A loan is financial assistance that enables students and parents to borrow money from the federal government, state government or private lenders. These loans must be repaid. Borrowers are responsible for signing a Master Promissory Note for each loan program, which is a binding, legal document through which the borrower agrees to repay the loan. To be considered for any federal loans, students must fill out the Free Application for Federal Student Aid (FAFSA).
Federal Direct Loans
A federal student loan, made through the William D. Ford Federal Direct Loan Program, for which eligible students and parents borrow directly from the U.S. Department of Education at participating schools. Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans and Direct Consolidation Loans are types of Direct Loans. This chart gives the annual limits of various Direct Loans:
|Loan Type||Freshman||Sophomore||Junior||Senior||Lifetime Limit|
|Subsidized Direct (Dependent)||$3,500||$4,500||$5,500||$5,500||$23,000|
|Unsubsidized Direct (Dependent)||$2,000||$2,000||$2,000||$2,000||$8,000|
|Subsidized Direct (Independent)||$3,500||$4,500||$5,500||$5,500||$23,000|
|Unsubsidized Direct (Independent)||$2,000||$2,000||$2,000||$2,000||$8,000|
Subsidized Direct loans are loans based on financial need for which the federal government pays the interest that accrues while the borrower is in an in-school, grace, or deferment status. Unsubsidized Direct loans are loans for which the borrower is fully responsible for paying the interest regardless of the loan status. Interest on unsubsidized loans accrues from the date of disbursement and continues throughout the life of the loan. Repayment for these two loans begins after graduation or when the student drops below part-time. The student has up to 10 years to repay these loans.
The current fixed interest rate for the federal direct subsidized and unsubsidized loans is 4.29% and the current loan fee is 1.068% – rates may change depending on legislation so please visit the Federal Student Aid Calculators and Interest website
Direct PLUS Loans (for parents or graduate students)
A loan made by the U.S. Department of Education to graduate or professional students and parents of dependent undergraduate students for which the borrower is fully responsible for paying the interest regardless of the loan status. PLUS stands for Parent Loans for Undergraduate Students. They are low-interest loans for credit-worthy parents of undergraduate students or graduate students.
To borrow a PLUS loan for a student, the parent must be the student’s biological or adoptive mother or father. A stepparent is also eligible to borrow a PLUS loan. A legal guardian is not considered a parent for federal student aid purposes. Grandparents are not eligible to borrow a Plus Loan for their grandchildren.
For Parent and Student:
- US Citizens or eligible Non-US Citizens
- Not in default on prior educational loans
- Borrows on behalf of the dependent student and is responsible for loan repayment
- Meets federally defined creditworthiness standards
- Enrolled in at least 6 credit hours for undergraduate student OR 3 credit hours for graduate students
- Meeting Satisfactory Academic Progress (SAP) requirements
Eligible Annual Loan Limits
You may not borrow more than the cost of the student’s education minus any other financial aid received (such as grants, scholarships, or loans – including Direct Subsidized/Unsubsidized loans). High Point University will determine the actual amount you may borrow.
- This loan is not need based.
- You must re-apply for the PLUS loan for each academic year after completing the FAFSA.
- Origination fee of 4.272%
- Current fixed interest rate of 6.84% – rates may change depending on legislation so please visit the Federal Student Aid Calculators and Interest website
- Interest begins to accumulate upon the first disbursement. Repayment begins 60 days after the final disbursement during the academic year in which the loan is disbursed, or you have the option of deferring the loan payments until your dependent student graduates, withdraws, or drops below half-time enrollment status. You will be responsible for repaying both the principle and accumulated interest. The maximum repayment period is generally 25 years.
How to Apply (you must re-apply for a PLUS loan for each academic year):
- Parents go to https://studentloans.gov and choose sign-in
- Parents sign in using your FSA ID (username & password) not your child’s
- Once signed in – Choose Request a Direct PLUS Loan
- Then choose Parent PLUS – you can now complete the application
- Once you have completed the application – return to the main page of https://studentloans.gov and choose Complete Master Promissory Note (MPN)
- Then choose Parent PLUS – you can now complete the MPN for your PLUS Loan
- If your PLUS Loan is endorsed by a co-signer, then you will be required to complete PLUS Counseling
Options if Denied Based on Credit:
The Direct Loan Origination Center will notify the parent borrower via U.S. Mail if the Federal Direct Parent PLUS loan credit check is denied. The Financial Planning Office does not provide notice if you credit check was denied. If the credit check is denied, there are three options:
1.Request a review of the credit check due to inaccurate information on the credit report by contactingthe Direct Loan Origination Center at 1-800-557-7394
2.You can obtain an endorser’s signature. Your endorser must also pass a credit check. Additionalinformation is available by contacting the Direct Loan Origination Center at 1-800-557-7394
3.Your child may be eligible to receive additional Federal Direct Unsubsidized Loan money as a result ofyour Plus Loan denial. Your child is not obligated to borrow these funds – additional amounts are listedbelow. If you would like more information about these additional funds, please contact our office.
Additional Unsubsidized Loan Amount
Freshman, Sophomore $4,000
Junior, Senior $5,000
For more information on these loans please visit the Federal Student Aid website or view this Direct Loan Basics document. Please Note: An origination fee will be charged on each loan that will be deducted from the loan before disbursement, for current rates visit the Federal Student Aid – Other Fees website. Also students who are non-degree seeking or who are seeking teacher certification after graduation are only eligible for alternative loans in most cases.
If your financial assistance package does not cover your expenses, you have the option of applying for an alternative or private (nonfederal) student loan. Some private lenders offer credit-based loan programs to creditworthy students and/or students with creditworthy cosigners. Interest rates, loan fees and other specifics of such loans should be carefully evaluated. Before pursuing private alternative loans, students and parents should ALWAYS pursue Federal loans first; if additional funding is needed, students should consider Federal PLUS Loans for Parents (see above) or the tuition payment plan before pursuing alternative loans.
If students decide to use private alternative loans, they must apply for these loans in enough time for them to use the funds to pay the High Point University charges by the due date. Private alternative loan lenders will require a creditworthy cosigner. This can be a parent, another adult relative, or other person who meets the lender’s requirements for the loan. A cosigner will be responsible for the loan if the student does not pay it back. Students who apply for a private alternative loan must complete a Self-Certification Form and submit it to the lender prior to loan approval.
The Office of Student Financial Planning will assist families in understanding and pursuing this lending avenue but cannot be responsible for the actual application. Below are several common private lending options utilized by High Point University students and families. Utilize the link provided to find out specific information and complete an on-line application if interested.
List of Private Alternative Loan Lenders used by HPU Students:
- Citizens Bank
- Discover Student Loans
- PNC Bank Student Loans
- SunTrust Private Student Loans
- Wells Fargo Student Loans
Because of the uncertainty of the current credit markets and the inability of certain lenders to secure private alternative loan funding, the pool of lenders willing and able to make private alternative loans is shrinking.
In order to consider a private alternative loan as payment toward the Student Accounts bill, the student must have received final approval from the lender. Processing time varies from lender to lender, but the average approval time is two to four weeks if everything is submitted in a timely manner. Be sure to allow enough time for processing.
Please refer to our Code of Conduct regarding Educational Loans
Click below to easily compare and apply for Alternative Loans: