Loans

Educational loans are considered a form of financial aid that many students utilize to help meet the cost of attendance that is not covered through personal resources or any scholarship and grant funding. There are a variety of loan programs for you to consider. It is important to understand the loan options available so you can make informed decisions about how much loan money to should borrow, and which loan program best suits your needs.

Overview
Federal Direct Loans

There are two types of federal Direct loans and your eligibility for both is determined using your financial aid application.

  • Direct subsidized loans are interest-free while you are enrolled in college.
  • Direct unsubsidized loans accrue interest while you are enrolled. You can choose to pay the interest each month while in school, or allow the interest to accumulate.

Borrowing limits for each academic year depend on your class level:

  • $5,500 Freshmen (maximum $3,500 may be subsidized)
  • $6,500 Sophomores (maximum $4,500 may be subsidized)
  • $7,500 Juniors/Seniors (maximum $5,500 may be subsidized)
  • $20,500 Graduate Students, all in unsubsidized loans

Interest rates

Direct subsidized:

  • The interest rate for Federal Direct Subsidized Loans is fixed at 4.66% for 2014-2015.

Direct unsubsidized:

  • The interest rate for Undergraduate Federal Direct Unsubsidized Loan is fixed at 4.66% for 2014-2015.
  • The interest rate for Graduate Federal Direct Unsubsidized Loan is fixed at 6.21% for the 2014-2015.

Origination Fees on Federal Direct Subsidized and Unsubsidized Loan is set at 1.072% and will increase to 1.073% on October 1, 2014 due to the Budget Control Act of 2011.

No credit check is required. If you are not in default on a prior educational loan, do not owe a repayment of federal grant funds, and meet federal aid eligibility requirements, you will be approved to borrow the Direct loan.

No payment is required while you are enrolled at least half-time. Repayment begins six months after graduation or if you drop below half-time status. The standard repayment period is ten years. You can apply for an additional deferment of payments if you enroll in graduate school at least half-time, become unemployed, experience economic hardship, or meet other approved criteria. You can view additional information by visiting www.studentloans.gov.

Federal Perkins Loans

The Federal Perkins Loan Program is a loan option available for students that demonstrate exceptional financial need. If your FAFSA indicates that you so have sufficient financial need, we may offer you a Perkins loan as part of your financial aid package. Available Perkins funds are determined on repayment by prior loan recipients. Because of this, the pool of available Perkins loan funds is limited even in cases of financial need, so not all aid applicants can be offered Perkins loans.

Additional information on the Perkins Loan:

  • Award amounts are tiered at $2,500, $1,500 or $1,000
  • 5.0% fixed interest rate
  • No interest is charged while you are enrolled in college at least half-time or during the nine-month grace period after you leave school.
  • Standard repayment period on the loan is 10 years
Federal Direct PLUS Loan

The Federal Direct PLUS program is a popular financing option for parents of undergraduate students, and graduate students.

  • Borrow any loan amount up to the total cost of attendance determined by University of Delaware, less any awarded financial aid.
  • 7.21% fixed interest rate
  • Origination Fees on Federal Direct PLUS Loan is set at 4.288% and will increase to 4.292% effective October 1, 2014 due to the Budget Control Act of 2011. The origination fee will be deducted from each disbursement.
  • A credit check is conducted when you begin the loan application process.
  • If a parent is denied the loan, an additional unsubsidized loan will be awards to the student's financial aid package. Students with a status of "freshman", or "sophomore", will receive an additional $4,000, while students of "junior", and "senior", status will receive an additional $5,000.
  • Undergraduate students are required to complete the Free Application for Federal Student Aid (FAFSA) in order for their parents to use the Direct PLUS loan program.

Loan Repayment

  • For graduate students repayment begins immediately after you graduate or drop below half-time status and lasts ten years under the standard repayment plan.
  • For parents of undergraduate students repayment begins within 60 days after your loan is fully disbursed and lasts ten years. Parent borrowers may contact the Direct Loan Servicing Center to request deferment of monthly payments while the student is in school.
Frequently Asked Questions
How do I apply for a PLUS Loan?

