Loans

The Federal Direct Loan Program requires that applicants are either U.S. Citizens or Permanent Residents. Applicants must complete the Free Application for Federal Student Aid (FAFSA) and be enrolled at least half-time. The lender for these loans is the U.S. Department of Education. For detailed information on Federal Direct Loans, visit www.direct.ed.gov.

To apply for a Federal Direct Loan, visit www.studentloans.gov.

Student Loans

Federal Direct Stafford Loans are available to students who filed a FAFSA and are enrolled at least half-time. The U.S. Department of Education serves as the lender.

Borrowing Limits Subsidized New Unsubsidized Eligibility Unsubsidized for Independent
or PLUS Loan Denied
Freshmen $3,500 $2,000 $4,000
Sophomores $4,500 $2,000 $4,000
Juniors $5,500 $2,000 $5,000
Seniors $5,500 $2,000 $5,000

Lifetime Aggregate Borrowing = $31,000 for dependent students (no more than $23,000 of which can be subsidized) and $57,000 (no more than $23,000 of which can be subsidized) for independent students or those whose parents were denied a Parent PLUS Loan.

Loans are subject to origination fees. As of October 1, 2016, for loans disbursed after this date, an origination fee of 1.069 percent is deducted from each disbursement for both the subsidized and unsubsidized Federal Direct Stafford Loan.

Subsidized Federal Direct Stafford Loans are based on financial need. The federal government pays the interest on subsidized loans for students who are enrolled at least half-time, during deferment periods and in some cases during the grace period.

Unsubsidized Federal Direct Stafford Loans are not based on financial need. Interest on unsubsidized loans will accrue while you are enrolled. Students may pay the interest on these loans quarterly while enrolled or choose to defer interest payments as long as they are enrolled at least half-time; however, interest does capitalize.

As of July 1, 2016, the interest rates on the Federal Direct Stafford Loans are as follows:

  • Stafford Loan Interest Rates are set at 3.76% for both subsidized and unsubsidized.
  • Graduate Students Stafford Loan Interest Rate is 5.31%

Direct Consolidation Loans allow borrowers to combine different eligible federal student loans into one Direct Consolidation Loan. Typically you would not do a consolidation loan until you are finished with borrowing including for post graduate studies.

Parent Loans

Federal Direct PLUS Loans are available to parents who have a dependent child in college. Individual eligibility is determined by subtracting all financial aid awards for the academic year from the cost of attendance. Financial need is not a requirement for this loan. Parents must apply and be approved for this loan each year. For loans disbursed on or after July 1, 2016, the interest rate is fixed at 6.31%.

Loans are subject to origination fees.  As of October 1, 2016, for loans disbursed after this date, an origination fee of 4.276 percent is deducted from each disbursement on the PLUS Loan.

Private Alternative Loans

Private alternative loans are private loan funds offered through a bank for the purpose of supplementing a student’s financial aid package. They are not federally endorsed or guaranteed, but they must be certified by the Office of Financial Aid to ensure the loan does not exceed your cost of attendance minus other financial aid. These loan funds are disbursed to the College and applied directly to your student account.

These loans generally require the borrower (the student) to be credit worthy or have a credit worthy co-signer and usually do not have as favorable interest rates as the federal programs. Private alternative loan interest rates, fees charged, repayment terms and repayment benefits vary between lenders.

Students are encouraged to file the FAFSA and apply for federal loans before applying for private alternative loans. For more information, contact the Office of Financial Aid.

The lender you choose will require you to complete a Private Education Loan Applicant Self-Certification form.  The lender may provide the form for you electronically.  We recommend you use the version provided by the lender because you may be able to expedite the form by signing electronically.

Austin College’s Preferred Lender List

Austin College offers a list of recommended lenders as a service to our students who do not already have a lender in mind for their private educational loans.

We conduct a thorough analysis of each lender’s products, services, and policies annually. We feel confident that the lenders we suggest to students and families will provide service and value that is at the top of the industry.

  • Students and parents are not required to use a lender on Austin College’s recommended list. Austin College will certify, without unnecessary delay, any loan application submitted by an eligible borrower, regardless of the lender providing the loan.
  • Austin College makes every effort to notify students of the lowest cost loans available. Before assisting eligible students in securing private loans, we award students any eligibility they may have for lower cost federal or state loans.

If you have questions regarding this selection process, or would like more information, please contact our office at finaid@austincollege.edu.