Types of Loans

Undergraduate Loans

Alfred University recommends you explore the process of applying for all other types of aid before you pursue a loan.

The Federal Direct Loan (FDL) is a federal financial aid program under which loan funds are made available to students for educational expenses. FDL provides low-interest loans, available to undergraduate and graduate students who are matriculated in a degree program for at least six credits per semester and who are U.S. citizens or permanent residents.

The Federal Government provides a comprehensive explanation of all FDL provisions, terminology, and repayment on their Student Aid on the Web website. Click on the "Federal Student Aid Programs" button on the left hand side of the page for information on specific grants and loans. The following information summarizes the basic FDL terms and conditions.

General Direct Loan Provision

The FDL Program makes two types of loans available to students: a subsidized loan and an unsubsidized loan.

Subsidized Direct Loan eligibility is based on financial need as determined by the Federal Need Analysis Methodology. When a student qualifies for a subsidized loan, the federal government makes the interest payments on behalf of the student while the student is enrolled in school on at least a half-time basis and for six months afterwards (grace period). Students who do not qualify for any or a full subsidized loan are eligible for the unsubsidized Direct Loan. Under the unsubsidized FDL Program, the student is responsible for making the interest payments while enrolled in school. There are two options available regarding these interest payments. Students may make monthly interest payments while enrolled, or the student may agree to add the interest due to the principal of the loan (this is called capitalization) at repayment.

Direct loans have a 1% federal fee deducted at disbursement. The interest rate is a fixed rate, which is set by the federal government. The unsubsidized Direct Loan interest rate is currently 6.8% for both graduate and undergraduate students. The subsidized Direct Loan interest rate is 3.4% for undergraduates and 6.8% for graduate students.

Undergraduate Dependent Students may borrow up to the following annual FDL limits. Annual FDL limits are: $5,500 (only $3,500 may be subsidized) for first year students, $6,500 (only $4,500 may be subsidized) for sophomores, and $7,500 (only $5,500 may be subsidized) for juniors and seniors.

Independent undergraduate students or a dependent student whose parents are unable to obtain a Federal Direct PLUS Loan may borrow up to the following annual FDL limits: $9,500 for first year students (only $3,500 may be subsidized), $10,500 for sophomores (only $4,500 may be subsidized), and $12,500 for juniors and seniors (only $5,500 may be subsidized).

Graduate Students may borrow up to $20,500 each academic year (only $8,500 may be subsidized).

Students may not borrow more than the annual loan limit in any combination of subsidized or unsubsidized FDL. Also, a student's annual FDL may not exceed the approved federal cost of attendance minus any other types of financial aid.

Repayment

Generally, repayment of loan principal begins six months after the student ceases to be enrolled on at least a half-time basis. The standard repayment period may extend up to ten years depending on the total amount borrowed. The minimum monthly payment is $50. Several other repayment plans are available as well.

Application Procedures

To receive a FDL, students must annually file the Free Application for Federal Student Aid (FAFSA), complete Entrance Counseling, and complete a FDL Master Promissory Note (MPN). Although the FAFSA must be completed for each academic year, Entrance Counseling and the FDL MPN are one-time requirements to be completed prior to borrowing the first loan.

Entrance Counseling is a federal requirement for all FDL borrowers. This counseling will help students understand the terms and provisions of the FDL as well as their rights and responsibilities as a borrower. The FDL MPN is designed to serve as a multi-year note, over a maximum ten-year period, and can be used to process a student's FDL in subsequent years. Therefore, students will only need to complete Entrance Counseling and the FDL MPN once for enrollment at Alfred University.

Complete FDL Entrance Counseling and/or MPN

You will need your Federal Student Aid (FAFSA) PIN number to enter the website.

Please note: Both the entrance counseling and the FDL MPN must be completed before your loan can be certified. Alfred University will be notified electronically when you have completed entrance counseling.

