Student loans, unlike grants and work-study, are borrowed money that must be repaid, with interest, just like car loans and mortgages. Many students find that they must borrow money to finance a portion of their education. Before you borrow, consider carefully how much you will need to borrow and the burden your loans will impose after you leave school. The Financial Aid Administrator at your institution can provide you with more information on the responsibilities you assume when you borrow money.
Types of loans:
Entrance and Exit Loan Counseling
It is required by law that all students receiving Perkins and Stafford Loans undergo both entrance and exit counseling. This counseling provides critical information about your loans and your rights and responsibilities as a student borrower. This counseling can be done on the website indicated below:
Federal Perkins Loan Program
The Perkins Loan program is a low-interest (5%), long-term educational loan program available to undergraduate students demonstrating exceptional financial need. Interest is not charged, and repayment does not begin until 9 months after you graduate, withdraw from school, or your enrollment drops below half-time status.
You are required to complete Perkins entrance loan counseling each academic year that you are awarded a Perkins Loan. Your Perkins loan will not be available for you to use toward your charges until this requirement is met. Additionally, you will also be required to sign a Promissory Note that will be made available to you by your campus Business Office.
If you graduate, withdraw from school, or your enrollment drops below half-time status, exit interviews must be conducted as well.
- Subsidized Federal Direct Loan
A subsidized Federal Direct Loan is awarded based on financial need and accrues no interest while the student is enrolled in school at least half-time, during the grace period or during periods of deferment.
- Unsubsidized Federal Direct Loan
An unsubsidized Federal Direct Loan is not dependent upon need. Interest accrues from the time the loan is disbursed until final payment. The student has the option to make interest payments while in school and during the grace period.
For the period of July 1, 2012 through June 30, 2013, the following interest rates are in effect:
- 3.4% fixed rate on an undergraduate subsidized Federal Direct Loan
- 6.8% fixed rate on a graduate subsidized Federal Direct Loan
- 6.8% fixed rate on an unsubsidized Federal Direct Loan (undergraduate and graduate)
If you indicate on the FAFSA that you are interested in loans, we will automatically consider you for both subsidized and unsubsidized Federal Direct Loans, first awarding the maximum subsidized amount, then the maximum unsubsidized amount according to program limits and your eligibility.
Additional Information: Direct Loans on studentaid.ed.gov
Federal regulations require that we limit or reduce the amount of a Stafford Loan under certain prescribed conditions. These conditions are as follows: (1) you are an undergraduate and you apply for a Stafford Loan and are enrolled less than a full academic year (fall and spring semesters), or (2) you will complete all degree requirements at the end of the semester or term. If both of these conditions occur, the Stafford Loan amount may be reduced. We will make this adjustment and send you a revised award letter.
Direct Loan Entrance Counseling
First-time borrowers must complete entrance loan counseling and sign a promissory note with the U.S. Department of Education online at https://studentloans.gov prior to disbursement of funds.
Direct Loan Exit Counseling
Students who have graduated or are no longer enrolled who received Federal Direct Loans must complete exit counseling at www.nslds.ed.gov. Click here to download the Exit Counseling Guide.
Direct Loan Forgiveness Program
Education majors may qualify to have a portion of their Stafford loans forgiven. View loan forgiveness program information here.
Federal Direct Parent PLUS Loan
The Direct Parent Loan for Undergraduate Students (PLUS) is designed to assist the parents of dependent undergraduate students enrolled at least half-time in meeting educational expenses. The Federal Direct Parent PLUS Loan is a non-need-based program and the lender is the U.S. Department of Education. However, the parent borrower must pass a credit check. A completed current year Free Application for Federal Student Aid (FAFSA) must be on file for the student before a Parent PLUS loan can be processed. A parent may borrow up to the student’s full cost of attendance for educational expenses including tuition and fees, room and board, books and supplies, transportation and living allowance, less any other financial aid the student receives.
Parent PLUS Loans have a fixed interest rate of 7.9 percent. Interest is charged on the loan from the date the first disbursement is made until the loan is paid in full. Repayment begins within 60 days after the final loan disbursement or parent borrowers may choose to defer payments on a Parent PLUS loan until six months after the date the student ceases to be enrolled at least half time. Accruing interest can either be paid monthly or quarterly, or be capitalized quarterly.
Dependent students whose parents have applied for but were unable to get a PLUS Loan are eligible to receive additional Direct Unsubsidized Loan funds.
To complete the PLUS MPN:
- Go to www.studentloans.gov.
- Click the green “Sign In” button on the left. Enter your social security number, first two characters of your last name, date of birth and federal PIN.
- Click “Complete Master Promissory Note” at the center OR lower left of the page.
- Select Parent PLUS for the type of loan you would like to receive.
- Follow the instructions and read the information carefully to sign your MPN.
National Student Loan Data System (NSLDS)
The National Student Loan Data System (NSLDS) is the U.S. Department of Education's (ED's) central database for student aid. NSLDS receives data from schools, guaranty agencies, the Direct Loan program, and other Department of ED programs. NSLDS Student Access provides a centralized, integrated view of Title IV loans and grants so that recipients of Title IV Aid can access and inquire about their Title IV loans and/or grant data.