First, file the Free Application for Federal Student Aid (FAFSA) or renewal FAFSA for the 2012-2013 academic year at www.fafsa.ed.gov. Then complete the 2012-2013 Federal Direct PLUS application on StudentLoans.gov and the information will be forwarded to student Financial Services for verification. To complete the online application, sign in under "Manager My Direct Loan" using your Department of Education's FAFSA PIN to Complete PLUS Request process. You must be the biological (including non-custodial), adoptive or in some cases, the step-parent of the student. Also, you must be a U.S. Citizen or Eligible Non-Citizen (e.g. Permanent Resident) to be eligible for this loan. Borrowers are subject to a credit check to determine credit-worthiness. Parents with an adverse credit history, including being more than 90 days or more past due in the repayment of a debt, or those who defaulted or foreclosed on a loan, or filed bankruptcy in the past may be denied a PLUS loan.

How much can I borrow?

The maximum amount you may borrow for any semester is the difference between the cost of attendance (tuition, fees, room and board, books, etc.) and the financial aid that the student is already receiving for that semester. If you are applying prior to the cost being established for the year (typically in July), and you would like to request that we process the loan for up to cost of attendance then please specify that on the application. We will then process the loan after the rates are set in early July for the difference between the cost of attendance less your financial aid package.

Please note: There is a 4.0% loan origination fee which will be deducted from the amount that you request, i.e. if you request $10,000, the actual amount disbursed to the student will be $9600

What happens next?
  • The information you provided on your application is forwarded electronically to the U.S. Department of Education Direct Loans Servicing Center for approval. Borrowers are subject to a credit check to determine credit-worthiness. Parents with an adverse credit history, including being more than 90 days or more past due in the repayment of a debt, or those who defaulted or foreclosed on a loan, or filed bankruptcy in the past may be denied a PLUS loan.
  • If your loan is denied, you will be notified in writing by Direct Loans with the reason for the denial, and the name of the credit bureau from which the denial was obtained.
  • If your loan is approved, you will be notified in writing by Direct Loans. IMPORTANT: you may have to complete the Electronic Master Promissory Note (MPN) online; refer to "Completing the Master Promissory Note" for instructions on how to complete your MPN. Please note the loan funds will not be disbursed to the student's school account until the MPN is completed.
How will the PLUS loan be disbursed?

Academic year PLUS loans are disbursed into your student's school account in two disbursements, usually at the beginning of each semester. The actual amount disbursed will be the amount you requested minus the origination fee of 4%. The funds are applied to the student's University billing statement. Unless parents request otherwise, credit balances are refunded to the parent borrower instead of the student. Requests for refunds can be made via email to credit-refund@udel.edu. If the student receives additional financial assistance after the PLUS application is certified, one or both of the loan disbursements may be reduced or cancelled to prevent over-awards.

When do I have to begin repaying my loan?

You may choose to defer payments on your PLUS loan until six months after the date the student ceases to be enrolled at least half-time (6 credits). The Direct Loan Service will provide you with the option to pay the interest that accrues on the loan prior to the start of repayment, either monthly or quarterly, or capitalized quarterly. Alternately, you may choose to begin repayment 60 days after the loan is fully disbursed, e.g. 60 days after the Spring 2013 disbursement if your loan is for both fall and spring semesters, or for Spring 2013 only. If you do so, the interest that accrues from the first disbursement to the start of the repayment will be capitalized.

What are my options if I'm denied a PLUS loan?

If your loan is denied due to adverse credit, the Direct Loan Servicing Center will send you documents for you to add an Endorser to your loan. If you choose not to use an Endorser, your student may be eligible to receive additional funds as a Federal Stafford Unsubsidized Loan. The additional Unsubsidized Loan amount available each year is $4000 maximum for first and second year students (up to 59 credits earned) and $5000 for third and fourth year students (60 or more credits earned). Promptly notify Student Financial Services in writing via email to finaid-loan@udel.edu; please include the student name, student id, parent borrower name, additional amount requested for each term as well as your decision to use either an endorser or to request that the student be awarded the provisional unsubsidized loan. You may also file an appeal with the Direct Loan Servicing Center if you are confident there is no basis for you to be denied the loan. They will explain to you what steps you need to take to get an override to the credit decision.

Can I make changes to my loan?

Yes. At any time during the loan period(s) you may request that the loan amount(s) you were approved for be reduced or cancelled. An increase to the original request may require a new loan to be processed for the additional amount only. However, in all these cases your request for a loan change MUST be submitted in writing via email to finaid-loan@udel.edu; please include the student name, student id, parent borrower name, additional amount requested for each term on this communication. (i.e. $2000 Fall; $2000 Spring).

Is there a deadline to submit my application?

