|
 |
|
|
|
| Detailed Loan Information |
|
Student loans have become an essential component students use to finance their educational expenses. Loans,
by definition and regulation, must be repaid and therefore should be used sparingly and wisely. If you accept
a loan you are responsible for repaying the loan plus interest. Remember that the more you borrow the higher
the monthly repayment will be, so only take as much loan money as you will need.
Each loan program has specific eligibility criteria, repayment, cancellation, and deferment conditions. The
following descriptions are intended to provide enough general information for students and parents to make
informed decisions about taking out a student loan. Additional information can be found at
www.finaid.com/loans.
Stafford Loans (Subsidized and Unsubsidized)
The Stafford Loan Program is a federally sponsored and regulated national student loan program for
undergraduate and graduate students. This loan is awarded by the University, Guaranteed by an approved
Guarantor and funded by private banks and credit unions.
Eligibility for the Subsidized Stafford Loan is based on financial need as determined by the federal
processor and the FAO. This loan has a fixed interest rate of 6.8%.
No payments are due and no interest accrues on the loan until 6 months after you leave school or drop below
half time enrollment.
Effective 2007-2008 academic year, the yearly maximums for this program are: $3,500 for a freshman, $4,500 for a sophomore, $5,500 for juniors
and seniors, and $18,500 for graduate students. Cumulative borrowing limits are $23,000 for an undergraduate
and $65,500 for a graduate student. This loan also has a maximum repayment period of 10 years. When a loan
is processed, a 2.5% origination fee may be deducted from the gross amount of the loan before disbursement.
(Borrowers repay the gross amount). To calculate your monthly repayment use the following link:
www.finaid.com/calculators/loanpayments.phtml.
The only difference between the Subsidized and Unsubsidized Stafford Loan is the deferment of the interest
payment. The interest on the Unsubsidized Stafford Loan begins immediately. Students can pay the interest
quarterly or allow the interest to add to the principle.
First time borrowers are required to complete an Entrance Interview and Maser
Promissory Note. Students only have to complete the Entrance and Master Promissory Note once in their
academic career. Use the following Links to Complete the Entrance
Counseling and Master
Promissory Note.
- The Entrance Interview will take approximately 20 minutes.
- The Entrance Interview completes the requirement for both loans.
- If you have received a Stafford Loan within the past three years you do not have to complete a new Master
Promissory Note.
- Be prepared to enter the lender code on the Stafford Master
Promissory Note.
Parent PLUS Loans
The PLUS loan is also a federally sponsored and regulated national student loan program. Parents of dependent
students can take out loans to supplement their children's aid packages, so the loan is actually the parent's
loan and not the student's. The maximum annual limit is the cost of education minus other aid. The interest
rate is fixed at 8.5%.
Checks or electronic fund transfers are co-payable to parent and school and are dual disbursed. The Plus
Loan does require a credit check and some parents may not be eligible the loan. If a parent is turned down
for a PLUS loan and receives a Letter of Denial the student may be eligible for additional Stafford Loan.
Repayment begins 60 days after the final disbursement of a multiple disbursement. Like the Stafford and
Perkins Loans, the PLUS loan also has a Master Promissory that must be completed. In addition, the parent
must also complete the PLUS Loan
Application and the PLUS
Master Promissory Note.
Federal Perkins Loan
A low-interest (5 percent) loan for both undergraduate and graduate students with exceptional financial need.
Your school is your lender. The loan is made with government funds with a share contributed by the school.
You must repay this loan to your school.
Eligibility for the Perkins Loan is based on financial need (as determined by the federal processor and the
FAO) as well as the availability of funds. Perkins loan awards are made to students using need and timing of
application as criteria.
This loan has a fixed interest rate of 5% and a maximum of 10 years to repay. No payments are due and no
interest accrues on the loan until 9 months after you leave school or drop below half time status. Cumulative
borrowing limits are $20,000 for an undergraduate degree and $40,000 for a graduate degree. To calculate your
monthly repayment use the following link: www.finaid.com/calculators/loanpayments.phtml.
Deferment and cancellation provisions are contained on the Master Promissory Note, which you must complete
prior to receiving the loan for the first time. An Entrance Interview must also be completed prior to
receiving the loan, and an Exit Interview is required upon leaving the University.
First time borrowers must complete a Perkins
Entrance Interview and Master Promissory Note. The process is similar to the Stafford Loan
Entrance and Master Promissory Note process except you do not need a lender code.
Consolidation Loans
Combines several student or parent loans into one bigger loan from a single lender, which is then used to pay
off the balances on the other loans.
Alternative Educational Loans
After the traditional loan options, like Perkins, Stafford and PLUS, have been exhausted students can look
into the Alternative Loan market. Unlike the Federal Loan Programs, Alternative loans are not regulated by
Federal Financial Aid Regulations. Alternative Loans are private educational loans each with its own unique
requirements. For information about Alternative Loan comparisons, go to www.wasfaa.net Click on "Student/Parents,
Private Loans, 4 Year Schools", and then choose PDF or Word Document.
After the traditional loan options, like Perkins, Stafford and PLUS, have been exhausted students can look
into the Alternative Loan market. Unlike the Federal Loan Programs, Alternative loans are not regulated by
Federal Financial Aid Regulations. Alternative Loans are private educational loans each with its own unique
requirements.
Since Alternative loans are not regulated there is no common criteria. The various lenders all try to put
out competitive products and it is up to the borrower to seek out the loan that fits their needs. At
www.wasfaa.net click on "Student/Parents,
Private Loans, 4 Year Schools", and then choose PDF or Word
Document. There are also brochures in the Financial Aid Office that students can browse.
|
|
|
|
