There are several types of loans to assist students, whether you are dependent, independent, undergraduate, or graduate student. There are also loans to help parents of dependent students with paying for college. The chart below will help you understand the basic differences between each type of loan.
Eligibility for federal student loans will be listed on UE's Financial Aid Notification Letter, for those who have filed the Free Application for Federal Student Aid. Instructions and required forms will be included. Federal student loans may be repaid by the student after leaving college.
After exhausting the student's eligibility for federal student loans, some families choose to pay any remaining balance with additional loans. Creditworthy parents of dependent students who have filed the FAFSA may choose to pay their out-of-pocket college expenses by borrowing a Federal Direct Parent Loan for Undergraduate Students (PLUS). Parents usually begin to repay the Federal Direct PLUS during college, while loans in the student's name offer deferred repayment after leaving college. For new students and repeat UE borrowers, an application for the Federal Direct PLUS is enclosed with the student's Financial Aid Notification letter. Applications for the Federal Direct PLUS are available from the UE Office of Financial Aid upon request. In contrast to the Federal PLUS Loan, many private educational lenders offer loans in the student's name, with repayment deferred until after college. See below for more details about private/alternative student loans.
Borrowers may request more PLUS or private loan funds than is due to UE in order to have extra funds for educational expenses that arise throughout the year, such as books, supplies, and transportation. The maximum PLUS or private loan that borrowers may request for one year is determined by subtracting the total aid (scholarships, grants, and student loans) received by the student from the official Cost of Attendance (COA) budget. Various COA budgets for UE students can be found online.
Educational Loan Comparison Chart
|Type of Loan||Federal Direct Stafford Loan||Federal Perkins Loan||Federal Nursing Loan (Nursing majors only)||Federal Direct Parent Loan for Undergraduate Students||Private Loans|
|Who is the borrower?||Student||Student||Student||Parent, stepparent, or legal guardian||Student (adult cosigner usually required; does not have to be parent)|
|Is eligibility based on financial need?||Subsidized Stafford: Yes, Unsubsidized Stafford No||Yes||Yes||No||No|
|Eligibility based on creditworthiness?||No, all FAFSA filers are eligible||No, college must offer loan; funds are limited||No, college must offer loan; funds are limited||Yes||Yes (cosigner's)|
|When does repayment begin?||Six months after leaving college or dropping below half-time enrollment||Nine months after leaving college or dropping below half-time enrollment||Nine months after leaving college, dropping below half-time enrollment, or leaving the nursing program||During student's enrollment; 60 days after final annual disbursement||Contact Lender|
|Does interest accrue during college?||Subsidized Stafford: No, Unsubsidized Stafford: Yes||No||No||Yes||Yes|
|Interest rate for 2012-13||
Subsidized 3.4% fixed
Unsubsidized 6.8% fixed
|5% fixed||5% fixed||7.9% fixed||Variable Rates Contact Lender|
|Annual amount available||
Up to $4,000
Rarely is this amount offered as funds are limited
Freshmen/sophomores: up to $2,500
Juniors/seniors: up to $4,000
Funds are limited
|Cost of attendance minus all other financial aid||Cost of attendance minus all other financial aid|
* For undergraduate students, portions of the Federal Direct Stafford Loan amounts listed above may be subsidized, based on financial need. The maximum amount that can potentially qualify each year to be subsidized is $3,500 freshman year, $4,500 sophomore year, and $5,500 junior and senior years. Furthermore, additional unsubsidized amounts are available for independent students and for students whose parents are denied the creditworthy Federal Direct PLUS ($4,000 for freshmen and sophomores; $5,000 for juniors and seniors).
Private (Alternative) Loans Based Upon Credit
These educational loans are available from private lenders and offer additional financial assistance if you have exhausted all other sources of funding for your education. You should use all grants, scholarships and federal loans for which you are eligible before considering any private loan. Each private loan lender has different eligibility requirements, loan rates, repayments terms, and conditions. Many lenders require a cosigner and some may require payment of interest while you are in school. You may select any lender you wish for a private educational loan. For a list of private (alternative) education loan lenders and how to contact them, visit studentlendinganalytics.com or finaid.org/privateloans.
All private loan lenders are required to provide to student borrowers three disclosure statements and a Self-Certification Form prior to the school being able to certify the loan. The student will be required to complete and return the Self-Certification Form to the lender.
Other types of disclosures the student will receive include:
- Application Disclosure
- Loan Approval Disclosure
- Final Disclosure (prior to disbursement)
If you plan to apply for a private loan, you will need to be timely and proactive in acknowledging and providing any information requested. Delays in acknowledgement of the above disclosures or in completion of the Self-Certification Form will delay disbursements.
Costs of Attendance for Private Loan Self-Certification
The Cost of Attendance (COA) is the fall and spring total of tuition, fees, room, meals, books, personal, and transportation costs the University has built into your overall budget and is the maximum total financial aid you may have for this year. Various COA budgets for UE students can be found online.
All private lenders must require students applying for a private loan to complete a Self-Certification Form indicating the amount of the UE COA, the student's financial aid, and the difference between the two.
Questions about the Cost of Attendance can be answered by contacting the Office of Financial Aid.