Federal Direct Loan 

The Federal Direct Loan is the cornerstone to any borrowing that takes place at Ursinus College. There are two types of Federal Direct Loans-subsidized and unsubsidized.

The subsidized loan is a need-based loan with the accruing interest paid by the federal government during your in-school, deferment and grace periods*.  The principal is also deferred while the student is enrolled at least half-time. The fixed interest rate on the subsidized loan first disbursed between 7/1/23 – 6/30/24 is 5.50%.  The rate is effective 7/1/23. 

 *Note:  If you receive a Federal Direct Subsidized Loan that is first disbursed after 7/1/12, you will be responsible for paying any interest that accrues during your grace period.  If you choose not to pay the interest that accrues during your grace period, the interest will be added to your principal balance.

The unsubsidized loan is available to students who do not demonstrate need to qualify for the subsidized loan or whose parents do not qualify for the Federal Direct Parent PLUS Loan Program. The principal payment is deferred while the student is enrolled at least half-time however the interest which begins accruing at disbursement is the responsibility of the borrower. The fixed interest rate on the unsubsidized loan first disbursed between 7/1/23 – 6/30/24 is 5.50%.  The rate is effective 7/1/23.

The chart below indicates the level of borrowing by class under the Federal Direct Loan Program. Repayment of Federal Direct Loans begins six months after the student graduates or drops below half-time enrollment. (Note:  Full-time enrollment equals twelve credit hours per semester and half-time enrollment equals six credit hours per semester). 

Dependent undergraduate students whose parents are not deemed credit worthy for the Federal Direct Parent PLUS loan program are eligible to borrow an additional $4000 Federal Direct Unsubsidized Loan as a freshmen and sophomore, and an additional $5000 Federal Direct Unsubsidized Loan as a junior and senior.  The Federal Direct PLUS loan credit pre-approval form can be found on our Ursinus College financial aid website.

Please note that you pay a loan origination fee that is 1.057% of the principal amount of your Federal Direct Loan. The fee is deducted from each loan disbursement, so the loan amount that is actually credited to your account is less than the amount you have borrowed.

 

Federal Direct Parent PLUS Loans

and

Private (Alternative) Loans

Over the next few months, you and your family will be finalizing the way you plan to finance your college education. You may be awarded scholarships, grants, and/or federal loans.  Increasingly, families find that, even after all these means are exhausted, additional funding is still needed.  There are several options that could be explored.  Three common ones are briefly compared below:

Feature	Federal Direct Parent PLUS Loan	Private Loan	Home Equity Loan
Borrower Eligibility	Parent with dependent student	Student (co-signer is often recommended or required)	Homeowner
Loan Payments	Typically, a shorter repayment which means less finance charges	Typically, a longer repayment term which means smaller monthly payments, but greater finance charges	Monthly payments for 10 years – comparable to PLUS payments
Payment Insurance	Discharged in the event of total and permanent disability or death	None	None
Interest	Fixed rate	Fixed or variable rates available	Fixed or variable rates available
Approval Criteria	Borrower credit history	Credit history and debt-to-income ratio	Credit history, debt-to-income ratio and equity in home
Application	Master Promissory Note is good for 10 years.  Borrower must pass annual credit check	Must apply for each loan	Must apply for each loan or obtain adequate line-of-credit
In-school Deferment	Yes	Yes	No
Prepayment Penalty	No	Most lenders have no penalty	Penalty may apply

It is important to compare these and other options to insure that you choose the best option(s) for your family.  You may select one financing source or a combination of sources to close the funding gap.  NOTE:  When applying for a Parent PLUS or alternative loan, it is strongly recommended to request funds for the full academic year. 

To apply for a Federal Direct Parent PLUS Loan you apply online at https://studentaid.gov.

To apply for a Private loan you can refer to the website www.elmselect.com for further information.

The Office of Student Financial Services does not offer specific guidance on Home Equity Loans.  If you wish to utilize this option you should contact a reputable mortgage lender or use one of the helpful online comparison tools. 

 

 

Loan Practices for Private (Alternative) Loans

1.    Lender Principle & Guidelines

The College does not have a list of preferred private lenders. We do provide an interactive loan comparison tool found at www.elmselect.com, which may provide some private loan options that fit your needs.  

2.    Gift/Trip Prohibition

All College employees must refrain from accepting any personal gift, meal or trip from a lender that exceeds a nominal value.  The College may accept gifts on behalf of students in the form of scholarships or grants as long as the gift is disclosed and does not result in preferential treatment.

3.    Revenue Sharing Prohibition

The College will not receive anything of any value from a lender in exchange for preferential treatment or a competitive advantage of any kind.