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Loans
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Student loans have long been a part of the array of federal financial aid programs and continue today as one important component of financing a higher education. There are several federally-funded programs, as well as privately funded programs, available to families. Loans represent financial aid that must be repaid over time and interest rates vary from program to program. Eligibility for borrowing through most of these programs is determined by filing the FAFSA on an annual basis and require at least half-time enrollment for all students. See the charts below that describe annual and aggregate borrowing limits and interest rates. Students should only borrow what they absolutely need to cover mandatory expenses.
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  • *Please note under HEOA Sec. 489, amended HEA Sec. 485B (d) (4) (20 U.S.C. 1092b), all potential students or parents of a student borrowing a Federal Student Loan will have their information submitted to the National Student Loan Data System (NSLDS), and that information will be accessible by guaranty agencies, lenders, and institutions determined to be authorized users of the data.*

    Direct Loans are in the student's name. Completion of the FAFSA is required. There are two types of Federal Direct Loans; subsidized and unsubsidized. Subsidized means the federal government pays the interest on the loan for the student as long as the student is enrolled at least half-time. Unsubsidized means the student must pay the interest that accrues during their college career or defer the interest payments until they graduate. For more information please click here.

     

    First time Direct Loan borrowers are required to complete Entrance Counseling and a Master Promissory Note (MPN). A MPN is a contract under which a borrower receives federally funded loans. These items can be completed electronically at StudentLoans.gov.

    Direct Loan Interest Rates and Aggregate Borrowing Limits

    Year Dependent Students Independent Students**
    First-Year Undergraduate (0-29 credits) $5,500—No more than $3,500 of this amount may be in subsidized* loans. $9,500—No more than $3,500 of this amount may be in subsidized* loans.
    Second-Year Undergraduate (30-59 credits) $6,500—No more than $4,500 of this amount may be in subsidized* loans. $10,500—No more than $4,500 of this amount may be in subsidized* loans.
    Third-Year and Beyond Undergraduate (60 or more credits) $7,500 per year—No more than $5,500 of this amount may be in subsidized* loans. $12,500 per year—No more than $5,500 of this amount may be in subsidized* loans.
    Graduate or Professional Degree Students Not Applicable $20,500 – all unsubsidized*
    Maximum Total Debt from Direct Loans $31,000—No more than $23,000 of this amount may be in subsidized* loans. $57,500 for undergraduates—No more than $23,000 of this amount may be in subsidized* loans.

    $138,500 for graduate or professional students—No more than $65,500 of this amount may be in subsidized* loans. The graduate debt limit includes all federal loans received for undergraduate study.

     

    *Interest rates are set every July 1st by Congress. Please click here for more information on current interest rates and origination fees.

    **Includes dependent students whose parents are unable to qualify for a PLUS Loan

  • PLUS Loan is a federal loan designed for graduate students or parents of undergraduate students to help finance their or their child’s college education. Completion of the FAFSA by the student is required. Payments of principal and interest typically begin after the loan has fully paid to the bill for the academic year. These payments may be deferred until the student graduates or is enrolled less than half-time. In some cases, an undergraduate student may borrow additional “unsubsidized” Direct Loans if a parent doesn’t qualify for the PLUS. For more information on PLUS, please click here. Families should consider their eligiblity for Federal Direct Loans before considering borrowing a PLUS.
  • Direct Consolidation Loan provides the opportunity for students who have separated from school and have from multiple federal programs to combine these loans into one loan with a single interest rate, payment plan and loan servicer. This option may not be in the best interest of everyone. Check with your loan provider for details.
  • Alternative (Private) Loans are privately-funded loans in the student name with varying repayment options, interest rates, etc. We strongly encourage students to compare loans before making a selection. One place to start your search is with ELM Select. In all cases, students and parents should consider their eligibility for Federal Direct Loans before borrowing a private loan.