Loans
An education loan is a form of financial aid that must be repaid, with interest. Education loans come in three major categories: student loans, parent loans, and alternative loans (also called private student loans).
The ultimate responsibility of financing an education lies with the student. Students who finance their education with student loans must understand that with the acceptance of the loan comes the responsibility of prompt and full repayment.
The University stresses this responsibility not only because loan repayment is ethically correct, but also because loan default could eventually lead to loss of financial aid to future students.
Types of Loans
- Federal Direct Subsidized and Unsubsidized Loans
- Federal Direct Parent PLUS Loan
- Federal Direct Graduate PLUS Loan
- Federal Perkins Loan
- Private Student Loans
Federal Direct Subsidized and Unsubsidized Loans
The Federal Direct Subsidized Loan is a student loan that is available to undergraduate students only. The Federal Direct Unsubsidized Loan is a student loan that is available to undergraduate, graduate, and pharmacy students. Loan funds come directly from the U.S. government.
To Apply for the Federal Direct Subsidized or Unsubsidized Loan
First, the student must complete the Free Application for Federal Student Aid (FAFSA) and meet the eligibility requirements. Then, the student must follow the steps below.
Returning Students
There are no steps required to renew Federal Direct Subsidized or Unsubsidized loans for students who received this type of loan at Notre Dame during the previous academic year.
New Students/First Time Borrowers at Notre Dame:
Go to studentloans.gov and log in using your FSA ID, then:
Step 1: Choose the option Complete Entrance Counseling.
Step 2: Choose the option Complete Master Promissory Note (MPN).
Subsidized vs. Unsubsidized Loans
Your Federal Direct Loan award may be Subsidized, Unsubsidized or the combination of the two.
Subsidized Direct loan
- Effective July 1, 2012, the subsidized loan is only available to undergraduate students.
- The Subsidized Loan is awarded for the academic year and is based on your financial need, dependency status and academic grade level.
- Financial need is calculated by your Cost of Attendance minus your Estimated Family Contribution (EFC) determined by FAFSA and any other aid you will receive.
- The federal government subsidizes or pays the interest on the loan while you are enrolled at least half-time and in an eligible period of deferment.
- Interest will be charged once your grace period begins.
Unsubsidized Direct Loan
- The Unsubsidized Loan is awarded based on your Cost of Attendance minus any other aid you will receive, your dependency status and your academic grade level.
- You are responsible for the interest on this loan from the time the loan is disbursed until it is paid in full. The federal government DOES NOT subsidize the interest on this loan.
- You may choose to defer the interest during enrollment and deferment periods, but it will be capitalized (added to the principal amount).
Interest Rates
For 2015–16, the interest rates on all Federal Direct Loans (both subsidized and unsubsidized) is 4.29% for undergraduate students, and 5.84% for graduate students.
Fees
For 2015–16 loans, which will disburse after October 1, 2015, a 1.068% origination fee will be charged by the U.S. Department of Education.
Loan Limits for Each Year
In addition to the information below, please note that a new provision is in place that affects first-time borrowers as of July 1, 2013:
- Once the borrower has received Direct Subsidized Loans for a period that is 150% of the published length of the borrower's current education program, the borrower is no longer eligible for Direct Subsidized Loans.
- A first-time borrower who loses eligibility for additional subsidized loans loses interest subsidy on subsidized loans received on or after July 1, 2013 if the borrower did not complete the program AND continues enrollment in the program OR enrolls in another program of the same of shorter length.
