Federal Perkins Loan

The Perkins loan is a low-interest (5% fixed) federal loan program for students with exceptional financial need.  St. Olaf administers this program and determines which students are eligible for the program as well as the amount of the loan. The federal annual limit is $5,500.  However, due to limited funding, the average Perkins Loan at St. Olaf is approximately $2,500 per year.  Perkins loans are disbursed to the student’s account once all required documentation is received, a Perkins Master Promissory Note (MPN) is signed, and for first-time borrowers, an Entrance Counseling has been completed.

 

Federal Direct Loan Program

Federal Direct Student Loans are low-interest loans provided to students with capital provided by the federal government.  The Direct Loan may be offered as a Subsidized or an Unsubsidized Loan or a combination of both.  Repayment of the loan principal begins six months after the student graduates, withdraws, or enrollment drops below half-time status.

  • The Subsidized loan is a need-based loan and no interest accrues while the student is enrolled (at least half time) or during grace and deferment periods.  The interest rate is fixed at 6.8% for loans disbursed between 7/1/2012 and 6/30/2013.
  • The Unsubsidized loan is not based on need and interest accrues while the student is in school.  It is the student’s responsibility to pay the interest as it accrues OR the student can choose to have the interest capitalized (added to the principal balance).  The interest rate is fixed at 6.8%.

The Direct Student Loan origination fee is 1% which will be subtracted from the disbursement.

Direct loans are disbursed to the student’s account each term after all required documentation is received.  First-time borrowers must complete a Direct Loan Master Promissory Note (MPN) and Entrance Counseling. 

The yearly amount students can borrow each year for Subsidized and Unsubsidized loans depends on their grade level and dependency status.  Dependent students at St. Olaf can borrow:

Dependent Student Federal Stafford Loan Annual Limits

Base Eligibility1

Additional Unsubsidized Eligibility

Total Stafford Loan Eligibility2

Freshman

$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

1 Eligibility for subsidy on the base amount is determined by the results of the FAFSA.
2 The total amount of Stafford Loan is limited to cost of attendance minus other financial aid.

The aggregate (total) limit a dependent student may borrow for undergraduate attendance for all subsidized and unsubsidized federal loans is $31,000 (no more than $23,000 may be subsidized).

 

Federal Direct Parent Loan (PLUS) Program

Federal Direct Parent PLUS Loans can be used by a parent to borrow on behalf of dependent undergraduates.  The parent borrower may be the student’s mother, father, or stepparent (if the stepparent’s income and assets were reported on the FAFSA) of the student.  While parents of all income levels are eligible to apply, a credit check is required and performed by the U.S. Department of Education.

Eligible parents may borrow up to the cost of attendance minus any other aid received by the student.  

The interest rate for Direct PLUS Loans is a fixed rate of 7.9%.  Interest is charged during all periods, beginning on the date of the loan’s first disbursement.

PLUS Loans are also subject to a 4% origination fee which is deducted from the loan at the time of disbursement. 

Repayment begins within 60 days after the loan funds for the year are fully disbursed (within 60 days after the second disbursement). Parent Direct PLUS Loan borrowers may have the option of deferring repayment.  Click Deferment Options for Parent Direct PLUS Loan Borrowers for more information.


Student Alternative Loan

Unlike federal loans, student alternative (or private) loans are non-federal educational loans offered through private lenders typically issued in the student's name and requiring a credit-worthy co-signer. Alternative loans typically have variable and higher interest rates, are based on credit scores, may require interest payments while you are in school, have more fees, and less flexible repayment options than federal loans. These loans vary in terms, conditions, and eligibility requirements. You should carefully evaluate the criteria for each private loan program to determine the one that best meets your unique needs and situation.

St. Olaf College does not suggest nor endorse lenders - students may choose any lender who offers alternative educational loans for students who attend St. Olaf. We offer a student alternative loan lender selection tool, FASTChoice, based on lenders that other St. Olaf students have utilized in the past 3-5 years. Again, you are welcome to choose any lender you wish. The lender selection tool will provide you with information on each loan product in a way that allows you to understand and compare them.