Loans for Graduate Students
Federal Direct Stafford Loan
Eligibility
The largest source of low-interest loans administered by the U.S. Department of Education is the Federal Direct Stafford Loan program. Federal Direct Stafford Loan funding is available to all graduate students who have completed the FAFSA, enrolled as a matriculated student in an eligible degree program, registered for at least six credit hours per term, are U.S. citizens or resident aliens, and who are not in default on a prior student loan. Creditworthiness is not a requirement for the Stafford Loan.
Graduate students are eligible to borrow the Unsubsidized Stafford Loan. The unsubsidized loan is not based on need and interest is charged during all periods including in school, grace, and deferment.
AMOUNTS
Students can borrow up to $20,500 per year through the Unsubsidized Stafford Loan. In addition to annual borrowing limits, students are also limited in the total amount they can borrow from the Federal Direct Stafford Loan program during their undergraduate and graduate academic careers. These limits are referred to as aggregate loan maximums and will vary depending on the student's dependency status and degree being sought. Graduate students may borrow a lifetime maximum of $138,500 from the Stafford Loan program with no more than $65,500 in the Subsidized Stafford Loan. These amounts include all Stafford Loan borrowing at the undergraduate level.
APPLICATION
Monmouth University's Financial Aid Office will notify the student when to sign their Electronic Master Promissory Note (E-signature MPN) for the Stafford Loan. The student need not seek a loan application from a private banking institution. Borrowers should be aware that their loan will be submitted to the National Student Loan Data System (NSLDS) and will be accessible by authorized agencies, lenders, and institutions.
DISBURSEMENT
Monmouth University is responsible for delivering the funds to the student; funds will be transferred electronically to the student's account. All first-time Federal Direct Stafford Loan borrowers must participate in a loan counseling session before receiving the first disbursement of their loan proceeds. For your convenience, you are able to complete this session online. Please click here to begin the entrance counseling session.
INTEREST AND FEES
New loans first disbursed before July 1, 2008 will have a fixed interest rate of 6.8%. Borrowers are charged, by the federal government, an upfront origination fee of one percent (1%) of the principal amount of the loan.
REPAYMENT
For students borrowing under the Unsubsidized Stafford Loan Program, the interest must be paid by the borrower. This can be done in one of two ways. While the student is enrolled, the borrower can pay the interest as it accrues. Alternatively, rather than pay the interest during periods of enrollment, borrowers can have that interest capitalized, which means adding it to the principal amount borrowed. All capitalized interest must be repaid. The important thing to note here is that capitalized interest becomes principal in this process. Thus, students who use this second option end up paying interest on accrued (and then capitalized) interest.
Repayment of principal and interest begins six months after graduation or termination of enrollment on at least a half-time basis. To see what your repayment may be, you can look at the standard repayment table. The federal government also requires that students complete an exit counseling session when they graduate, withdraw, or drop below half-time attendance (e.g., less than six credits). For your convenience, you are able to complete this session online. Please click here to begin the exit counseling session.
Alternative Loans
Alternative Loans are available to students through private lenders. These types of loans are an option for students who are either ineligible to borrow through the Direct Loan program or who have exhausted their eligibility for Direct Loan funding. Generally, students may apply for a loan of up to the cost of education, as determined by the Financial Aid Office, minus any other aid (including federal loans).
Alternative Loans are not regulated by the federal government and the terms and conditions of the loans may vary widely among lenders. Since there are many options, you will want to compare lenders to find the Alternative Loan that best meets your needs. As a starting point, we have compiled a list of preferred lenders. The lenders appearing on the list have been chosen without prejudice and for the sole benefit of Monmouth University students. Interest rates and fees, borrower benefits, life of loan servicing, and meeting customer service standards have all been taken into consideration on our lender evaluation scorecard. You are free to choose ANY lender-whether it is on the list or not-without penalty. In the event that you choose a lender not appearing on the list, please notify the Financial Aid Office so we may assist in processing your loan.
Once you have selected a lender, you will need to complete an application. All lenders offer the option to apply online. We strongly recommend applying online, as typically applicants will receive a credit decision within moments of completing the application. The Financial Aid Office will then certify the loan and once the semester begins, funds will be forwarded to the University and credited to the student's account.