The Federal Direct PLUS Loan is a federal educational loan program which provides low-interest loans, available to parents (Parent PLUS Loan) of dependent undergraduate students and to graduate students (Grad PLUS Loan). The Federal Direct PLUS Loan is not a need-based loan or based on a specific income level. However, borrowers must demonstrate a satisfactory credit rating to participate. The borrower and student must be U.S. citizens, permanent residents, or eligible noncitizens and the student must be attending at least half-time (six credits per semester) in a degree-granting program.

The Federal Government provides a comprehensive explanation of all Federal Direct PLUS Loan provisions, terminology, and repayment plans on their Student Aid on the Web website. Click on the "Federal Student Aid Programs" button on the left hand side of the page for information on specific grants and loans. The following information summarizes the basic Federal Direct PLUS Loan terms and conditions.

General Federal Direct PLUS Loan Provisions

PLUS borrowing is limited to the cost of education minus other financial aid resources. For the 2012-13 academic year, PLUS loans have a fixed interest rate of 7.9% which is set by the federal government. Repayment of principle and interest generally begins 60 days after full disbursement. The interest is not subsidized while the student is in school and will begin to accrue with the first disbursement. Federal regulations require 4% Federal fees be deducted from the loan at disbursement.

To participate, borrowers must demonstrate a satisfactory credit rating according to federal guidelines and credit standards. An applicant's credit standing is determined upon receipt of a PLUS Loan application. Applicants determined to have an adverse credit history, may receive a loan if the applicant obtains a credit worthy endorser or successfully appeals a credit decision.

Repayment

The PLUS Loan repayment period begins 60 days after full disbursement of the annual loan amount. For example, a loan made for the 2012-13 academic year would be “fully disbursed” with the spring semester 2013 loan payment in early January, making the first loan payment of principle and interest due in early March 2013.

The monthly payment and the repayment period will depend on the amount borrowed. The minimum monthly payment will be at least $50, and the repayment period may extend up to 10 years.

Grad PLUS Loan borrowers enrolled on at least a half-time basis (6 or more credit hours) may receive a deferment for repayment of principle and interest during enrollment, and for up to 6 months after leaving school.

Parent PLUS borrowers may defer principle and interest payments while the undergraduate student on whose behalf they borrowed is in school and for a six-month period after the student graduates or drops below half-time enrollment. Payments can also be deferred while the parents themselves are enrolled in college at least half-time in a degree-granting program.

PLUS Application Procedures

To receive a PLUS Loan, the Free Application for Federal Student Aid (FAFSA) must be filed annually for the student. The borrower must complete a PLUS Loan Master Promissory Note (PLUS MPN) and the borrower must annually request a loan, and demonstrate satisfactory credit.

Although the FAFSA and a loan request must be completed for each academic year, the PLUS MPN needs to be completed only once. The PLUS MPN is designed to serve as a multi-year note, over a maximum ten-year period, and can be used to process the borrower's PLUS Loan eligibility in subsequent years. Therefore, a borrower will need to complete the PLUS MPN only once during the student's enrollment at Alfred University.

Loan Counseling Required for Graduate Students: Entrance Counseling is a federal requirement for all Graduate PLUS borrowers. This counseling session will help graduate students understand the terms and provisions of the PLUS Loan and their rights and responsibilities as a borrower. PLUS Entrance Counseling only needs to be completed once, prior to receiving the first Grad PLUS Loan.

  1. File the FAFSA.
  2. Complete the PLUS Loan MPN and/or Request a PLUS Loan. You will need your Federal Student Aid (FAFSA) PIN number to enter the website.
  3. Complete the required Graduate Student PLUS Entrance Counseling. You will need your Federal Student Aid (FAFSA) PIN number to enter the website.

Please Note: Both the entrance counseling and the PLUS Loan MPN must be completed before your loan can be certified. Also, Alfred University will be notified electronically when you have completed entrance counseling.

