Unlike grants and scholarships, loans accrue interest and must be repaid either while attending school, after graduation, or if you withdraw. Different types of student loans include federal, state, institutional, and alternative (bank) loans. Each type may have different terms and conditions associated when borrowing money for educational purposes.
Federal Direct Student Loans
Federal Direct Student Loans are available through the William D. Ford Federal Direct Student Loan Program. All students who complete the FAFSA and are eligible to receive Federal Student Aid may receive the Federal Direct Student Loans. This loan may be Subsidized or Unsubsidized. Student eligibility is determined by cost of attendance and FAFSA results. Students must enroll at least half time (6 hours for undergraduate students or 4 hours for graduate students) to receive Federal Student Loans.
The Federal Direct Loan Program
The William D. Ford Federal Direct Loan Program (also called FLDP, FDSLP, and Direct Loan Program) provides “low-interest loans for students and parents to help pay for the cost of a student’s education after high school. The lender is the U.S. Department of Education … rather than a bank or other financial institution.”
Direct Loan Advantages
With Direct Loans, you:
Borrow directly from the federal government and have a single contact-the Direct Loan Servicing Center—for everything related to the repayment of your loans, even if you receive Direct Loans at different schools.
- Have online access to your Direct Loan account information 24 hours a day, 7 days a week at Direct Loans on the Web at www.nslds.ed.gov.
- Can choose from several repayment plans that are designed to meet the needs of almost any borrower, and you can switch repayment plans if your needs change.
Federal Direct Parent Loan for Undergraduate Students
Federal Direct PLUS Loans: Loans that parents can borrow for students to use to meet their cost of education. Eligibility for PLUS Loans are limited to cost of attendance minus other financial aid. Applicants must complete a Parent PLUS Loan Information Sheet. PLUS loan applicants are submitted for credit review. Applicants with adverse credit history will be denied. These applications are available in the Financial Aid Office or can be submitted online, for more information to apply on-line.
Types of Federal Student Loans
Are for students with demonstrated financial need, as determined by federal regulations. No interest is charged while a student is in school at least half-time (6 credit hours), during the grace period and during deferment periods. The student must submit their acceptance of the loan offered via their award letter or by signing a Direct Loan Request Form.
Are not based on financial need; interest is charged during all periods, even during the time a student is in school and during grace and deferment periods. The student must be enrolled at least part time (6 credit hours) and submit their acceptance of the loan offered via their award letter or by signing a Direct Loan Request Form.
Are unsubsidized loans for the parents of dependent students and for graduate/professional students. PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest is charged during all periods.
How to Apply
To apply for a Federal Direct Loan, you must complete the FAFSA. To be eligible, you must be enrolled at least half-time (6 credit hours) and meet other general federal student aid eligibility requirements. If you qualify for a Federal Direct Loan, it will be included in your Financial Aid Award Letter. The application process also includes completing Entrance Counseling and signing the Federal Direct Loan Master Promissory Note
Federal Direct Loan Entrance Counseling
The federal government requires a student to participate in loan counseling prior to receiving a Federal Direct Loan. Entrance Counseling will explain various aspects of student loans, such as repayment and interest, and your rights and responsibility. It concludes with a quiz requiring you to get all answers correct to successfully complete Entrance Counseling.
Entrance Counseling can be completed at www.studentloans.gov You will need your U.S. Department of Education FSA Id to successfully complete Entrance Counseling. After you complete Entrance Counseling, the results will be sent electronically to the University of Rio Grande/Rio Grande Community College, although you may wish to print a copy of the rights and responsibilities page for personal records.
E-sign the Federal Direct Loan Master Promissory Note (MPN)
Students borrowing a Federal Direct Loan must complete a Federal Direct Loan Electronic Master Promissory Note (MPN) before loan money can be disbursed. Once a Federal Direct Loan MPN is completed and the loan is disbursed to you by the University of Rio Grande/Rio Grande Community College, you do not have to sign the Federal Loan MPN again (it is valid for 10 years).
To complete the MPN, you must go to www.studentloans.gov You will need your FSA Id to sign your MPN electronically. After you sign your MPN, electronic notification will be sent to URG/RGCC. We will not disburse your Federal Direct Loan unless you have completed your MPN and you have completed Entrance Counseling.
Receiving Federal Direct Loan Funds
When the University of Rio Grande/Rio Grande Community College is notified by the Federal Direct Loan Processor that they have a valid MPN on file for you and you have completed Entrance Counseling, your Federal Direct Loan will automatically be credited to your student account as long as all other federal student aid eligibility requirements are met.
