A loan is a type of financial aid that is available to students and/or parents to assist in covering educational expenses that are not covered by grants and/or scholarships. There are two types of student loans: federal and private.
Types of Federal Loans
The interest rate for the Direct Subsidized and Unsubsidized Loan first disbursed on or after July 1, 2023, and before July 1, 2024, is 5.50%. Loans where the first disbursement is made on or after October 1, 2020, and before October 1, 2024, will have a fee of 1.057%.
- Federal Direct Subsidized Loan- awarded to students with financial need. The U.S. Department of Education pays the interest on the loan while you are in school.
- Federal Direct Unsubsidized Loan- Interest accumulates while students are in school. It is also a non-need-based loan.
- Parent PLUS Loan – Your parents may qualify for a Federal Direct Parent PLUS Loan to help you pay for college. This type of loan enables your parent to borrow up to an amount equal to your total cost of attendance at Thaddeus Stevens College minus any other financial aid you receive.
- Interest Rates for Direct PLUS Loans First disbursed on or after July 1, 2023, and before July 1, 2024, is 8.05%.
- Loans where the first disbursement is made on or after October 1, 2020, and before October 1, 2024, will have a fee of 4.228%.
- Alternative Loans - If you require additional funds after all Federal-aid and institutional aid has been awarded, you may apply for an alternative student loan. These loans typically require a cosigner and are from a private lending institution.
- Variable or fixed interest rates
- Variable fees
- Several programs are available for your consideration. Loan terms vary, so you will want to be a conscientious consumer and review multiple loans options.
Applying for Loans/Maintaining Eligibility
Federal Direct Loan (student is the borrower)
- Complete the FAFSA.
- Complete the Entrance Counseling and Master Promissory Note (MPN) online at studentaid.gov.
- Meet Satisfactory Academic Progress.
Financial Need will determine what amount a student is eligible for in Subsidized or Unsubsidized funds. If a student is an independent or a dependent student whose parent has been denied for a Parent PLUS Loan, the student is eligible to receive an additional $4,000 in the Federal Direct Unsubsidized Loan. If the student receives other financial aid, the loan amount may be less.
Important Things to Know About the Federal Direct Loan
- You may cancel all or a portion of the loan within 14 days of the date the school notifies you that the loan funds have been credited to your account.
- The loan funds are disbursed via EFT transfer to students' accounts each semester, starting after the designated census date. After the initial disbursement, funds are reviewed for disbursement as needed.
- YOU are the borrower.
- The loan MUST BE REPAID to the U.S. Department of Education (USDE).
- You cannot receive a Federal Direct Loan worth more than the cost of attendance.
- Repayment begins six months after you graduate or are no longer enrolled in courses worth at least six credits.
- You can only receive the loan for 150% of your program length of study.
- Fees for loans with a first disbursement on or after October 1, 2020 and before October 1, 2024 are 1.057%.
- For the 2023-2024 academic year, the interest rate for subsidized and unsubsidized loans is 5.50%.
- Loan repayment schedule and MPN terms and conditions can be found on studentaid.gov.
- Upon disbursement, your loan information will be shared with the National Student Loan Data System (NSLDS). It will be accessible by authorized agencies, lenders, and institutions. The loan servicer assigned to your loan will be available by logging into the Federal Student Aid website, and viewing the information under “My Loan Servicers” section.
- Upon separation from the College, student loan borrowers are required to complete Exit
irect PLUS Loan
(parent is the borrower)
We request that you do not apply for a PLUS loan until May 1 for the upcoming academic year. This ensures the credit check does not expire.
- Apply online at studentaid.gov.
- Under "Apply For Aid" select "Apply for a Parent PLUS Loan."
- Sign in using the parent's FSA User ID.
- Complete a four-step application process, allowing the Department of Education to check their credit and approve them for the loan.
- Click on Complete Master Promissory Note(MPN
) ,select PLUS MPN for Parents, and follow the instructions provided.
- Complete the PLUS Loan Form.
