Borrower Education

The world of student aid is complicated. If you are feeling frustrated, know that you are not alone. We are here to help…

Before You Borrow

Shop Around

Many schools offer degrees/certifications you may be looking for. One tool you can use to compare school performance as well as cost can be found at the College Navigator. Here you can research institutions by name, location, program, or by institutional characteristics. Available institutional information is divided into ten distinct categories:

  • General Information
  • Financial Aid
  • Admissions
  • Program Majors
  • Accreditation
  • Estimated Student Expenses Before Aid
  • Enrollment
  • Retention/Graduation Rates
  • Varsity Sports Teams
  • Campus Security Information

When You Select a School

Decide on a Payment Strategy

Once you have selected a school and program of study, it is time to plan your tuition payment strategy. Financial Aid is money to help you and your family cover educational expenses. It is intended to supplement (not replace) the amount you and your family can afford. Keep in mind that it is ultimately the responsibility of you and/or your family to finance your education. Financial assistance comes from a variety of sources.

If you have to take out student loans, you essentially have two choices: federal student loans and private loans.

For most borrowers, federal student loans are the best option. When you start to pay back your federal loans, the interest rate will be fixed, which will help you predict your payments after graduation. And in some cases, the federal government will pay the interest on your loans while you are in school – these loans are called subsidized loans.

Other student loans are generally private student loans. The most common private student loans are offered by banks. Their interest rates are often variable, which means your interest rates and payments could go up over time. Private loans can also be more expensive – rates have been as high as 16% over the past couple of years. And when it is time to repay, private loans may not offer as many options to reduce or postpone payments.

Federal Aid

The William D. Ford Federal Direct Loan Program (FDLP) is the largest federal student loan program. Under thisprogram, the U.S. Department of Education is your lender. There are four types of Direct Loans available:

  • Direct Subsidized Loans are loans made to eligible undergraduate students who demonstrate financial need to help cover the costs of higher education at a college or career school.
  • Direct Unsubsidized Loans are loans made to eligible undergraduate, graduate, and professional students, but in this case, the student does not have to demonstrate financial need to be eligible for the loan.
  • Direct PLUS Loans are loans made to graduate or professional students and parents of dependent undergraduate students to help pay for education expenses not covered by other financial aid.
  • Direct Consolidation Loans allow you to combine all of your eligible federal student loans into a single loan with a single loan servicer.

The Federal Perkins Loan Program is a school-based loan program for undergraduates and graduate students with exceptional financial need. Under this program, the school is lender. (Applied Tech does not participate in the Federal Perkins Loan Program).

The Federal Pell Grant, unlike a loan, is a need-based grant for low income undergraduates that does not have to be repaid. Federal Pell Grants usually are awarded only to undergraduate students who have not earned a bachelor’s or a professional degree. Grant amounts are dependent on: the student’s expected family contribution (EFC); the cost of attendance (as determined by the institution); the student’s enrollment status (full-time or part-time); and whether the student attends for a full academic year or less.

Military Veterans Assistance – Both the federal government and nonprofit organizations offer money for college to veterans, future military personnel, active duty personnel, or those related to veterans or active duty personnel.

State and Local Aid

Workforce Investment Act (WIA), Trade Adjustment Assistance, (TAA), and the Adult Dislocated Worker Programs provides increased flexibility for state and local officials to establish broad-based labor market systems using federal job training funds for adults, dislocated workers and youth. In Missouri, these systems are administered by the Missouri Career Centers.

Vocational Rehabilitation is administered by the Missouri Department of Social Services and can provide eligible individuals with services needed to enter, remain in, or return to suitable employment.

Applying for Financial Aid

All students must complete the Free Application for Federal Student Aid (FAFSA) at Our school code is 030686.

You will need your Federal PIN (sent by the U.S. Department of Education) when you complete the FAFSA online. You will use this PIN as your electronic signature and it represents the same legal obligation as your written signature.

Every Federal Direct Loan first time borrower must complete loan entrance counseling at This tutorial outlines your rights and responsibilities as a federal loan borrower and is followed by a brief quiz. The counseling takes approximately 20-30 minutes to complete.

New Federal Direct Loan borrowers also must sign a Federal Direct Stafford Loan electronic Master Promissory Note (MPN).

  • You will use your Federal FAFSA PIN to sign the MPN.
  • You need two references. Please provide the complete name, address, and telephone number for two people who have known you for at least one year and who live at different addresses.
  • You must use your full legal name as it appears on your social security card.
  • Please note that you must complete the entire process in a single session. If you leave the site before signing the MPN, you must start over from the beginning.

You do not have to complete a new MPN if you have already signed a Federal Direct MPN for Applied Technology Services or another Federal Direct Loan institution. For information about your current Federal Direct Loans, please visit the Federal Direct  Loan servicing site if you already have a loan:

When Enrolled in School

Managing Existing Loan Balances

It is important that you continue to manage existing student loans even while you are enrolled in school. This may include one of the following:

  • Continue to make loan payments as agreed on existing loan balances
  • Request a Deferment
  • Request Forbearance

When in Repayment


You don’t have to begin repaying most federal student loans until after you leave college or drop below half-time enrollment. However, PLUS loans enter repayment once your loan is fully disbursed (paid out).

Your loan servicer or lender must provide you with a loan repayment schedule that states when your first payment is due, the number and frequency of payments, and the amount of each payment. Keep in mind that your loan may have a grace period.

A grace period is a set period of time after you graduate, leave school, or drop below half-time enrollment before you must begin repayment on your loan. The grace period gives you time to get financially settled and to select your repayment plan. Not all federal student loans have a grace period. Note that for most loans, interest will accrue during your grace period.