Request Reduction or Cancellation of Federal Direct Loans
You have the right to cancel all or part of my federal loan disbursement for each semester. You may do so by completing a Federal Direct Loan Cancellation/Reduction Form and submitting it to the Financial Aid Office. Or, you may send an email, including your full name and student I.D. number, to the Financial Aid Office at email@example.com. The email/form must be submitted to the Financial Aid Office within 14 days from the date you receive official notification that loan funds have been credited to your student account, or before the first day of classes, whichever occurs last.
Federal Direct Loan Limits
The federal government sets limits on the amount of money a student can borrow the University of Rio Grande/Rio Grande Community College awards students that have filed the FAFSA the maximum amount eligible under such limits. The annual limit applies to the most a student can borrow in one academic year, while the aggregate limit applies to the maximum a student can borrow in a lifetime. Independent students and dependent students whose parents are unable to borrow a PLUS loan are eligible for additional Federal Direct Unsubsidized Loan.
Below is the annual aggregated loan limits for Federal Direct Loans:
Federal Direct Loan Annual Limits
Junior& Senior $7,500
Junior & Senior $12,500
Graduate Students $20,500
Federal Direct Loan Life Time Limit
Undergraduate Dependent $31, 500
Undergraduate Independent $57,500
Federal Direct Loan interest rates:
The government pays the interest on Subsidized Student Loans while the student is in school at least half time. However, interest is charged on Unsubsidized Student Loans from the time the loans is disbursed until it is repaid. Graduate students are not eligible for subsidized loan funds.
Interest Rates for 2016-2017
- Undergraduate Subsidized: 3.76% Fixed
- Undergraduate Unsubsidized: 3.76% Fixed
- Graduate Unsubsidized: 5.31% Fixed
- Parent PLUS: 6.31%
Interest Rates for 2015-2016
- Undergraduate Subsidized: 4.29% Fixed
- Undergraduate Unsubsidized: 4.29% Fixed
- Graduate Unsubsidized: 5.84% Fixed
- Parent PLUS: 6.84%
The U.S. Department of Education charges a loan origination fee for processing your loan
- Prior to October 1, 2014: 1.072%
- After October 1, 2014: 1.073%
Federal Direct Loan Exit Counseling
The federal government requires that students participate in Exit counseling prior to leaving or graduating from college, or if you become enrolled for less than half time (6 hours). To complete Exit Counseling, go to www.studentloans.gov You will need your FSA Id to successfully complete Exit Counseling.
During Exit Counseling you will learn about additional deferment and forbearance and how to get the necessary forms. Even though you have a six month grace period, the Exit Counseling process will help you set up a repayment plan, a direct withdrawal and a payment date. The Direct Loan Servicing Center, who handles all Federal Direct Loan repayments, hosts Exit Counseling.
Federal Direct Loan Repayment
Repayment of Federal Student Loans begins six months after graduation, withdrawal, or less-than-half-time enrollment. Students may be allowed up to thirty years for repayment in certain circumstances; however, repayment is usually based upon a ten-year plan.
For repayment options and consolidation information click here.
Federal Perkins Loan
The Federal Perkins Loan is a low-interest federal student loan for undergraduate and graduate student with exceptional financial need. The school is the lender and payments towards the Federal Perkins Loan will be made to the University of Rio Grande. Funds are dependent on the student’s financial need and the availability of funds in the Federal Perkins Program at the University of Rio Grande. Priority is awarded to student’s with the most need according to the Federal Application for Student Financial Aid (FAFSA).
Nurse Education Assistance Loan Program (NEALP)
The Nurse Education Assistance Loan Program (NEALP) was created by the Ohio General Assembly in 1990. The purpose of NEALP is to assist the state in meeting nursing shortages by providing financial assistance to Ohio students enrolled for at least half-time study (or accepted for enrollment) in approved Ohio pre-licensure nurse education program who intend to serve as nurses after graduation. NEALP provides up to $3,000 per year. In exchange, to qualify for loan cancellation, recipients must be employed full-time as a registered nurse or licensed practical nurse in the State of Ohio for a minimum of five years after graduation.
Applicants will be awarded NEALP funding based on information received from the applicant’s institution, FAFSA data, and information from the NEALP application. Applicants are ranked based on FAFSA data; those that demonstrate the highest level of need are awarded first. Awarding continues from the next neediest student until funds are depleted for the year. If sufficient funds are available, as determined by the Ohio Board of Regents, loan assistance will be awarded to all eligible applicants.
- Be an Ohio resident.
- Be a U.S. citizen or a permanent resident.