Please bear in mind that it is your responsibility to meet all UD bill payment deadlines. Your application must be submitted in sufficient time to allow processing and disbursement of funds. Payment for the Fall semester is due August 1.

What should I do if the loan I applied for is not showing on my semester bill?

If the Direct PLUS loan you applied for is not reflected on your semester bill, from your online bill in My Finances, you may indicate you have an additional pending credit, specify PLUS loan and then deduct the amount. This will allow you to pay a partial or even no payment from your semester bill but you will be considered financially clear for your first billing. Failure to take action from your online bill could result in late or installment penalties. Remember, the amount of your loan that you can deduct from the bill is the amount you requested minus the 4.0% origination fee.

Alternative Loans

Once you have exhausted your Federal availability for Financial Aid, Alternative Loans are another option to fill in the gap between the offered aid and your total Cost of Attendance. Please note that these lenders are for private student loans and are not to be used for Parent PLUS Loans or student Federal Direct Loans (Stafford Loans).

If you are a current student who wishes to find out more information about Alternative Loan Programs, please select the link below. By doing so, you will have access to a list of several alternative loan lenders that are frequently used by our students. Please keep in mind that you are not required to use one of the lenders displayed at the end of the counseling session. These lenders are presented for informational purposes only.

**The lenders which appear on the list presented at the end of this counseling session were chosen based on the lender's ability to receive electronic loan certifications, send Electronic Funds Transfer (EFT), and fee structure. Most loans presented at the end of this counseling session have zero fees for all borrowers. A few of the lenders included in the list may charge fees for borrowers with poorer credit and/or require that some payments be made while in school. Please read all fee and interest rate information carefully before AND after approval.

If the student is a resident of NJ they may be interested in taking an alternative loan through NJ Class. More information can be found at:

  • NJ Class(for NJ residents only and Requires a FAFSA to be filed.)

For more information about Federal Direct Loans please visit their website:

http://www.ed.gov/offices/OSFAP/DirectLoan/index.html

Undergraduate First-time University of Delaware Borrowers
Federal Direct Loans

In order for your Federal Direct Student Loan to disburse to your account, we must have two items on file in the Student Financial Services Office:

Master Promissory Note

Student and Parents who are first-time borrowers under the Federal Direct Loan Program (Direct Loans-Subsidized/Unsubsidized, Direct PLUS Loans, Direct Graduate PLUS Loans) are required to complete and sign a master promissory note (MPN) before their loan proceeds can be released. The MPN is a legally binding agreement to the terms and conditions of the loan. By signing it you are promising to repay your loan. It is a good idea to save a copy for your records.

Entrance Counseling

First time Federal Direct Student Loan (Subsidized/Unsubsidized and/or Graduate PLUS) borrowers at the University of Delaware must complete the online Loan Entrance Counseling and Quiz before loan funds can be disbursed. Completion of the Loan Entrance Counseling and Quiz is a federal requirement that discusses your rights and responsibilities as a Federal Direct Student Loan borrower.

Federal Perkins Loan

In order for your Federal Perkins Loan to disburse to your account, we must have a signed Master Promissory Note on file in the Student Financial Services Office:

Complete the Master Promissory Note

Graduate First-time University of Delaware Borrowers

Federal Direct Loans

In order for your Federal Direct Student Loan to disburse to your account, we must have two items on file in the Student Financial Services Office:

Master Promissory Note

Student who are first-time borrowers under the Federal Direct Loan Program are required to complete and sign a master promissory note (MPN) before their loan proceeds can be released. The MPN is a legally binding agreement to the terms and conditions of the loan. By signing it you are promising to repay your loan. It is a good idea to save a copy for your records.

Entrance Counseling

First time Federal Direct Student Loan borrowers at the University of Delaware must complete the online Loan Entrance Counseling and Quiz before loan funds can be disbursed. Completion of the Loan Entrance Counseling and Quiz is a federal requirement that discusses your rights and responsibilities as a Federal Direct Student Loan borrower.

Loan Repayment

Repaying educational loans can be a significant challenge, and how you handle your repayment can greatly impact your credit rating. Just as responsible repayment habits can help you to build excellent credit, defaulting on student loans can make it very difficult to make major purchases such as a car or home. For these reasons, we urge you to take your student loan repayment responsibilities seriously.

Loan Consolidation

Consolidation allows you to pay off some or all of your existing student loans by combining them into a single, large loan. Loan consolidation may lower your total monthly repayment amount. However, any consolidation loan is also likely to significantly increase the total amount of interest that you will be required to pay. You may also lose any remaining grace period on your consolidated loans. We recommend doing some homework to determine if consolidation would be the most beneficial option to you.

