2009-2010 Loan Options
Federal Student Loan Programs
Students must complete the Free Application for Federal Student Aid (FAFSA) to be considered for federal student loan programs.
William D. Ford 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 5.6% for loans disbursed between 7/1/09 and 6/30/2010.
- 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 1.5% with a Direct Loan up-front rebate of 1%, resulting in a 0.5% fee, which will be subtracted from the dibursement. To keep the rebate, borrowers must make their first 12 monthly payments on time.
Direct loans are disbursed to the student’s account each term after all required documentation is received. First-time borrowers must complete a 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. |
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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).
APPLY FOR A FEDERAL DIRECT STUDENT LOAN
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 limiting 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.
APPLY FOR A FEDERAL PERKINS LOAN
(only if you have been awarded a Federal Perkins Loan; refer to your most recent financial aid award letter)
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. However, borrowers are given a 1.5% fee rebate at the time of disbursement resulting in a net fee charged of 2.5%. To keep the rebate, borrowers must make their first 12 monthly payments on time.
Repayment begins within 60 days after the loan funds for the year are fully disbursed (within 60 days after the second disbursement).
APPLY FOR A FEDERAL DIRECT PARENT PLUS LOAN
Student Alternative Loans
(including Minnesota SELF Loan)
Alternative student loans are available from private lending sources to assist families with educational expenses. Students should exhaust their eligibility in the federal loan programs before borrowing through an alternative student loan program. Eligibility for alternative student loans is based on the credit-worthiness and ability to repay, not on financial need. Most loans offer deferment of principal payments while the student is enrolled.
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. St. Olaf offers a student alternative loan lender selection tool (see link below) based on lenders that other St. Olaf students have utilizied in the past 3-5 years. Again, you are welcome to choose any lender you wish. To view lenders that other St. Olaf students have utilizied, click the link below.
APPLY FOR A STUDENT ALTERNATIVE LOAN
Click here for 2008-2009 Loan information