- Be enrolled in or be accepted for enrollment approved nurse education programs in Ohio colleges, universities, hospitals, or vocational schools.
- Not be in default or owe a refund to any Federal Financial Aid program.
- Maintain an academic record which places the student in good academic standings within the institution.
Is there a deadline?
Students may apply after January 1 and before July 15th of each year. Notification of acceptance or denial for NEALP funding will be sent by the first week in September.
Alternative Student Loans
In some cases, students need additional money to cover the costs of education after all federal, state, and institutional aid have been exhausted. For these students there are several alternative student loan options available. These loans are not guaranteed loans and often require a co-signer, and may require school certification. Interest starts accruing on alternative loans upon the first disbursement. Repayment starts either 6 months after graduation, or on the date the student leaves the institution.
Alternative or private student loans can be a suitable option for students seeking other means outside of Federal Student Aid in which to pay for their cost of education. It is the student’s sole responsibility to apply for and follow the appropriate steps in order to secure funding through an alternative loan. Alternative loans are credit based and may require that a student be enrolled at least half time (6 credit hours). Before the student applies for a private student loan, the student should exhaust all federal loan options first. Federal student loans are typically less credit restricted and offer flexible payment options.
In accordance with 34 CFR 668.14(b)(29)(ii), an institution must, upon the request of the applicant, discuss the availability of Federal, State, and institutional financial aid. Staff members in Rio Grande’s Office of Financial Aid are happy to discuss with students and prospective students, and their parents, the financial aid options available to them. Students and parents may qualify for loans or other assistance under Title IV of the Higher Education Act programs. The terms and conditions of Federal loan programs may be more favorable than the provisions of private educational loans.
How to Apply for a Private Student Loan
Step 1: Compare Lenders and Apply
Students should carefully review the borrower benefits and interest rates of several private loan companies before choosing the right lender. Many lenders encourage students to apply online through their websites, but borrowers can also apply over the phone and by paper forms. Great Lakes provides a private loan comparison tool at FastWeb, which allows the student to view the different benefits each lender offers.
Step 2: Applicant Self-certification
The Higher Education Opportunity Act of 2008 (Pub. L. 110-35) (HEOA) added section 128(e)(3) to the TILA, which states that before disbursement of any private education loan can occur, the Private Education Loan Applicant Self-Certification form must be completed and submitted to your lender, not financial aid. Many lenders provide this form during the loan application process. If you did not complete this form during the application process, please download it now and submit it to your lender.
In order to complete Section 2 of the Self-Certification, you will need to fill in the Cost of Attendance (COA) and Estimated Financial Assistance. To obtain the COA the student can contact the financial aid office at 1.740.245.7218 or 1.800.282.7201.
Step 3: View Loan Disclosures with Loan Cost Examples from the lender you have chosen
Rio Grande participates in the FastChoice option for students interested in Alternative Student Loans. This option offers a comparison of private loan options that we are most familiar with, and that are most commonly used by Rio Grande students. The list of preferred lenders is checked regularly to ensure these lenders are reputable and continue to meet the needs of Rio Grande students. Although this option is very useful for students and their families, it is important to understand that families are not restricted to only choosing a lender provided on the preferred lenders list. To visit our FASTChoice site click here.
How the University of Rio Grande Chooses Preferred Lenders
The Private Education Lender List is reviewed annually. Selection criteria are based on the following:
- Competitive interest rates
- Competitive front end and back end benefits
- Efficiencies in processing loan transactions
- School must be able to certify loan through the lenders certifying system
- At least three lenders must be unaffiliated with other preferred lenders at The University of Rio Grande
Code of Conduct
The Private Education Lender List is reviewed annually. Selection criteria are based on the following:
• The University of Rio Grande will protect the borrower’s choice of lender by:
o Making it clear to borrowers that they have the right to select any lender
o Processing and certifying loans timely, regardless of the lender selected
• University of Rio Grande reserves the right to add or remove any lending agency from the Preferred Lender List at any time.
• All employees are held to the highest ethical principles, as defined by our code of ethics.
Student Loan Code of Ethics
The University of Rio Grande and Rio Grande Community College has established a student loan code of conduct that sets clear limits on the interactions that URG/RGCC and its employees may have with student loan lenders, servicer and/or guarantors and to ensure that school employees maintain the highest standards of administrative and academic integrity, and conduct themselves in an ethical and professional manner in their interactions with students and families.
