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Types of Loans
A student must submit a Free Application for Federal Student Aid (FAFSA) (and enter the William Peace University school code: 002953) for the appropriate academic year before applying for a federal loan. Based on the student's FAFSA report, the Office of Financial Aid will determine the maximum amounts and types of loans for which the student and/or parent may apply.
Federal Stafford Loans
The Federal Stafford Loan Program consists of subsidized and unsubsidized loans. Repayment of Federal Stafford Loans may be deferred while a student is attending the university on a half time or full time basis. Completion of the FAFSA determines your eligibility Stafford loans. You can think of the FAFSA as your Stafford loan application. In order for your Stafford loan to be disbursed to your student account, you must complete your entrance counseling AND Master Promissory Note (MPN) with the US Department of Education online at https://studentloans.gov.
The Federal Stafford Subsidized Loan is awarded according to demonstrated financial need. Interest is paid by the federal government as long as a student is enrolled at least half time at the university. The student must begin repayment of the loan six months after leaving school or dropping below half time.
The Federal Stafford Unsubsidized Loan is awarded regardless of a student's demonstrated need. Interest begins accruing from the date of first disbursement. By making interest payments while in school, a student can avoid capitalization of the interest. When interest is capitalized, it is added to the principal amount of the loan upon which further interest charges are based.
Stafford Loan Limits
Dependent undergraduate students enrolled in a degree-seeking program may borrow per year up to
- $5,500 as a first-year student ($3,500 of which may be a subsidized loan)
- $6,500 as a sophomore (min 30 credit hours earned) ($4,500 of which may be a subsidized loan)
- $7,500 as a junior or senior (min 60 credit hours earned) ($5,500 of which may be a subsidized loan)
The maximum amount a dependent undergraduate student may borrow is $23,000.
Independent undergraduate students and dependent students whose parents have been denied access to a Federal PLUS Loan may borrow per year up to
- $9,500 as a freshman ($3,500 of which may be in subsidized loans)
- $10,500 as a sophomore ($4,500 of which may be in subsidized loans)
- $12,500 as junior/senior ($5,500 of which may be in subsidized loans)
The maximum amount an independent student may borrow is $57,500.
Federal Parent Plus Loans (for parents of dependent students)
Federal PLUS loans are federally sponsored loans that parents can obtain to help pay the cost of education for their dependent undergraduate children. In order to obtain a PLUS loan, the student must first complete the Free Application for Federal Student Aid (FAFSA). In order for your parent's PLUS loan to be disbursed to your student account, your parent will complete the PLUS application and Master Promissory Note (MPN) with the US Department of Education online at https://studentloans.gov. Parents may borrow up to the cost of attendance less any other aid received by the student annually. Based on the student's FASFA information, the Office of Financial Aid will determine the maximum amount of PLUS loan eligibility. Parents may opt to borrow less than the maximum amount awarded.
If upon applying for this loan, the pre-screening reveals that your parents would be denied for the loan, you will then be automatically eligible for a Federal Unsubsidized Stafford Loan for up to $5,000. This loan will be added to your financial award upon notification of a parents denied application.
Origination fees set by federal statue are charged by the U.S. Department of Education and are deducted from the loan proceeds.
Federal Stafford and Federal PLUS Loans are available through the Federal William D. Ford Direct Loan Program. Under the Direct Loan Program, the U.S. Department of Education is the lender and will process loans for students and/or parents through the University.
The information of students and parents is submitted to the National Student Loan Data System (NSLDS), and will be accessible by guaranty agencies, lenders, and institutions determined to be authorized users of the data system.
Alternative Loans (loans in the students name)
Alternative education loans (also known as private education loans) are loans that are often used help bridge the gap between a student's cost of attendance and the amount of federal, state and institutional financial aid that a student is awarded. Alternative loans are credit based loans that are offered by private lenders.
William Peace University strongly encourages all students to complete the FAFSA and evaluate their financial aid award before applying for an alternative loan. Federal loans (Stafford and PLUS) should always be the first option to consider when borrowing money to finance an education. If you are considering an alternative loan, you should carefully evaluate a loan program to determine if it best meets your needs.
Code of Conduct for Education Loans
Officials are prohibited from:
- revenue-sharing arrangements with any lender
- receiving gifts from a lender, a guarantor, or a loan servicer
- contracting arrangements providing financial benefit from any lender or affiliate of a lender
- directing borrowers to particular lenders, or refusing or delaying loan certifications
- offers of funds for private loans
- call center or financial aid office staffing assistance
- advisory board compensation