Loan Programs Available

Most loans are based on need, as determined through the FAFSA form, while there are others available to all students.  Loans, however, are a type of financial aid that do have to be repaid, usually within 10 years of graduation or exiting the college. The following gives a brief description of each loan and its corresponding need requirements.

FEDERAL PERKINS
Federal Perkins loans are available for early filers (by March 1st) who demonstrate financial need as calculated by the Federal Processor.  Perkins loans are the most attractive of the loans, having a smaller interest rate and longer grace period (nine months), in comparison to other loans.  The college is the lender, and the government pays the interest on these loans while the student is in school and during the grace period.  Because it is a limited fund, it is awarded on a first-come, first-served basis until the fund is exhausted.  The current interest rate on Perkins Loans is 5%.

FEDERAL SUBSIDIZED STAFFORD
Federal Subsidized Stafford Loans are loans available to students with financial need based on the EFC calculated by the Federal Processor.  Subsidized means that the government pays the interest on the loan while the student is in school and during the grace period (six months).  

FEDERAL UNSUBSIDIZED STAFFORD
The Unsubsidized Stafford Loan is essentially the same loan as the Federal Subsidized Stafford, with one exception: the loan begins accruing interest immediately upon issue.  The interest can be capitalized (added to the principle of the loan) or can be paid each year.  Paying the interest yearly is recommended, as the student does not accrue interest on the interest already accrued.                 

Both the Subsidized and Unsubsidized Stafford loans are:

• Available to students regardless of FAFSA filing time. 
• The grace period for these loans is six months from the date of the last class attended, regardless of whether or not the student graduates.  This means that even if the student decides to take a semester off, he/she could still be held responsible for a loan payment.
• A maximum of $3,500 as a freshman and $4,500 as a sophomore may be borrowed. The financial aid award can be all Subsidized, all Unsubsidized, or a combination of the two, depending upon need. However, the award cannot exceed these yearly limits.
• Subsidized Loans originated on or after July 1, 2008 the interest rate is 6.0%.  PLEASE NOTE:  The College Cost Reduction and Access Act of 2007 cut the fixed interest rates on newly originated subsidized Stafford loans to 6.0% (2008-09), 5.6% (2009-10), 4.5% (2010-11) and 3.4% (2011-12), with a return to 6.8% in 2012-13. 
• Unsubsidized Loans originate on or after July 1, 2007 the interest rate is 6.8%.
• Origination and default fees may be charged up to 2% of the loan amount and are taken up front.
• The student must sign a Master Promissory Note (MPN) before the funds will be disbursed, which can done electronically.
• All first-time borrowers must complete the entrance loan counseling requirement before they receive their first disbursement.
• All first-time borrowers must be enrolled 30 days before receiving their first disbursement.
• The student must choose a lender (bank or credit union) for the Stafford and PLUS loans.

FEDERAL PARENT LOAN FOR UNDERGRADUATE STUDENTS (PLUS)
The PLUS is a loan for parents whose child's financial aid package has not fully met the Cost of Attendance.  The PLUS can be issued for as much as the difference between the financial aid package offered to the student and the Cost of Attendance.  As the name implies, this loan is for dependent undergraduate students only.  For loans guaranteed on or after July 1, 2006 the interest rate is 8.5%. There are default and origination fees, up to 4% taken up front. This loan is not automatically awarded, therefore, the student must contact the Financial Aid Office should they be interested.