Further, University of Rio Grande and Rio Grande Community College has set forth this policy to codify and clarify our ethics standard with regard to education (student) loan lenders, servicers, and or guarantors, and to provide assurances that questionable practices that have been criticized at other educational institutions do not occur at URG/RGCC. Code of Ethics Policy:
• “Preferred” lender lists and endorsements of lenders: the University of Rio Grande and RioGrande Community College does not create, maintain, or distribute any listing of “preferred” or “recommended” education loan lenders/servicers, nor will URG/RGCC staff endorse any particular education loan lender/servicer.
• Promotion of Education Loans: University of Rio Grande and Rio Grande Community College does not engage in a “revenue sharing” arrangement with any student loan lender, servicer or guarantor, nor enter into any arrangement designed to promote the products, services, and/or public image of any student loan lender, servicer, or guarantor. This section does not prohibit the school from distributing informational materials in compliance with federal regulation 34 C.F.R. 682.200(b)(5)(ii).
• Non-Discrimination in Loan Certification: The Financial Aid Office will certify any private loan upon request for any eligible student through any participating lender, servicer or guarantor. Financial Aid staff will neither favor nor discriminate against any particular student loan lender, servicer, or provider in giving counsel to student and parent borrowers. However, nothing in this policy shall be construed to prevent properly trained Financial Aid Office personnel from giving students and parents good counsel and frank answers about loan costs, interest rates, fees, and payments to assist the borrower in making an educated loan product/lender choice.
• Prohibition Against Gifts: Neither URG/RGCC nor any of its employees will accept any gift, gratuity, favor, discount, entertainment, hospitality, benefit, or any other item of more than a nominal value from any student loan lender, servicer or guarantor, except as specifically permitted in federal regulation 34 C.F.R. 682.200(b)(5)(ii). Gifts to family members of URG/RGCC employees are considered as a gift to the employee if the gift was given in relation to the position of the employee. Nothing in this section shall be construed as prohibiting URG/RGCC employees from conducting normal banking business with a student loan lender; or receiving discounts, premiums, or gifts that are available to the general public based upon that normal banking business.
• Contracting Arrangements/Advisory Groups: Financial aid employees or any other URG/RGCC staff member that may have any responsibility with respect to educational loans may not accept from any student loan lender, servicer or guarantor any type of fee, payment, or other financial benefit as compensation for consulting or other services provided on behalf of the lender relating to educational loans; nor shall any employee accept payment for services or reimbursement of expenses related to education lending advisory boards, focus groups, facility tours or similar activities from any student loan lender, servicer, or guarantor.
• Staffing Assistance: University of Rio Grande and Rio Grande Community College does not utilize student loan lender, servicer, or guarantor staff to work in our offices, nor will we allow them to perform the work of school personnel in other locations. Further, we do not permit any non-employee to identify him/herself as a URG/RGCC employee.
Loan and Financial Education
Who is your Loan Servicer?
The U.S. Department of Education uses several loan servicers to handle the billing and other services on loans for the William D. Ford Federal Direct Loan Program. You may view your loan service provider through the National Student Loan Data System (NSLDS). The NSLDS website provides a centralized, integrated view of Title IV loans and grants so that recipients of Title IV Aid can access and inquire about their Title IV loans and/or grant data.
Carefully consider whether loan consolidation is the best option for you. Loan consolidation can greatly simplify loan repayment by centralizing your loans to one bill and can lower monthly payments by giving you up to 30 years to repay your loans. You might also have access to alternative repayment plans you would not have had before, and you’ll be able to switch your variable interest rate loans to a fixed interest rate.
Once your loans are combined into a Direct Consolidation Loan, they cannot be removed. The loans that were consolidated are paid off and no longer exist. For additional information on loan consolidation please visit: Federal Student Aid/Loan Consolidation
You need to make payments to your loan servicer. Each servicer has its own payment process, so check with your servicer if you aren’t sure how or when to make a payment. You are responsible for staying in touch with your servicer and making your payments, even if you do not receive a bill. For more information on loan payments please visit: Federal Student Aid/Loan Payments. For additional information about payment plans and Repayment Calculator visit: Federal Student Aid/Repayment Estimator
Deferment and Forbearance
- Deferment: is a period during which repayment of the principal and interest of your loan is temporarily delayed.
- Forbearance: you may be able to stop making payments or reduce your monthly payment for up to 12 months. Interest will continue to accrue on your subsidized and unsubsidized loans.
NEVER ignore delinquency or default notices from your loan servicer. If you don’t make your monthly loan payments, you will become delinquent on your student loan and risk going into default. Contact your servicer immediately if you are having trouble making payments or won’t be able to pay on time.Find out what may happen if you default, what steps you can take to keep your loan from going into default, and what your options are for getting out of default. at: Federal Student Aid