As part of a financial aid package, student and/or parent loans are often an important part of paying for a college education. Federal loans can be borrowed in students’ or parents’ names (for dependent students), and must be repaid. However, most are at a significantly lower interest rate than other private loans.
In order to borrow student or parent loans—or to see if they might be a good option for you and your family—you must complete a FAFSA for each academic year you want loan funding. Generally, you will start loan repayment six months after you graduate or leave college.
Please note that North Park is not the lender or servicer of any student loan. If you do access student loans, you are responsible for submitting correct, current address information to your lender/servicer for any loans you take out. This is especially important as you leave North Park and enter repayment. Name and address information updated at North Park will not be forwarded to your lender/servicer.
Undergraduate students who complete a FAFSA and are enrolled at least half-time in a degree program may be eligible for need-based subsidized Stafford Loans. If you qualify for a subsidized Stafford Loan, the government will pay the interest on your loan while you are a student.
If you do not qualify for a subsidized loan, but still complete your FAFSA and are enrolled at least half-time, you may borrow an unsubsidized Stafford Loan. Interest on this loan will accrue throughout the life of the loan, but you are not required to make interest payments while in school.
Stafford Loans for undergraduate students that are disbursed on or after July 1, 2016, will have an interest rate of 3.76%.
The origination fee (sometimes called a loan fee) will be 1.068% for loans first disbursed on or after July 1, 2016. The origination fee will be 1.069% for loans first disbursed on or after October 1, 2016.
The federal government set loan limits for undergraduate students based on how many college credit hours you have completed:
- Students with 0–29 completed college credit hours can borrow up to $3,500 per year in a subsidized loan and $2,000 per year in an unsubsidized loan.
- Students with 30–59 completed college credit hours can borrow up to $4,500 per year in a subsidized loan and $2,000 per year in an unsubsidized loan.
- Students with 60 or more completed college credit hours can borrow up to $5,500 per year in a subsidized Stafford Loan and $2,000 in an unsubsidized Stafford Loan.
You do not have to make payments on your Stafford Loans while you are in school. Repayment begins six months after you cease to be enrolled at least half-time (six credits for undergraduate students; four credits for graduate students), and lasts at least 10 years. However, your loan servicer may provide other options for deferment or graduated repayment depending on your financial circumstances when you are no longer is school. There is no penalty for prepayment.
If you have never borrowed a Federal Stafford Loan before, then you must complete a Direct Loan Master Promissory Note (MPN). You also must complete Direct Loan Entrance Counseling. Both of these items can be done online using your FSA ID. These documents only need to be completed one time (rather than annually, like the FAFSA). They will be good for all of the Stafford Loans that you borrow while attending North Park.
Both of these items, the MPN and Entrance Counseling, must be received by the Financial Aid Office before your loan can be processed.
If you are a dependent student, your parent(s) may borrow Parent PLUS Loans to help cover the cost of your attendance. The maximum amount they may borrow is your cost of attendance minus any other aid that you are receiving. Cost of attendance includes tuition, personal expenses, transportation, and books. It is usually higher than your direct costs so that you may be able to borrow funds for additional expenses. Your financial aid cannot exceed your cost of attendance.
In order for your family to apply for a Parent PLUS Loan, you must complete the FAFSA as a dependent student. To be eligible to borrow a PLUS loan, your parent must not have adverse credit. If they are denied for the PLUS loan, you will be eligible for an additional unsubsidized Stafford Loan.
The interest rate on these loans is a fixed 6.31%. Loans first disbursed on or after July 1, 2016, will be subject to an origination fee of 4.272%. Loans first disbursed on or after October 1, 2016, will have an origination fee of 4.276%.
Repayment for Parent PLUS Loans begins 60 days after the final disbursement of the loan is received, and the repayment term is up to 10 years. Parents do have the option to defer payment on the PLUS Loan while you are enrolled at least half-time (six credits per semester). This choice can be selected when completing the PLUS Loan Application. Parents can also contact Direct Loan Servicing ((800) 557-7394) to set up this payment option after the funds have been disbursed.
There must be a PLUS Loan Master Promissory Note (MPN) on file for each student. Your parent may not use the same PLUS promissory note for more than one student.
If your parent would like to borrow a PLUS Loan on your behalf, and has never done so before, they must complete both the PLUS Loan Application and the PLUS Loan Master Promissory Note (MPN) online using their own FSA ID.
If your parent has borrowed a Direct PLUS Loan on your behalf in the past, they only need to complete the PLUS Loan Application. The MPN does not need to be redone. The PLUS Loan Application is completed online. They will use their own FSA ID to sign into the website to complete this application.
Parents that have borrowed a PLUS Loan for the 2016–2017 academic year and wish to make changes to the loan must submit a PLUS Loan Change Form form to the Financial Aid Office. This form must be completed by the parent borrower of the PLUS Loan, not the student.
We recommend exhausting all federal financial aid options before applying for a private loan as private loans are not regulated by North Park or the government. They are often not as favorable as the PLUS and/or unsubsidized Stafford Loans in terms of fees, interest rates, and repayment schedules.
If you do determine that you need to access a private loan as part of your college funding plan, the following details are important to consider:
- Most dependent students will need a credit-worthy cosigner to be approved for a private loan.
- The application process and terms of the loan (interest rate, repayment terms, etc.) are set on an individual basis, and are usually related to the credit of the borrower and his or her cosigner. Make sure you read and understand all of the terms of the loan before you agree to borrow these funds.
- Some private loans require a school certification, so the loan is added to your account as pending aid and the funds are sent directly to North Park. Others do not, so the funds are sent directly to you. Once you receive loan funds that are sent directly to you, you must make a cash/check payment to North Park. Be advised that direct-to-consumer loans are often more expensive than loans that require school certification.
- ELMSelect provides a valuable tool for finding the right private loan to meet your needs.
Students who leave North Park are required to complete exit counseling for their federal student loans (Stafford, Perkins, and Nursing Loans, if applicable). Exit counseling will explain to you your rights and responsibilities as a student loan borrower. While you may have already paid off your loans, made payment arrangements with your lenders and servicers, or will be continuing your education elsewhere (which means that you will not begin repayment at this time), this exercise will provide you with valuable information about your student loans.
It is likely that you have borrowed multiple types of federal and/or private loans. You may have borrowed funds from a variety of lenders or loans may have since been sold to another lender/servicer. It is important to keep track of what you borrowed and who currently owns your loans so that you remain current on your accounts. You can access your federal loan history online. You will need your FSA ID to access your records.
- Exit counseling can be completed online. You must complete an exit session for each loan type that you borrowed while at North Park as each program has its own rules and regulations. The Financial Aid Office will receive your information electronically.
- Stafford Loan Exit Counseling session can be done online. You will need your FSA ID to complete the counseling session.
- All Perkins and Federal Nursing Loan Exit Counseling sessions are completed online with Mapping Your Future.
One final note as you leave North Park and enter repayment: Please make sure that you keep your contact information up to date with your lender/servicer. Name and address information updated at North Park will not be forwarded to your lender/servicer.