Loan Programs
Perkins Loan | Federal Stafford Loan (Subsidized and Unsubsidized)
SELF Loan | Plus Loan | Student Alternative Loans
Federal Perkins Loan
Summary: One of the lowest cost student loans available, the Federal Perkins Loan, is a need-based, subsidized loan, on which 5% annual interest is charged when the student enters repayment nine months after leaving school. Payment on the Perkins Loan is easily deferred during at least half-time enrollment in graduate school, and for participation in programs such as the Peace Corps. Various loan forgiveness options may be available for work in certain non-profit areas, police work, and teaching in federally designated teacher shortage areas.
Source: The Perkins Loan is a federal "campus-based fund," which means the federal government allocates a small amount for each participating college every year, and each college adds to that amount what it has collected from borrowers currently in repayment. Therefore, each college has a different "pot of money" to work with and different student needs to be met, so Perkins Loan award amounts may vary from school to school. Repayment of the loan will be to St. Olaf through a servicer employed by our Business Office.
Who Is Eligible: The Perkins Loan is a need-based loan, and the federal government requires that St. Olaf award it to students with the greatest need. Therefore, students who have remaining need and who demonstrate eligibility based on St. Olaf's packaging criteria and fund availability will be awarded this loan.
How To Apply: In order to be considered for the Perkins Loan, all students must complete the Free Application for Federal Student Aid (FAFSA). First Year students must also complete the CSS Profile, while returning students are required to complete the St. Olaf Application for Financial Aid. You will automatically be considered for this program once these forms are received, and your eligibility for the Perkins Loan will be presented in your award letter. If you are awarded a Perkins Loan, you will be contacted after you arrive on campus to sign a Promissory Note.
How Much is Available: Awards range from $500 to $4,000 per academic year, depending upon fund availability and remaining financial need.
Cost of Borrowing: The 5% annual interest rate charged during repayment of principal and interest. The repayment schedule is usually 10 years.
Federal Stafford Loan (Subsidized and Unsubsidized)
Summary: The most commonly used student loan at St. Olaf, the Stafford Loan is a low-cost and flexible loan that is available for all students who have a need for funds. The fixed interest rate is 6.8%. The federal government picks up the interest on the subsidized loan while the student is in school. Repayment of the principle and interest begins six months after the student leaves school.
The Stafford Loan is a federally guaranteed loan that has special features designed for new college graduates. For example, the lender is able to use some flexibility and can make various arrangements (that do not adversely affect credit rating) if a borrower is experiencing financial difficulties after entering repayment. Payment is also easily deferred during at least half-time enrollment in graduate school.
Source: The Stafford Loan is available through private lenders.
Who Is Eligible: All students may apply for a Federal Stafford Loan. Your remaining financial need will determine whether you qualify for the subsidized and/or the unsubsidized Stafford Loan. The subsidized Stafford Loan is need-based, while the unsubsidized loan is non-need-based. Some students qualify only for the subsidized loan, others only for the unsubsidized, and others for a mixture of both.
If you apply for need-based financial aid, your eligibility will be presented in your award letter or in a letter notifying you of non-need based options.
How To Apply: In order to be considered for the Stafford Loan, all students must complete the Free Application for Federal Student Aid (FAFSA). First Year students must also complete the CSS Profile. Returning students are required to complete a St. Olaf Application for Financial Aid. You will automatically be considered for this program once those forms are received, and your eligibility for the Stafford Loan will be presented on you award letter. If you have never borrowed a Stafford Loan before, you may apply online. Do not forget to complete your Stafford Loan Entrance Counseling, which is required.
How Much is Available: Annual loan limits for dependent students are as follows:
1st year - $3,500
2nd year - $4,500
3rd year - $5,500
4th year - $5,500
As of July 1, 2008, students are eligible to borrow an additional $2,000 in Unsubsidized Stafford Loan.
Cost of Borrowing: Depending on the lender that is chosen, there may be a guarantee and/or origination fee of up to 4% charged.
Apply for a Federal Stafford Loan
Repaying your Federal Stafford Loan
Minnesota Student Educational Loan Fund (SELF LOAN)
Summary: The SELF Loan is a low-cost, unsubsidized and non-need based loan available to student borrowers with an eligible co-signer. The SELF Loan has a variable interest rate which can change every 3 months throughout the life of the loan. Interest payments must be made while in school and during a "transition period" that can last for up to three years after the student leaves school. At the end of the transition period the student enters repayment of principal and interest.
The SELF Loan is a lower cost financing mechanism for student borrowers with an eligible co-signer. The repayment options on the SELF loan are less flexible than the Federal Stafford Loan. The SELF Loan is more difficult to defer during enrollment in graduate/professional school, and if the student experiences difficulty meeting the repayment terms, the lenders does not have other options to offer, and payment simply reverts to the co-signer.
Source: The SELF Loan is available through the State of Minnesota.
Who Is Eligible: All students who have remaining costs to cover after all other aid is considered, and can secure a credit-worthy co-signer may apply for the SELF Loan. The SELF Loan is available to any student attending a Minnesota post-secondary institution, and to all Minnesota residents attending out-of-state institutions that participate in the SELF Loan program.
How To Apply: You may apply online for a Self loan.
How Much is Available: Sstudents may borrow up to $7,500 per academic year. A student may not borrow more than the cost of attendance less any other financial aid received.
Cost of Borrowing: There are no up front fees charged on the SELF Loan. The only cost of borrowing is the interest charged during in-school periods and during the 10-year repayment period. Interest rates on the SELF Loan vary quarterly. As of April, 2008, the interest rate on the SELF Loan is 6%.
Options for Parents
Federal PLUS (Parent Loan for Undergraduate Students) Loan
Summary: The Federal PLUS Loan is a long-term, non-need-based loan available for parent(s) to borrow on behalf of an undergraduate student. The fixed interest rate is 8.5%. Repayment of principal and interest begins within 60 days after the second disbursement, and a 10-year repayment is generally offered. This lengthy repayment period is what makes the PLUS Loan attractive to some families - at current interest rates, a $10,000 loan can be repaid over ten years for about $100 a month.
Source: The PLUS Loan is available through private lenders. You may apply online for a PLUS Loan.
Who Is Eligible: Any parent (custodial or non-custodial) of a dependent, undergraduate student who has remaining cost to meet may apply for a PLUS Loan. A credit check for the borrower is required prior to approval of the loan. While debt-to-income ratio is generally not a consideration in eligibility, an adverse credit history may prevent a parent from being approved for a PLUS Loan. (If the parent is denied a PLUS Loan the student may be eligible to borrow additional funds from the unsubsidized Stafford Loan - contact the Office of Financial Aid for details.)
How To Apply: You may apply online for a PLUS Loan.
How Much is Available: Each year a parent may borrow up to the cost of attendance less any other financial aid received.
Cost of Borrowing: Depending upon the lender chosen, there may be a guarantee/origination fee of up to 4% charged up-front (i.e. deducted from the gross proceeds of the loan). St. Olaf will credit this fee back to the student's account annually
Student Alternative Loans
After all other financing options have been considered and appropriately utilized, private lenders have made available a variety of alternative educational loans for students. These are non-need-based, unsubsidized variable interest rate loans, and can provide funds for a student to borrow to meet all remaining costs. These are student loans and, if the student has no adverse credit history, can sometimes be utilized without a co-signer. However, in most cases, the student can receive more favorable terms on an alternative loan if a co-signer is used. Contact the Office of Financial Aid for more information on these options. Also, try a debt calculator to try and better understand your borrowing options.
Apply for a Student Alternative Loan