  • Direct Subsidized Loans, Direct Unsubsidized Loans, Subsidized Federal Stafford Loans, and Unsubsidized Federal Stafford Loans have a six-month grace period before payments are due.
  • PLUS loans have no grace period. They enter repayment once they are fully disbursed but may be eligible for a deferment. Contact your loan servicer for more information.
  • If you received a Federal Perkins Loan, check with the school where you received your loan.

 Repayment Plans

  • Standard Repayment Plan
    • Direct subsidized and unsubsidized loans
    • Subsidized and unsubsidized Federal Stafford loans
    • All PLUS loans
    • Payments are a fixed amount of at least $50 per month
    • Up to 10 years to repay
  • Graduated Repayment Plan
    • Direct subsidized and unsubsidized loans
    • Subsidized and unsubsidized Federal Stafford loans
    • All PLUS loans
    • Payments are lower at first and then increase, usually every two years
    • Up to 10 years to repay
  • Extended Repayment Plan
    • Direct subsidized and unsubsidized loans
    • Subsidized and unsubsidized Federal Stafford loans
    • All PLUS loans
    • Payments are fixed or graduated
    • Up to 25 years to repay
  • Income-Based Repayment Plan
    • Direct Subsidized and Unsubsidized Loans
    • Subsidized and Unsubsidized Federal Stafford Loans
    • All PLUS loans made to students
    • Consolidation Loans (Direct or FFEL) that do not include Direct or FFEL PLUS loans made to parents
    • Your maximum monthly payments will be 15 percent of discretionary income, the difference between your adjusted gross income and 150 percent of the poverty guideline for your family size and state of residence (other conditions apply)
    • Your payments change as your income changes
    • Up to 25 years to repay
  • Pay-As-You Earn Repayment Plan
    • Direct Subsidized and Unsubsidized Loans
    • Direct PLUS loans made to students
    • Direct Consolidation Loans that do not include (Direct or FFEL) PLUS loans made to parents
    • Your maximum monthly payments will be 10 percent of discretionary income, the difference between your adjusted gross income and 150 percent of the poverty guideline for your family size and state of residence (other conditions apply)
    • Your payments change as your income changes
    • Up to 20 years to repay
  • Income-Contingent Repayment Plan
    • Direct Subsidized and Unsubsidized Loans
    • Direct PLUS Loans made to students
    • Direct Consolidation Loans
    • Payments are calculated each year and are based on your adjusted gross income, family size, and the total amount of your Direct Loans
    • Your payments change as your income changes
    • Up to 25 years to repay
  • Income-Sensitive Repayment Plan
    • Subsidized and Unsubsidized Federal Stafford Loans
    • FFEL PLUS Loans
    • FFEL Consolidation Loans
    • Your monthly payment is based on annual income
    • Your payments change as your income changes
    • Up to 10 years to repay

If You Have Financial Difficulties

Take Action!

If you are delinquent and heading towards default, you must take some action. Do not ignore the problem as it will not go away on its own. It will follow you and will turn into a bigger problem the longer you ignore it.

It is important that you contact your lender or servicer immediately. They are there to help and they have many different options to help you protect your credit and, among other things, maintain the ability to receive future student aid.

If you do not know who your loan servicer is, log onto NSLDS where you will find a detailed account of all your student aid information including your servicer(s).


Default is a “big deal.” The federal government can withhold your tax refunds, you lose benefits like deferment, forbearance and flexible payment options, your loan holder can garnish up to 15% of your wages, your loan balance can increase by up to 25% due to collection costs, your loan can be placed with a collection agency, you can hurt your career, and you can be sued for the entire loan amount .

Default damages your credit score. And you can’t escape the fact that your loans must be repaid. If you’re in default, contact your loan holder or servicer immediately. They can help you find a solution and avoid some of the consequences.


When it comes to student loans, bankruptcy is rarely the answer. Student loans are typically not dischargeable through bankruptcy. In all likelihood, you will still have to pay back your student loans even after bankruptcy.

The following timeline illustrates the date of major changes in the treatment of student loans under the US Bankruptcy Code and related changes to other legislation:

  • 2011: President Obama issues an executive order making the new version of income-based repayment available to borrowers two years earlier. To be eligible, borrowers may not have any loans from before 2008 and must have at least one loan in 2012 or a later year.
  • 2010: The Health Care and Education Reconciliation Act of 2010 (P.L. 111-152, 3/30/2010) created a new version of income-based repayment. The new version cuts the monthly payment by a third, to 10% of discretionary income, and forgives the remaining debt after 20 years in repayment instead of 25 years. The new version is effective for new borrowers as of July 1, 2014. Borrowers with previous federal student loans as of June 30, 2014, are not eligible for the improved income-based repayment terms.
  • 2007: The College Cost Reduction and Access Act of 2007 (P.L. 110-84, 9/27/2007) added income-based repayment as an option within both the FFEL and Direct Loan programs. This repayment plan bases monthly loan payments on 15% of discretionary income, with discretionary income defined as the amount by which adjusted gross income exceeds 150% of the poverty line. After 25 years in repayment, the remaining amount owed is forgiven. This yields a lower monthly payment than the income-contingent repayment plan. The use of 150% of the poverty line as a threshold aligns the repayment plan with standards for bankruptcy fee waivers.
  • 2006: The wage garnishment amount was increased from 10% to 15% by the Deficit Reduction Act of 2005 (P.L. 109-171, 2/8/2006).
  • 2005: The US Supreme Court upholds the government’s ability to collect defaulted student loans by offsetting Social Security disability and retirement benefits without a statute of limitations. See Lockhart v US (04-881, December 2005).

Bottom Line:

If you are having financial difficulties, call you lender or loan servicer and talk to them about your options.