Student Loan Information Guide
The Loyola University Office of Scholarships and Financial Aid recognize that financing a Loyola education may involve deferring some of the costs through a low interest loan program. Your educational investment will require informed financial decisions about loans, and we are committed to helping you understand your federal loan eligibility and options. We have designed this guide to provide information about the Subsidized Stafford Loan, the Unsubsidized Stafford Loan, and the Plus Loan for Graduate and Professional students, offered through the William D. Ford Federal Direct Loan Program. Students participating in the Direct Loan program borrow from the federal government.
TYPES OF LOANS
Subsidized Stafford Loan
A Subsidized Stafford Loan is a need-based loan, as determined by the FAFSA. The federal government pays the interest while you are enrolled at least half time. There is a six-month grace period after your last date of at least half-time enrollment before you begin repayment on the loan. The U.S. Department of Education will charge a 1.0 percent loan origination fee for processing your loan. However, direct loan borrowers receive an interest rate rebate of 0.5 percent, reducing the up front fee to 0.5 percent. Upon entering repayment, borrowers must make their first 12 loan payments on time to keep this benefit.
For GRADUATE and PROFESSIONAL STUDENTS: The interest rate is fixed at 6.8 percent for all Subsidized Stafford Loans with a first disbursement on or after July 1, 2006.
***IMPORTANT ANNOUNCEMENT***
The Budget Control Act (BCA) of 2011 was signed into law on August 2, 2011. The Act significantly affects graduate and professional students. Effective for loans made beginning on or after July 1, 2012, graduate and professional students are no longer eligible to receive Federal Direct Subsidized Loans. The annual loan limit for graduate and professional students remains unchanged at $20,500, but this amount will now be limited to Direct Unsubsidized Loans. Also, effective July 1, 2012, graduate and professional students are no longer eligible to receive the rebates associated with Unsubsidized and Graduate Plus Loans. Therefore, the Department of Education will charge an origination fee of 1% for Unsubsidized Loans and 4% for Graduate Plus Loans.
Unsubsidized Stafford Loan
An Unsubsidized Stafford Loan is a non-need-based loan. You are responsible for all interest from the time the loan is disbursed until it is paid in full. You may pay the interest while you are enrolled or allow it to accrue and be capitalized. For undergraduate, graduate and professional students, the interest rate is fixed at 6.8 percent. The U.S. Department of Education will charge a 1.0 percent loan origination fee for processing your loan. However, direct loan borrowers receive an interest rate of rebate of 0.5 percent, reducing the up front fee to 0.5 percent. Upon entering repayment, borrowers must make their first 12 loan payments on time to keep this benefit.
Plus Loans for Graduate and Professional Students
Graduate and Professional degree students are now eligible to borrow under the PLUS Loan Program up to their cost of attendance minus other estimated financial assistance. The requirements include a determination that the applicant does not have an adverse credit history. Applicants for these loans are required to complete the Free Application for Federal Student Aid (FAFSA). They also must have applied for their annual loan maximum eligibility under the Federal Subsidized and Unsubsidized Stafford Loan Program before applying for a Graduate/Professional PLUS loan. Students must complete an application/master promissory note online. The loan has a fixed interest rate of 7.9 percent and loan fees are 4 percent with an upfront interest rebate of 1.5 percent. Upon entering repayment, borrowers must make their first 12 loan payments on time to keep this benefit.
APPLYING FOR A FEDERAL DIRECT LOAN
Graduate and Professional students must be enrolled in a minimum of 5 credit hours in a degree-seeking program each semester in order to be eligible for federal loans. Students must be making satisfactory academic progress and must not be in default on any federal education loans.
MASTER PROMISSORY NOTE (MPN)
You must complete a Master Promissory Note (MPN). The MPN is a legally binding agreement to repay your loan to the Department of Education. In most cases, one MPN can be used for loans that you receive over several years of study. It is very important that you understand the long-term commitment you are making by signing this note. We encourage you to record all amounts that you borrow and keep all your loan paperwork together so you can keep track of your cumulative borrowing. The loan will not disburse to Loyola until you complete the Master Promissory Note.
You must sign the MPN online at http://studentloans.gov.
ENTRANCE COUNSELING REQUIREMENT
Borrowing money is a serious legal obligation. We want all of our students to fully understand their rights and responsibilities under this program. First-time undergraduate and graduate borrowers at Loyola must also complete an “Entrance Interview” before receiving funds. Students can complete this requirement online at www.studentloans.gov.
BORROWING LIMITS
Stafford Loan borrowing limits for Graduate/Professional students may borrow up to $20,500 in both subsidized and unsubsidized Stafford Loan funds (no more than $8,500 of this amount may be in subsidized loans).
CONTACT INFORMATION FOR THE FEDERAL DIRECT LOAN PROGRAM
Direct Loan Website: www.studentloans.gov
Repayment of your Direct Loan:
Borrower services at the Direct Loan Servicing Center
1-800-848-0979 or www.dl.ed.gov
Direct Loan Consolidation Center:
1-800-557-7392 or www.loanconsolidation.ed.gov