|
Financial Aid: Loan Information
Perkins Loan
This federal loan is offered to students at an interest rate of five
percent. Repayment begins nine months after graduation, upon termination
of an academic program, or after enrolling for fewer than six credits
during a semester.
Perkins Loan E-signature
Your Perkins promissory note can be electronically signed at:
http://www.acs-education.com/bac/perkinsesign/home.html
Perkins Entrance Counseling
Your Perkins entrance counseling can be completed at:
http://www.mapping-your-future.org
Check the status of your Perkins Loan account
https://www.acs-education.com/CS/Jsp/general/home.jsp
Perkins Exit Counseling
Please access the link below to complete your Perkins Loan exit
counseling:
https://www.fc.campusoncall.com/cgi-bin/welcome.pl?campus=setonhall
Stafford Loans
Subsidized Stafford loans eligibility for this loan is based on need.
This long-term student loan is available from the federal government. No
interest is charged to the student nor is repayment required while the
borrower is enrolled at least half-time. The interest rate is variable.
Unsubsidized loans are available to students who do not qualify for a
Federal Subsidized Stafford Student Loan or qualify for only a partial
Federal Subsidized Stafford Student Loan. Under this program the
borrower is responsible for the interest which accrues while the student
is in school. The student may choose to make monthly payments while
enrolled or defer all payments until six months after leaving school.
Forms, interest rates, and annual limits are the same as those in the
Federal Stafford Student Loan Program.
Helpful Links
Parent PLUS Loan
This loan programs allows parents of dependent students to borrow up to
the cost of attendance. These loans are available from lenders
regardless of family income. The amount borrowed may not exceed the
student's cost of education minus any financial aid. Repayment of the
PLUS loan begins within 60 days after disbursement of the loan. The
interest rate is a variable simple interest rate for first-time
borrowers never to exceed 9 percent. The interest rate is determined by
the U.S. Department of Education. If the parent is turned down for the
PLUS loan the student may be eligible for an additional unsubsidized
loan.
Graduate PLUS Loan
Graduate and professional degree students are now eligible to borrow
under the PLUS Loan Program up to their cost of attendance minus other
estimated financial assistance in the FFELP Loan Program. The terms and
conditions applicable to Parent PLUS Loans also apply to
Graduate/Professional PLUS loans. These requirements include a
determination that the applicant does not have an adverse credit
history, repayment beginning on the date of the last disbursement of the
loan, and a fixed interest rate of 8.5 percent in the FFEL program.
Applicants for these loans are required to complete the Free Application
for Federal Student Aid (FAFSA). They also must have applied for their
annual loan maximum eligibility under the Federal Subsidized and
Unsubsidized Stafford Loan Program before applying for a
Graduate/Professional PLUS loan.
Private/Alternative Loans
Private Education Loans, also known as Alternative Education Loans, help
bridge the gap between the actual cost of your education and the limited
amount the government allows you to borrow in its programs. Private
loans are offered by private lenders and there are no federal forms to
complete. Eligibility for private student loans often depends on your
credit score.
Some families turn to private education loans when the federal loans
don't provide enough money or when they need more flexible repayment
options. For example, a parent might want to defer repayment until the
student graduates, an option that is not available from the government
parent loan program. (Many PLUS loan providers are starting to allow
parents to defer payments on the PLUS loan while the student is in
school using an administrative forbearance. Interest continues to
accrue, however.)
Private education loans tend to cost more than the education loans
offered by the federal government, but are less expensive than credit
card debt. The federal education loans offer fixed interest rates that
are lower than the variable rates offered by most private student loans.
Federal education loans also offer better repayment and forgiveness
options. Since federal education loans are less expensive than and offer
better terms than private student loans, you should exhaust your
eligibility for federal student loans before resorting to private
student loans.
Private student loans typically have variable interest rates, with the
interest rate pegged to an index, such as LIBOR or PRIME, plus a margin.
The LIBOR index is the London Interbank Offered Rate and represents what
it costs a lender to borrow money. The Prime Lending Rate is the
interest rate lenders offer to their most creditworthy customers. A rate
of LIBOR + 2.8% is roughly the same as PRIME + 0.0%. The spread between
LIBOR and PRIME has been growing over time. So all else being equal, it
is better to have an interest rate pegged to the LIBOR index, as such a
rate will increase more slowly than a rate pegged to the PRIME index.
The interest rates and fees you pay on a private student loan are based
on your credit score and the credit score of your cosigner, if any.
Generally, if your credit score is less than 650 (FICO), you are
unlikely to be approved for a private student loan. An increase of just
30 to 50 points in your credit score is often enough to get you better
terms on your loan.
It is better to apply for a private student loan with a cosigner even if
you could qualify for the loan on your own. Just applying with a
cosigner usually results in a slightly lower rate, as such loans are not
as risky for the lender. Moreover, the interest rates and fees are
usually based on the higher of the two credit scores. So if your
cosigner has a much better credit score than you, it could result in a
much lower interest rate.
Private student loans may be used to pay for the EFC, the family's
portion of college costs. While some lenders may offer private student
loans in excess of the cost of attendance, any amount exceeding the
difference between cost of attendance and financial aid is considered a
resource. Like an outside scholarship, this will reduce need-based aid.
(Some lenders offer non-school-certified private student loans to bypass
this limitation by not informing the college about the loan. If the
college becomes aware of the loan, federal regulations require the
college to reduce need-based aid. Pending federal legislation would
require lenders to tell colleges about all private student loans,
eliminating this loophole.) This cost-of-attendance limitation only
applies to education loans, which are loans that make enrollment in
college a condition of the loan. It does not matter where the loan
proceeds are sent (e.g., direct to the borrower vs to the school) or how
the loans are marketed. On the other hand, mixed-use loans, such as home
equity loans and credit cards, are not considered education loans and as
such are not limited by cost-of-attendance.
Lenders provide different types of private education loans depending on
the student's level of study.
Parents who are considering an alternative education loan often also
consider a home equity loan or a PLUS loan. There are several tradeoffs:
http://www.finaid.org/loans/loantradeoffs.phtml
|