For students enrolled as regular students in eligible programs, annual Federal Direct Loan limits are as follows:
Dependent Undergraduate Students
|
BASE AMOUNT (SUB/UNSUB) |
ADDITIONAL LOAN (UNSUB) |
TOTAL |
|
|
First-year |
$3,500 |
$2,000 |
$5,500 |
|
Sophomore |
$4,500 |
$2,000 |
$6,500 |
|
Junior |
$5,500 |
$2,000 |
$7,500 |
|
Senior |
$5,500 |
$2,000 |
$7,500 |
Independent Undergraduate Students and Dependent Undergraduate Students Whose Parents Cannot Borrow PLUS
|
BASE AMOUNT (SUB/UNSUB) |
ADDITIONAL LOAN (UNSUB) |
TOTAL |
|
|
First-year |
$3,500 |
$6,000 |
$9,500 |
|
Sophomore |
$4,500 |
$6,000 |
$10,500 |
|
Junior |
$5,500 |
$7,000 |
$12,500 |
|
Senior |
$5,500 |
$7,000 |
$12,500 |
Graduate and Pharmacy Students
|
BASE AMOUNT (SUB/UNSUB)* |
ADDITIONAL LOAN (UNSUB) |
TOTAL |
|
|
Graduate Students (pursuing Master's or Ph.D degree, CASE program) |
$8,500 |
$12,000 |
$20,500 |
|
Graduate Students (pursuing teaching certification, if independent) |
$5,500 |
$7,000 |
$12,500 |
|
Pharmacy Students |
$8,500 |
$24,500 |
$33,000 |
*Effective July 1, 2012 graduate and pharmacy students are no longer eligible for subsidized loans.
Cumulative Total Loan Limits
Federal regulations set aggregate, or total, loan limits in addition to the annual loan limits. You cannot borrow more than the aggregate loan limit for all subsidized and unsubsidized loans at all schools.
Aggregate Loan Limits
Effective July 1, 2008
|
MAXIMUM SUBSIDIZED |
MAXIMUM UNSUBSIDIZED |
|
|
Dependent Undergraduates |
$23,000 |
$31,000 |
|
Independent Undergraduates |
$23,000 |
$57,500 |
|
Graduate/Professional Students |
$65,500 |
$138,500 |
|
Certain Health Professional Students (ie Pharmacy) |
$65,500 |
$224,000 |
Parent PLUS Loan
PLUS loans help parents of dependent undergraduate students pay educational expenses. Loan funds come directly from the U.S. government. Parents can borrow up to the difference between Notre Dame's estimated Cost of Attendance and other aid or resources expected to be received. PLUS loans have a fixed interest rate of 6.84% for 2015–16 year.
Eligibility
A parent applying for a Federal PLUS must be the biological or adoptive parent of a dependent undergraduate student. Step-parents whose information is included on the FAFSA are also eligible to apply for the loan. Parents must have an acceptable credit history or be able to apply with an eligible co-signer. Application process is posted on the financial aid website.
Disbursement Process
- When the loan is scheduled to disburse, the Department of Education will send the funds to Notre Dame electronically
- The funds will disburse through the student's Notre Dame account
- After tuition and other charges on the account are paid, any remaining balance will be issued to the student or parent via a check (depending upon how the parent completed the application), and will be mailed to the address on record with the University.
PLUS Loan Fees
For 2015–16 loans, which will disburse after October 1, 2015, a 4.272% origination fee will be charged by the U.S. Department of Education.
Repayment Terms
Repayment begins within 60 days after the final disbursement of each loan. You may be able to postpone principal payments while your student is in school (up to four years). Contact the Direct Loan Servicer for repayment and forbearance options. The maximum repayment period is 10 years, and the minimum monthly payment is $50.
Perkins Loan
The Perkins loan is a federally regulated student loan that colleges and universities receive from the U.S. Department of Education. Funding is limited and is generally awarded to first year students with very high financial need. The average award is $1,000 per year.
The interest rate on Perkins loans is fixed at 5%.
Perkins loans have a nine month grace period after the student graduates or ceases half-time enrollment before repayment begins.
Alternative and Private
Alternative or private loans are nonfederal loans offered by some banks and credit unions.
The purpose of an alternative loan is to supplement a student's financial aid package. Alternative loans are not federally endorsed or guaranteed, but they generally must be certified by the Office of Financial Aid at Notre Dame. An alternative loan cannot exceed your cost of attendance (financial aid budget) minus all other financial aid.
Note: Notre Dame of Maryland does not endorse any specific lender or group of lenders. The application for an alternative student loan is made directly through the lending institution. As a part of this process, the Office of Financial Aid will certify enrollment and other information for the borrower.