Other Funding Options
The purpose of financial aid is to assist students in funding their education. After all available aid has been offered to you, you may still find yourself short on covering all of your educational expenses. If this is the case, a few alternatives exist that may help you meet your financial obligations.
Federal Direct Parent PLUS Loan
The Federal Direct Parent PLUS loan is a federally sponsored and regulated national student loan program. The PLUS Loan enables credit-worthy parents of undergraduate, dependent students to borrow funds to pay for their child's educational expenses. The funds are borrowed directly from the federal government and the loan will be serviced by a company contracted by the Dept. of Education. The servicer will be the point of contact for all repayment questions.
Details of the Federal Direct PARENT PLUS Loan
- Parent is the borrower.
- Fixed Interest Rate for the 2013-14 academic year is 6.41%
- Federal Processing Fee of 4%
- Repayment begins 60 days after the loan is fully disbursed. The parent can also request to defer payments
- While the parent or the dependent student is enrolled at least half-time.
- For an additional 6 months after the dependent child ceases to be enrolled at least half-time.
- Interest will begin to accrue on the loan once it disburses to the University.
- Interest payments may be tax deductible.
- If approved, Parent may borrow up to the student's Cost of Attendance less other financial aid.
Federal Direct Parent PLUS Loan Process- To Apply
- The Parent: Go to www.StudentLoans.gov – you will need either Internet Explorer or Firefox browser.
- Start by clicking on the 'Sign in' button. The parent borrower will need his/her own Federal pin number in order to access the Dept. of Education's system. If the parent does not have a pin, there is a link at the bottom of the site that will allow you to request a pin.
- Go to 'Request a Direct PLUS Loan' and select 'Parent PLUS'. After completion of the application, a credit check will be performed, and you will see the results immediately. Your PLUS Loan amount will be automatically divided equally between the fall and spring semesters. If you want to discuss alternatives to this 50/50 split, please contact the Financial Aid Office at (920) 465-2075.
- If you have been approved, continue to the PLUS Loan Master Promissory Note to complete the process. We will be notified of the results, and we will request the funds for you.
- If you are denied, the site will give you some options:
- Will Not Pursue PLUS Loan. If a parent is denied a PLUS loan, the Department of Education allows schools to offer a limited amount of additional Unsubsidized Loan to your student. If you choose this option (Will Not Pursue PLUS Loan), the Financial Aid Office will receive notification of this, and we will offer your son/daughter additional Unsubsidized Federal Direct Loan that they can accept if needed. We will send you an email notifying you of this action.
- Obtain an endorser. With a credit-approved endorser (or cosigner), the loan may be approved. See details on the site. The endorser would log in to www.studentloans.gov using their own PIN, and click 'Endorse Direct PLUS Loan.' The endorser will need the Loan Reference Number from the original PLUS Loan application.
- Appeal the credit decision. Details explained on the site or contact the Department of Education Applicant Services at 1-800-557-7394 to follow up regarding Parent PLUS credit decisions. The Department of Education will review the appeals process and documentation needed.
If you have taken out more than one Parent PLUS loan, you have the option to consolidate all of your Parent PLUS Loans into one loan for repayment purposes. Please note that you cannot combine student loans with parent PLUS Loans. Specific consolidation links and information can be found at www.studentloans.gov under 'Tools and Resources.'
Private Educational Loans (also called Alternative Student Loans)
After all of the federal loan options have been explored and exhausted, students can look into the Private Educational Loan market. Unlike the federal loan programs, private educational loans are not regulated by the government. Each lender has its own set of application, credit, and co-signer requirements, and interest rates may be fixed or variable. The borrower is the student, but lenders may require a co-signer when there is limited student credit history. Generally, alternative student loan payments are deferred while the student is in school at least one-half time (with the interest on the loan accruing).
UW-Green Bay will work with any lending institution. In choosing a lender, it's always a good idea to start with a lender that you currently work with or you know has been in the student loan business for a significant amount of time. Be cautious of lenders whose names you do not recognize or those who offer you 'teaser' or introductory rates or prize incentives. Below are some questions you should ask when considering an alternative loan lender.
- What is my interest rate? Lenders will advertise 'as low as' rates but it's important to know what your rate will be. Is it variable or fixed?
- If variable, how often will the interest rate change and how will I be notified?
- What fees will be charged (reducing the proceeds)?
- How often do you capitalize interest on the loan? Lenders who capitalize interest less frequently will save you more money over time.
- Is there a prepayment penalty?
- Can I defer payments while in school and what happens if I have difficulty making payments?
- What benefits or rate discounts are offered, and what conditions have to be met in order to obtain the benefits?
- Does the lender have any local presence (if that is important to you)?
New federal regulations require private loan borrowers to complete a Loan Self-Certification Form as part of the application process. A copy of this form is linked below. If you need assistance in completing the Self Certification form, please contact the Financial Aid Office.
Home Equity Loan
As families compare their options for additional funding, a home equity loan or home equity line of credit may be one to explore as well. This option allows homeowners to borrow against the equity in their home. Because the loan is secured by property, the lender's risk is low and therefore interest rates may be lower than with many other forms of consumer borrowing. Each lender determines loan terms and conditions, interest rates and repayment requirements, and the application will be completed directly through the lender. Interest may be tax deductible.