Our code of conduct with regard to loans may be viewed online.
PLUS Loans for Graduate Students
EligIbility
The student borrower must meet the general requirements listed below.
- Student must have filed a Free Application for Federal Student Aid (FAFSA).
- Student must be matriculated in a degree program.
- Student must be registered on at least a half-time basis (6 credits per term).
- Student must maintain satisfactory academic progress.
- Student must not be in default on a federal educational loan or owe an overpayment on an educational grant.
- Student borrower must have a satisfactory credit history as determined by the federal loan servicer.
- Student borrower and student must be a U.S. citizen or eligible noncitizen.
The Department of Education will check your credit when you apply for the loan. If you are found to have an adverse credit history, you may still borrow a PLUS Loan if you get an endorser who does not have such a history. An endorser is someone who agrees to repay the loan if you do not. In some cases you may also be able to obtain a PLUS Loan if you document to the Department of Education’s satisfaction that there are extenuating circumstances related to your adverse credit history.
Application
We will begin processing applications in early June.
Starting in the 2011-2012 academic year, students who are interested in borrowing a Direct PLUS Loan may complete the Direct PLUS Request Process at www.studentloans.gov. Student borrowers will be able to do the following:
- Complete a PLUS application
- Receive an instant credit decision
- Appeal the credit check decision during the application process
- Complete the Federal Direct PLUS Master Promissory Note (MPN) (new borrowers only)
- Have an endorser co-sign an application
We strongly recommend that you complete the PLUS application process online at www.studentloans.gov, as this will significantly speed up processing of your loan. In the event that you do not wish to complete the process at www.studentloans.gov, you must either submit Monmouth University’s form online or request a paper request form from the Financial Aid Office. New borrowers must also complete an MPN at www.studentloans.gov or request a paper MPN from the Financial Aid Office. Borrowers should be aware that their loan will be submitted to the National Student Loan Data System (NSLDS) and will be accessible by authorized agencies, lenders, and institutions.
Interest Rates and Fees
For loans disbursed after July 1, 2009, the interest rate is fixed at 7.9 percent. Disbursement is the payment of the loan proceeds by the lender.
Borrowers are charged, by the federal government, an up-front origination fee of 4% of the principal amount of the loan. The fee will be proportionally deducted from each loan disbursement.
Repayment
The repayment period for Federal Direct PLUS loans begins on the day the loan is fully disbursed. Unless the parent borrower requests an in-school deferment, the first payment of interest and principal is due 60 days after the loan is fully disbursed. An in-school deferment allows repayment to begin six months after the student ceases to be enrolled on at least a half-time basis. Deferment of Federal Direct PLUS loans is for principal only; interest continues to accrue and the borrower must pay all of the accrued interest on the loan after it is disbursed.
Standard Repayment
With the standard plan, you'll pay a fixed amount each month until your loans are paid in full. Your monthly payments will be at least $50, and you'll have up to 10 years to repay your loans.
Extended Repayment
To be eligible for the extended plan, you must have more than $30,000 in Direct Loan debt and you must not have an outstanding balance on a Direct Loan as of October 7, 1998. Under the extended plan, you have 25 years for repayment and two payment options: fixed or graduated. Fixed payments are the same amount each month, as with the standard plan, while graduated payments start low and increase every two years, as with the graduated plan below.
Graduated Repayment
With this plan your payments start out low and increase every two years. The length of your repayment period will be up to ten years. If you expect your income to increase steadily over time, this plan may be right for you. Your monthly payment will never be less than the amount of interest that accrues between payments.
Please click HERE to estimate your monthly payment on each of the above plans.
Discharge/Cancellation
You must repay your loan even if the student doesn’t complete or can’t find a job related to his or her program of study, or if you are unhappy with the education you paid for with your loan.
However, the Department of Education may discharge (forgive) your loan if you: (a) have your loan discharged in bankruptcy, (b) die, and/or (c) you become totally and permanently disabled.
For more information on discharge/cancellation, please visit www.direct.ed.gov/cancellation.html.
