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Before you Borrow

Choosing to borrow a federal loan is a decision to consider seriously before entering into a loan agreement.  Loans can be a wonderful way to make attending college possible but many students enter into loan agreements without fully understanding the consequences of their decisions.  Loans must be repaid when you’re no longer enrolled in school.  Student loans, unlike grants and scholarships, are borrowed money that eventually MUST be repaid, with interest.  A Loan Payment Calculator is available on FinAid.org to gauge what your monthly payments may be at various borrowing levels.

Students are strongly advised to borrow through the Federal Direct Subsidized and Unsubsidized Loan program first.  If additional loan funds are still needed, we suggest the Federal Direct PLUS (for the parents of dependent students) and the Federal Direct Graduate PLUS (for graduate students).  We advise families to exhaust all federal loan options before using private education loans.
 

Federal Direct Stafford Loan Program – Student is the Borrower

The Free Application for Federal Student Aid (FAFSA) serves as the primary application for this loan and must be completed each year if you wish to continue to obtain federal student loan funds. The web site is www.fafsa.ed.gov to apply.  There are 2 components to the Direct Loan Program which are Subsidized and Unsubsidized.
 
 

The current interest rate for an undergraduate Subsidized & Unsubsidized Loan is:  4.66%.

A 1.073% federal origination fee is applied to all subsidized and unsubsidized loans.
 
 

Direct Subsidized Loans are need based student loans that include full interest subsidy during the in school period.  This means that the federal government will pay your interest while you are in school and your loan principal is deferred.

Direct Unsubsidized Loans are student loans that are not based on need.  Therefore, quarterly interest payments are required or the interest will be capitalized upon repayment.  This means that your unpaid interest is added to the principal.

Repayment of both Direct Subsidized and Unsubsidized loans begins six months after student ceases enrollment or enrolls in fewer than 6 credits.  Repayment may extend for up to ten years.

The exact amount of loan eligibility is determined by the following formula: educational costs minus financial aid, minus expected family contribution as calculated by the U.S. Dept. of Ed.

Grade Level

Credit Requirement

Direct Subsidized Limit

Direct Unsubsidized Limit

Direct Extended Unsubsidized Limit (1)

First Year

0-29

$3500

$2000

$4000

Second Year

30-59

$4500

$2000

$4000

Third Year

60 +

$5500

$2000

$5000

Fourth Year

60+

$5500

$2000

$5000

Fifth Year

60+

$5500

$2000

$5000

Grad

   

$20,500

 


Annual amount may be limited based on the Cost of Attendance and other financial aid received.

(1) Direct Extended Unsubsidized is available only to independent students and dependent students whose parent(s) have been denied a Direct PLUS loan.  Detailed information for the Federal Direct Loan can be found at www.studentloans.gov or call 1-800-557-7394 for assistance.

New student borrowers must complete direct loan entrance counseling and electronically sign a master promissory note (MPN). The Loan Counseling Process is mandated by the federal government to ensure that students understand their rights/obligations as a borrower.  These two processes must be completed on line at www.studentloans.gov.  Your FAFSA pin is needed to sign the MPN.

 

Federal Direct Parent Plus Loan – Parent is the borrower

This program allows creditworthy parents of full or half time dependent undergraduates to borrow up to the total University costs minus other financial aid.  The interest on the Direct PLUS Loan is fixed at 7.21%. Repayment normally begins within sixty days after the second disbursement but can be deferred until after the student graduates.  There is a ten year repayment period. If a parent is denied a Direct PLUS Loan, the student is eligible to borrow additional Direct Unsubsidized Loan funds.  When determining the amount to borrow, consider the origination fee. The total origination fee is 4% which is deducted from the loan proceeds.

We recommend that the PLUS application be submitted no earlier than May 1st as the credit check expires after 90 days.  Parents can apply for the PLUS loan and submit the master promissory note at www.studentloans.gov (1-800-557-7394)

 

Alternative Loans – Student is the borrower with a credit worthy cosigner

Students and their families can borrow additional loan funds to help meet their college costs.  These loan programs are provided by commercial lenders and are not supported by state or federal financial aid funds. Maximum loan amounts, borrower qualification, repayment schedules and interest rates vary.  If you apply for an Alternative Loan you should request a loan for the total amount you need for both terms of the academic year on a single application.  Students may borrow up to the cost of attendance minus all other financial aid.

All loans are transferred electronically in to the student account no earlier than 10 days prior to the start of each semester.

Click to view alternative loan lenders

 

LOANS

Federal Direct Loans

Federal Direct Parent PLUS Loans

Federal Direct Graduate PLUS Loans

Alternative Loans