Federal Perkins Loan
Source: Federal Government / Alfred University
Awarded by: Alfred University

Eligibility:
Undergraduate and graduate students with financial need who are carrying at least six credits per semester. Applicants must be U.S. citizens or permanent residents. Preference is given to full-time students.

Value:
Up to $4,000 annually for undergraduates and $6,000 for graduates. Repayment of loans plus 5 percent interest begins nine months after the student graduates, terminates attendance, or drops below six credit hours. The repayment period may extend up to 10 years, depending on the amount borrowed. The minimum monthly payment is $40. Cancellation and deferment provisions are available. Administered by the Office of Student Financial Aid, eligibility is based on financial need as determined by the Federal Need Analysis Methodology. At Alfred, annual awards range from $500 to $1,000, depending on the student's financial need.

How to Apply:
Complete the Free Application for Federal Student Aid

Alumni Loan Program
Source: Alfred University
Awarded by: Alfred University

Eligibility:
Undergraduate students enrolled full-time who are U.S. citizens or permanent residents may apply.

Value:
Eligibility is based on financial need as determined by the Office of Student Financial Aid. Annual awards generally range from $500 to $2,000. Repayment of the loan plus interest begins nine months after the student ceases to be enrolled as a half-time student. The interest rate is 5%. Minimum monthly payment is $50.

How to Apply:
Complete the FAFSA.

Private education loans are non-federal loans offered by private lending institutions. Some families use private education loans when additional resources are needed to meet educational costs not covered by family resources and other forms of financial aid. These loans are generally more expensive than the federal direct loan programs and should only be used when federal loan eligibility (Direct and PLUS loans) has been exhausted. The following terms and conditions are generally common to most private loan programs and are provided to help students and families understand private loans. Students and families should always consult with the lender for the terms and conditions specific to a loan program they are considering.

Please visit FASTChoice to start your search for a private education loan.

General Private Loan Provisions

Borrowers: The loan is in the student's name. However, for most loan programs, undergraduates will need a cosigner. Some loans have a cosigner release option after a certain number of on-time monthly payments, typically 24 to 48.

Eligibility Requirements: Applicant must be 18 years of age; a U.S. citizen or eligible non-citizen; enrolled at least half-time in a degree program; credit worthy or apply with a credit worthy cosigner.

Loan Amounts: The maximum amount students may borrow is the school's cost of attendance less other financial aid. Lenders usually have a minimum loan amount of $500 or $1,000.

Interest Rate: Private loans usually have variable interest rates which are based on an index such as LIBOR or PRIME plus an additional percentage depending on the applicant's and cosigner's credit score. For example, a loan program's interest rates may range from Prime plus 1% to Prime plus 5%. The highest credit score would receive Prime plus 1% and the lowest approved credit score would receive Prime plus 5%.

Repayment Terms: Payment periods typically range up to 15 or 20 years depending on the amount borrowed. Some loans allow a longer period. Repayment options generally include immediate repayment of principle and interest, interest-only payments during enrollment, or deferred principal and interest payments during enrollment.

Private Loan Options-Information

For most private loan programs, students must annually complete an application for each academic year. The loan application may be completed on-line at the lender's web site.

The first step is to choose a private loan which will meet the family’s and student’s needs. To assist families with researching lenders, Alfred University provides a list of lenders through the FASTChoice website. Please note, this list does not include all private loan lenders and students may look beyond this group. It is simply a listing of lenders which AU students and families have used over the past three years. Students may choose any private loan they wish and are not obligated to use a lender from this list. In addition, the FASTChoice website offers good consumer information including a comparison tool of lenders’ terms and conditions, helpful repayment calculators, as well as links to the online application(s).

Alfred University does not endorse or recommend any specific lender(s) for a private education loan. The terms and conditions for these loans vary, and families must research and decide which loan(s) best meet their needs.

Please visit FASTChoice to start your search for a private education loan.

Summer School

Current students interested in private loans for summer school should visit the Office of Student Financial Aid for counseling and to explore summer school aid options.