Federal Perkins Loans
This is a government-funded, low-interest loan for undergraduate
students who have demonstrated financial need. The Financial Aid
Office will award this and send paperwork in your award packet if you
qualify. Perkins Loan funds are limited.
Federal Stafford Loans
A Federal Stafford Loan is one of the most economical student loans
available. There are two types: 1) the Subsidized Stafford Loan is
awarded based on financial need. The government pays the interest on it
while you are enrolled at least half-time and during grace and deferment
periods. 2) The Unsubsidized Stafford Loan is awarded regardless of
financial need and accrues interest from the time the funds are disbursed.
Your loan may be a combination of the two types. Repayment on either type
does not begin until six months after you graduate, withdraw or drop below
half-time.
PLUS -- If the Stafford Loan and your other financial aid does not
cover all your costs, a parent can apply for a Federal PLUS (Parent Loan for
Undergraduate Students). You can apply online at www.aesuccess.org or obtain a paper Master
Promissory Note from your bank or the Financial Aid Office. If a parent is
denied the PLUS, the student is then eligible for an additional Stafford Loan of
up to $4000 in unsubsidized funds for the first year.
Alternative Loans -- Additional private loans, generally referred to as
"alternative loans" are also available to students to bridge any funding
gaps. Some will also allow you to pay previous balances. Most
students will need a co-borrower. Payment typically can be deferred until
after graduation, but interest accrues from the time the loan is
disbursed. Additional information on this type of loan is available
through the Financial Aid Office.
Key Terms
Deadlines - There are no specific deadlines,
but it is best to complete the Stafford and PLUS application processes before
July 31. Applying late may delay your funds.
Disbursement - Money is sent, usually via
electronic funds transfer (EFT), two times during the academic year. For
example, if the loan is for the academic year, half the loan will be disbursed
at the beginning of the fall semester and half at the start of the
spring.
Fees - Some banks charge origination fees of
1-3%. However, some Keystone BEST lenders do not charge any
fees up-front. A complete list of lenders with zero up-front fees can be
found at www.pheaa.org
Grace Period - Six months after graduating,
withdrawing or dropping below half-time enrollment status.
Interest - The accruing interest on a
subsidized loan is paid by the Federal Government during your in-school,
deferment and grace periods. The interest that accrues on unsubsidized
loans is the responsibility of the borrower. Interest will be billed
quarterly. You may choose to pay it at this time or let it accrue until
your repayment begins. However, it is recommended that the interest be
paid on the quarterly basis. Otherwise, it will be capitalized and added
to your principal balance.
Interest Rates - The interest rate will be a fixed rate of 6.8% for loans disbursed after July 1, 2006.
MPN - This stands for Master Promissory
Note. This is the loan application. You only need to file it once
during your college career, and it will be re-certified each year.
Repayment - Begins after the grace period
ends.
Term of Loan - The repayment period is
generally 10 years but may be extended up to 30 years through loan
consolidation. The minimum payment is $50 per month.
Federal Plus Loan
When a parent wants to help finance a child's education, the Federal
PLUS (Parent Loan for Undergraduate Students) is a good option. A
PLUS is not based on need but on the parent's credit-worthiness.
PLUS is disbursed directly to the school in two installments, the same
as the Stafford Loan. However, repayment on this loan typically
begins 60 days after it is fully disbursed.
To be eligible, a:
- Student must qualify as your dependent.
- Parent and student must be U.S. citizens, national, permanent resident aliens or eligible non-citizens.
- Student must be accepted or enrolled at least half-time in an
undergraduate program leading to a degree, certificate or diploma at an
eligible institution.
- Student must maintain satisfactory academic progress.
Loan Amounts
A Parent can borrow up to an amount equal to
the cost of attendance at Saint Vincent College, less any other
financial aid received. The cost of attendance includes tuition,
fees, room and board, books and miscellaneous living
expenses.
Interest Rate
The interest rate will be a fixed rate of 8.5% for loans disbursed after July 1, 2006.
Repayment
Although repayment usually begins 60 days after
the loan has been fully disbursed, some lenders will allow you to delay
your payments through "forbearance" for up to four academic
years. However, forbearance can be granted for no more than 12
months at a time. While on forbearance, you will receive
quarterly interest statements. Paying the interest as it accrues
each quarter will save you money over the term of the loan because any
accrued interest not paid will be added to the principal balance at the
end of the forbearance period. When the loan does enter
repayment, interest will be calculated on the higher principal balance,
and the total amount you will repay over the life of the loan will
increase.
