Student loans, unlike grants and work-study, are borrowed money that must be repaid, with interest, just like car loans and mortgages. You cannot have these loans canceled because you didn’t like the education you received, didn’t get a job in your field of study or because you’re having financial difficulty. Loans are legal obligations, so before you take out a student loan, think about the amount you’ll have to repay over the years. Learn more about managing your student loan.
As with any student loan, be conservative and only borrow what you absolutely need.
Promissory notes for Stafford loans are for both subsidized and unsubsidized loans. GraduatePLUS and ParentPLUS require a separate promissory note. A master promissory note is valid for ten years. If a PLUS loan includes an endorser, the promissory note is only valid for that one endorsed loan and a new promissory note must be signed for another PLUS loan.
Federal Direct Loans
The U.S. Department of Education administers the William D. Ford Direct Loan program to provide low interest Stafford and PLUS Loans for students who are attending at least half-time. Under this program, funds for your student/parent loan come directly from the federal government. The Department of Education serves as the lender for all Direct Loans.
Subsidized and Unsubsidized Stafford loans
The Federal Direct Stafford Loan is the most common student loan program for funding undergraduate and graduate education. There are two types of Stafford loans, Subsidized and Unsubsidized. The subsidized loan is only available to students with financial need. A federal subsidy pays the interest that accrues on the loan while the student is enrolled at least half-time. Additional student loan options are available through the unsubsidized Stafford loan program. Regardless of financial need, a student may qualify for an unsubsidized loan.
Parent PLUS loans
Unlike the Stafford loan, eligibility for the Parent PLUS loan is based on the borrower’s credit worthiness.
Private Education Loans
We strongly encourage you to use all available federal loan programs before using private loans.
- Credit approval is required and the process is more comprehensive than the Federal PLUS Loan
- Students with an insufficient credit history may qualify with a co-signer
- The minimum loan is $1,000; borrowing limits may vary by lender
- Unlike federal loans, this type of loan may be used to pay a previous semester’s balance.
Private Education Loan lenders
|Federal Loans||Private Loans|
|Co-signer Requirement||No||Depends on Loan|
|Credit Check Requirement||Stafford-No
|Deferment||Yes||Depends on Loan|
|Grace Period||Stafford- 6 months
PLUS- 6 months
|Depends on Loan|
|Fees||Stafford-Up to 1.057%
PLUS-Up to 4.228%
|Depends on Loan|
|Penalty for Early Repayment||No||Depends on Loan|