loans discharged in the bankruptcy?
Yes. An applicant may not be denied a loan by a lender or guaranty agency solely because of bankruptcy.Top
If a student files taxes in NYS, has a NYS driver license, and his parents live in NYS, but the student attends school in Maryland and has a Maryland address, is the student considered a NYS resident?
Yes, for the purposes of the FFEL program.Top
Can a student who is not enrolled in a degree or certificate program receive a Stafford Loan?
Yes. A student taking preparatory courses necessary for enrollment in a eligible degree or certificate program may be eligible for a period of 12 consecutive months from the start of the loan period. Also, certain students enrolled in courses required for teacher certification may be eligible.Top
If a borrower had a defaulted loan and was subsequently approved for RETA or Rehabilitation, or paid the loan in full, can the borrower have the period of loan on the FFELP loan application backdated before the defaulted loan was paid in full or approved
A borrower who has a defaulted FFELP loan can reestablish eligibility to receive a FFELP loan if the loan is paid in full, or approved under RETA, or if the loan is rehabilitated. The borrower will regain loan eligibility for the academic year in which the borrower satisfies the payment.Top
How does a borrower with a loan in default become eligible for additional financial aid?
Borrowers whose loans are in default may become eligible to apply for additional financial aid if they pay six consecutive, agreed upon, voluntary, on-time payments. In addition, the borrower may establish eligibility for additional financial aid if they pay their defaulted loan in full, or establish eligibility through the consolidation or loan rehabilitation programs.Top
If a borrower's loan has been rehabilitated through the Rehabilitation Program, is the borrower required to repay the loan in accordance with the ten-year repayment rule?
Yes, the ten-year repayment plan remains in effect. The ten-year repayment period excludes periods of deferments, if still eligible, forbearance, or when borrowers are making reasonable and affordable payments (less than the regular monthly payment) under a forbearance agreement. New borrowers (approved on or after October 1, 1998) may qualify for an extended repayment plan of 25 years if they have a balance which is greater than $30,000.Top