Student loans are a form of financial aid that requires repayment of the funds received, usually with interest.
Some loans may be in either the student's or the parent's name. All loans require a promissory note, and some require a separate application.
Federal Direct Loan Application
Federal Direct PLUS Loan Application
Federal Direct Loan There are two types of Federal Direct loans: subsidized and unsubsidized.
Federal law dtermines the interest rates each year based on current market rates. However, interest rates are fixed for the life of the loan.
Subsidized Direct Loans carry a fixed interest rate of 3.86% for loans disbursed on or after July 1, 2013.
Unsubsidized Direct Loans carry a 3.86% interest rate on undergraduate loans originated on or after July 1, 2013.
Unsubsidized Direct Loans carry a 5.41% interest rate on graduate loans originated on or after July 1, 2013.
Federal Direct Loans are charged a 1.072% origination and guarantee fee deducted when funds are disbursed.
The Federal Direct Loan amount on a student's award letter is an estimate based on the number of course credits, demonstrated need from the FAFSA, and academic grade level.
Students must complete Entrance Counseling and Master Promissory Note requirements before receiving Direct Loan funds.
Both requirements may be done online at www.studentloans.gov.
Subsidized Direct Loans:
Eligibility for a subsidized Direct loan is based on financial need as determined by the FAFSA.
Subsidized Direct Loans allow for a deferment of principal payments while the student is enrolled as at least a half-time student in a degree-seeking program.
Students are allowed a six-month grace period upon leaving college before making payments on principal and interest of the loan.
Interest subsidies while the student is in school are paid by the Federal Government.
Unsubsidized Direct Loans:
Unsubsidized Direct loans allow for deferment of principal payments while the student is enrolled as at least a half-time student in a degree-seeking program.
Students are allowed a six-month grace period upon leaving college before making payments on the principal of the loan.
IMPORTANT: Unsubsidized loans do not have an interest subsidy paid by the federal government. This means that interest will accrue on the loan during the in-school and six-month grace periods.
Students are strongly encouraged to make monthly interest payments on any unsubsidized loans while in school. Otherwise, the deferred interest will be capitalized, and this accrued amount will be added to the loan principal when repayment begins.
Applying for a Federal Direct Loan Direct loans require that the student borrower sign a Master Promissory Note (MPN) through an online process.
Master Promissory Notes as well as Loan Entrance Counseling is available through www.studentloans.gov.
Federal Perkins Loan
The Financial Aid Office awards federal Perkins loans to students based on a combination of significant need as demonstrated on the FAFSA and the availability of funds.
The interest rate for the Perkins Loan is 5%, and no interest or principal payments are due until nine months after a student graduates (or drops below half-time status).
Perkins Application Process The student must sign a promissory note before the loan can be credited. The promissory note will be available at the start of the fall semester.
The student must also attend an entrance loan counseling session.
Contact the Financial Aid Office at 610-902-8188 or email@example.com for information about times and location.
Federal Direct PLUS Loans
PLUS loans are borrowed by parents to assist in paying college costs for their children.
The PLUS loan carries a fixed interest rate of 6.41% for loans disbursed on or after July 1, 2013.
Federal Direct Plus loans are charged an origination fee of 4.288%, which is deducted from the loan proceeds upon disbursement to the college.
This loan is a viable resource that many families use to help meet college costs after all other financial aid options have been exhausted.
To get more information and apply online, visit www.studentloans.gov.