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- Types of Loans
- Alternative and Private Student Loans
- Federal Direct Parent PLUS Loans
- Federal Direct Subsidized and Unsubsidized 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 Perkins Loan
- Private Student Loans
Alternative and Private Student Loans
Alternative or private loans are non-federal loans offered by some banks and credit unions.
The purpose of an alternative or private 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 NDMU. An alternative loan cannot exceed your cost of attendance (financial aid budget) minus all other financial aid.
Note: Notre Dame of Maryland University 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.
Federal Direct Parent PLUS Loans
Parent 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 NDMU's estimated Cost of Attendance and other aid or resources expected to be received. Parent PLUS loans have an interest rate of 7.08% for the 2019-2020 Aid Year, this is the fixed rade for the life of the loan.
Eligibility
A parent applying for a Federal Parent PLUS Loan 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.
- All funds will disburse through the student's NDMU student 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 2019–2020 Parent PLUS loans, which will disburse after October 1, 2019 and before October 1, 2020, a 4.236% 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. Borrowers may be able to postpone principal payments while the 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.
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 NDMU during the previous academic year.
New Students/First Time Borrowers at Notre Dame:
Go to studentaid.gov and log in using the 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
A student's Federal Direct Loan award may be Subsidized, Unsubsidized or the combination of the two.
Subsidized Direct Loan
- Subsidized loans are only available to undergraduate students.
- The Subsidized Loan is awarded for the academic year and is based on the student's financial need, dependency status, and academic grade level.
- Financial need is calculated by the Cost of Attendance minus the Estimated Family Contribution (EFC) determined by FAFSA and any other aid received.
- The federal government subsidizes or pays the interest on the loan while the student is enrolled at least half-time and in an eligible period of deferment.
- Interest will be charged once the student's grace period begins.
Unsubsidized Direct Loan
- The Unsubsidized Loan is awarded based on the Cost of Attendance minus any other aid the student will receive, the student's dependency status, and the student's academic grade level.
- Students 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.
- Students may choose to defer the interest during enrollment and deferment periods, but it will be capitalized (added to the principal amount).
Interest Rates
For 2019-2020, the interest rates on all Federal Direct Loans (both subsidized and unsubsidized) is 4.53% for undergraduate students, and 6.08% for graduate or professional students.
Fees
For 2019–2020 loans, which will disburse after October 1, 2019, a 1.059% origination fee will be charged by the U.S. Department of Education.
Loan Limits for Each Year
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:
| STUDENT CLASSIFICATION | 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
| STUDENT CLASSIFICATION | 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
| STUDENT CLASSIFICATION | 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 |
Cumulative (Total) Loan Limits
Federal regulations set aggregate, or total, loan limits in addition to the annual loan limits. Students cannot borrow more than the Aggregate Loan Limit for all subsidized and unsubsidized loans at all schools.
| DEPENDENCY STATUS | 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 |