Studentmust be meeting Satisfactory Academic Progress.
Important Things to Know About the Federal Direct PLUS Loan
- FAFSA must be completed.
Studentmust be enrolled in at least 6 credits per semester.
- A parent must pass a credit check. If the parent is denied,
studentmay be eligible to receive an additional $4,000 per academic year in the Federal Direct Unsubsidized Loan.
- Payments may be deferred while
studentis enrolled in school.
- Interest occurs from the date the loan is disbursed.
- Funds are disbursed via EFT to students accounts each semester starting after the designated census date. After the initial disbursement, funds are reviewed for disbursement as needed.
- Fees for loans with a first disbursement on or after October 1, 2020 and before October 1, 2024 will have fees of 4.228% deducted from the total loan amount at the time of disbursement.
- For the 2023-2024 academic year the loan has a fixed interest rate of 8.05%.
- Upon disbursement your loan information will be shared with the National Student Loan Data System (NSLDS). It will be accessible by authorized agencies, lenders, and institutions. The loan servicer assigned to your loan will be available by logging into the Federal Student Aid website, and viewing the information under "My Loan Servicers" section.
Some Benefits of Borrowing Federal Direct Loans
- No required payments while in school.
- 6 month grace period before payments are required.
- Deferment and forbearance options to assist in
Before you consider an alternative loan, make sure you have determined your eligibility for Federal Direct Loans and Federal Direct PLUS Loans. Then, consider other options for financing your education.
You are free to choose any lender you wish. Loan terms vary, so you will want to be a conscientious consumer. Compare a historical list of lenders that other students have used over the past four years.
Note: The Office of Financial Aid provides borrowers with a list of historical lenders. These lenders have established themselves as quality institutions based
Preparing for Repayment
It is important for students to understand that when borrowing loans that money must be repaid at a later time. If you have graduated, withdrawn or been dismissed from Thaddeus Stevens, you are required to complete a Federal Direct Loan Exit Counseling.
After Completing the Exit Counseling you should also review the following information on the Federal Student Aid website.
- Total amount borrowed in loans.
- Detailed examples of Repayment options and schedules that may best meet your needs.
- Loan Consolidation Options.
- Loan Servicer Contact information. The loan servicer is the company that handles the billing and other services on your Federal student loan(s). The contact information will be listed under the "My Loan Servicers" section of the dashboard.
Repaying Your Loans
If you find you are having trouble making your monthly loan payments reach out to your servicer. They can help you to determine if you qualify for deferment or forbearance of your payments, or offer alternative repayment options to meet your needs.
Although some of the deferments and forbearances allow you to place your loans on hold for a few months at a time, they should be used in moderation. There is a time limit to each deferment and forbearance, and once the maximum time has been spent, you will no longer be eligible for them again.
Difficulty making payments can lead to your account becoming delinquent (past due), and further continuation of delinquency can lead to default of your loan.
- Delinquency: When your account is delinquent, on your student loan payment for 90 days or more, your loan servicer will report the delinquency to the three major national credit bureaus. You will receive phone calls and letters from your servicer to notify you of the missed payment. If the payment or other arrangements are not made, this can lead to credit reporting and possible outsourcing of your loan to an outside collection agency.
- Default: Occurs if you fail to make payments according to the terms of your Master Promissory Note, and your loan reaches 270 days of delinquency. If your loan were to default, you will run the risk of having the account balance due in full, could be sued, ineligible to receive future student loans if you return to school, income tax seizure, payments being taken from your paycheck, and I9 credit reporting.
Additional information on ways to avoid delinquency and default can be found on the Federal Student Aid website.
The best way to avoid default is to M.A.N.A.G.E your loans:
- M - Monitor your debt
- A - Avoid the overuse of credit cards and excess loan borrowing.
- N - Need to organize a loan file.
- A - Acquaint yourself with your loan servicer.
- G – Gain understanding of your loan terms and conditions of repayment.
- E - Establish a monthly budget to ensure payments are made timely.