When might it be useful for me to look into loan consolidation?
If your current monthly loan payments are not manageable, if you have multiple educational loan payments monthly, or if you have variable interest rate loans, it may be worth looking into loan consolidation.

What are the benefits of loan consolidation?
Loan consolidation offers several advantages in the repayment process. If you have multiple loan payments each month, loan consolidation offers one lender and one monthly payment. Borrowers have flexible repayment options, possibly reduced monthly payments, and varied deferment options. Also, there is no minimum or maximum amount required for consolidation, and the process is free.

Am I eligible?
To qualify for Direct Consolidation, borrowers must have at least one Direct Loan, or Federal Family Education Loan (FFEL), that is in grace, repayment, deferment or default status. Loans that are in an "in-school" status may not be able to be included in loan consolidation. If you do not qualify for Direct Loan consolidation, you still may be eligible for private loan consolidation. We recommend you start by speaking with Borrower Services to determine your eligibility in Direct Loan consolidation. They can guide you towards private loan consolidation if necessary.

How do I apply?
There are several ways that you can apply for a Direct Consolidation Loan:

Online Web Application - Apply online, and visit the Application and Promissory Note Home Page.

Express Phone Application - 1-800-557-7392. Apply over the phone if you have all Direct Loans.

Paper Application

  • Download a paper copy of the application and promissory note - including the complete contents of the application package.
  •  
  • OR
  •  
  • Request an application package be mailed to you:
  • Phone at 1-800-557-7392 8AM to 8PM (EST)
  • (TDD 1-800-557-7395) or (334) 206-7400 outside USA
  • E-mail at loan_consolidation@mail.eds.com

For additional information, feel free to contact Borrower Services at 800-557-7392. You can also visit their website directly by clicking here.

Exit Counseling

Prior to graduating, leaving the university, or dropping below half-time, federal loan borrowers are required to complete a mandatory exit counseling session. Exit interviews are mandatory because it is a federal law and a condition of receiving a federally funded student loan.

An exit interview is a mandatory loan counseling session that provides loan repayment, grace period, billing options information, and collects updated borrower information as required by the federal government. Prior to graduating, leaving the university, or dropping below half-time, federal loan borrowers are required to complete a mandatory exit counseling session. These online exit-counseling sessions provides a borrower their rights and responsibilities as a Federal Loan Recipient. Exit interviews are mandatory because it is a federal law and a condition of receiving a federally funded student loan.

Direct Loan Exit Counseling (Subsidized and Unsubsidized)

What information do I need to complete Exit Counseling?
At the end of the exit counseling session, you will be asked for information that will be included as part of your loan records. This includes names, addresses and phone number for your next of kin, two references who live in the United States, and your future employer (if known). You will also need your driver's license number. Having this information with you when you start will make your exit counseling session go more quickly and smoothly.

Where do I complete Exit Counseling?
You can complete Exit Counseling at www.studentloans.gov.

What happens if I do not complete Exit Counseling?
A hold may be placed on your records and transcripts for failure to complete your exit requirement.

Do I have to complete Exit Counseling if I receive my undergraduate degree and I am continuing my education pursuing a graduate degree?
Yes, students transitioning from an undergraduate program to a graduate program are also required to complete exit counseling.

Federal Perkins Loan Exit Counseling

When do I complete Federal Perkins Loan Counseling?
University of Delaware students that received Federal Perkins Loan will have their loans serviced by University Accounting Services (UAS). Students will receive an email noticed directly from University Accounting Service (uasloanservice@uasecho.com), which will direct you to log onto the student Loan Exit Counseling Website to complete the Federal Perkins Student Loan exit counseling. PLEASE NOTE: do not sign-on to UAS until after you have received this initial email.

What information do I need to complete Exit Counseling?
Students are required to provide names, addresses, and telephone for a next-of-kin, two personal references at different addresses, and future employer if known. The collection of this data is a federal requirement and all information provided will remain confidential.

Do I have to complete Exit Counseling if I received my undergraduate degree and I am continuing my education pursuing a graduate degree?
Yes, students transitioning from an undergraduate program to a graduate program are also required to complete exit counseling.

What happens if I do not complete Perkins Loan Exit Counseling?
A hold will be placed on your records and transcripts for failure to complete your exit requirement.