Investing in your future
For many students, scholarships and grants make up only part of their total financial aid package. Education loans are very useful in helping with college costs, but we encourage students to borrow only what they need and what they can afford to repay.
After applying for aid, you will receive a financial aid package, which will detail what types of loans you may be eligible for and how much you may need to borrow.
There are four different types of loans for which you may be eligible, each with their own advantages and limitations as outlined below. Student loan promissory notes and disclosure statements should be kept in a safe place until all loans are paid in full.
Federal Direct Subsidized & Unsubsidized Loan
Federal loans for students who qualify through the Free Application for Federal Student Aid (FAFSA).
This loan has a fixed interest rate as of July 1, 2016 of 3.76% with a 1.068% fee which will be deducted from the proceeds that are sent to the school.
There are two types of Federal Direct loans:
- Subsidized loans neither require repayment nor accrue interest while you are enrolled at least half time.
- Unsubsidized loans can be deferred while in school, but interest accrues to the borrower and must either be paid or capitalized. The student does have the option to make interest-only payments while they attend college.
The Federal Direct Loan Program has counseling requirements. If you are a first-time borrower of the Federal Direct Loan you will be required to complete Direct Loan entrance counseling and a Master Promissory Note (MPN). You can do this online by visiting studentloans.gov. You will need your FSA ID (user name and password) to sign in.
Loan limits vary based on the loan type, dependency status, and year in college:
1st Year student
- $3,500 subsidized loan limit
- $5,500 total loan limit for dependent students
- $9,500 total loan limit for independent students
2nd Year student
- $4,500 subsidized loan limit
- $6,500 total loan limit for dependent students
- $10,500 total loan limit for independent students
3rd-5th Year student
- $5,500 subsidized loan limit
- $7,500 total loan limit for dependent students
- $12,500 total loan limit for independent students
Exit Counseling is required when you graduate, leave school, or drop below half-time enrollment. Exit counseling provides important information you need to prepare to repay your federal student loan(s). You'll need to provide the name, address, e-mail address, and telephone number for your closest living relative, two references who live in the U.S., and current or expected employer (if known).
Federal PLUS Loan
A Federal Direct Parent Loan for Undergraduate Students (PLUS) may be an option for families who need to borrow more than the Federal Direct Loan limits.
This loan has a fixed interest rate as of July 1, 2016 of 6.31% with a 4.272% fee which will be deducted from the proceeds that are sent to the school.
Eligibility is limited to the cost of attendance minus any other financial aid the student is receiving. Because the funding for Federal Direct PLUS loans come straight from the US Department of Education, students and parents do not have to find a lender to borrow through this program
Denial of an application for the Federal Direct PLUS loan may make the student eligible to borrow an additional amount ($4,000 or $5,000) of Federal Direct Unsubsidized Loan. Reduction or cancellation of the Federal Direct PLUS before or after disbursement can be requested by the parent borrower. Please contact the financial aid office.
To apply for a Federal Direct PLUS Loan you must be the parent of a dependent student. The parent borrower must have an FSA ID. With your FSA ID log in to studentloans.gov and select Request a Direct PLUS Loan and then Parent PLUS loan type. When you complete the application this will include a credit check that is good for 180 days. You will need to specify the loan amount and if you choose maximum amount, your loan will be processed for your maximum eligibility. Once you have completed the application you will receive notice from the Department of Education if you're approved or denied.
If approved, first-time parent borrowers will need to continue the process by selecting Complete Master Promissory Note for Parent PLUS.
If denied, the parent will be presented with serveral options. (e.g., obtain an endorser, appeal the decision, request additional Unsubsidized Loan for student instead of the PLUS Loan.)
Alternative/Private Student and Parent Loans
There are many options for student and parent alternative loans through private lenders. An alternative/private loan should only be used after you have considered the federal loans for which you are eligible.
Eligibility and features of alternative loans do vary with each lender.
FASTChoice offers a comparison of lenders that we feel have good alternative student and parent loan programs. When you apply online you could receive pre-approval from most lenders within 10 minutes. You will go through a short entrance counseling to help you decide if an alternative loan is for you.