Understanding Loans at Geneva CollegeThere are many different loan options available to help fund a college education, both for undergraduate and graduate students. Understanding the loans and the loan process will hopefully help in deciding which, if any, loan program might be best to suit your individual needs. Perkins and Stafford loans are applied for each year through the FAFSA at www.fafsa.ed.gov. PLUS loans and alternative loans do not need a FAFSA application but do require a separate application.
The Perkins loan is a need based loan, determined by the information provided within a completed FAFSA and by the school. It has a fixed interest rate of 5%, which is the lowest of all educational loans. The interest is subsidized, meaning that the government is paying the interest while the student is attending at least half time. At Geneva, we offer the Perkins loan to undergraduate freshman and sophomores only. The amount of loan each year can vary somewhere between $500 and $1500. No payment is due until 9 months after the student ceases to be enrolled for at least half time, which is typically 6 credits or more per term. It is a finite fund so when funds are depleted, there is no more to offer. For this reason it is wise to file your FAFSA as early as possible. Our recommended filing date is prior to March 15. In order for the loan to disburse to the student’s account, a loan entrance interview needs to be completed and a promissory note needs to be signed. This process only needs to be completed one time. You may complete these forms electronically by following the links on the Perkins Loan page.
Steps to get a Perkins Loan:
The Stafford loan can be subsidized or unsubsidized or a combination of both, depending on demonstrated need through the FAFSA. Subsidized means the government is paying the interest owed to the bank on the student’s behalf while the student is still in school attending at least half time. Unsubsidized means that interest is accruing and can either be paid by the borrower or capitalized (added on top of loan amount) and paid later. Students will be offered subsidized loan, whenever eligible, first. The interest rate for all Stafford loans is 6.8%. Stafford loan amounts are the same for all schools, depending on year in school. For the 2007-08 school year, freshman are eligible for up to $3,500 per year. Sophomores are eligible for $4,500 per year. Juniors and seniors can get up to $5500 per year. A student who is determined by the FAFSA to be independent may be offered an additional $4000 unsubsidized loan for freshman and sophomores and an additional $5000 unsubsidized for juniors and seniors. Graduate students can receive up to $20,500 ($8500 subsidized maximum) per academic year, depending on cost of attendance. Like the Perkins loan, in order for the loan to disburse to the student’s account, a loan entrance interview needs to be completed and a promissory note needs to be signed. These forms are available on the Financial Aid Forms page on our Web site. This process only needs to be completed one time.
Steps to get a Stafford Loan:
PLUS loans are loans in the parent’s name. The interest rate for PLUS loans for all loans disbursed after July 1, 2006 will be 8.5%. It is a credit based loan and therefore needs to be applied for separately. You can view all of Geneva’s preferred lenders at www.elmselect.com and then you will be directed to a Web site for easy application. Or you can apply directly at www.aessuccess.org or by phone at 800-692-7392. If approved, parents can receive up to the cost of education minus any other aid each year. If the loan is denied, students will be offered additional unsubsidized Stafford loan, $4000 for freshmen and sophomores and $5000 for juniors and seniors. Typically, repayment begins 6 months after the second disbursement to the school but some lenders will allow deferment of payments for up to 4 years. If choosing this option, you will need to apply directly with the bank for this option only. There is a 3% fee charged. As of July 1, 2006, the PLUS loan will be available to graduate students as well.
Steps to get a PLUS loan:
Alternative Student loans are simply that. They are another alternative for students to help pay for their education. The loan is in the student’s name and the payments are deferred until 6-12 months, depending on the lender, after the student is no longer enrolled at least half time. These are private loans that need to be applied for directly with the bank. You can view all of Geneva’s preferred alternative loan lenders at www.elmselect.com. You will then be directed to the Web site of the bank of your choice. Alternative loans are credit based and most students will need a credit worthy co-borrower. The interest rate will vary depending on the credit worthiness of the borrower and co-borrower and some lenders will charge a fee. If approved, students can receive up to the cost of attendance minus other financial aid. Undergraduate and graduate students are eligible for alternative loans depending on the cost of attendance.
Steps to get an alternative loan:
|
|
||||||||||||||||||||||||||||||||||||||
 |
|  |
||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||
