Borrowing to Pay for College

A college education is an investment. As students and parents explore academic options, many also look to borrowing as a way to finance college costs over more than four years. Borrowing is a common practice, and ensures you will have the tools necessary to earn a degree. Many loan options are available.

NEED-BASED LOANS

Students must file the FAFSA to be considered for these loans.

• (Click here) Federal Stafford Student Loan (subsidized): Moderate interest loans awarded directly to students. Freshmen may borrow up to $3,500 annually, sophomores up to $4,500 annually, and juniors and seniors up to $5,500 annually. These loans are federally guaranteed and no interest accrues, nor is any payment due, until six months after the student ceases to be at least a half-time student. The interest rate is a fixed 6.0 percent for undergraduate subsidized loans. The interest rate is a fixed 6.8 percent for graduate subsidized loans.
• Federal Perkins Loan: Federal funds managed by the university are awarded to students demonstrating high need. No interest accrues and no payment is due while the student is enrolled at least half-time. Repayment begins nine months after the student ceases to be at least a half-time student. Amounts vary from $400 to $3,000.

• (Click here) Federal Stafford Student Loan (unsubsidized): Available to all students regardless of need. Loan amounts are the same as for the need-based subsidized program. However, under this program borrowers do not qualify for federal interest subsidy payments. Thus interest accrues while the student is in school. Repayment of principal begins six months after the student is no longer enrolled half-time. The interest rate is a fixed 6.8 percent.
• (Click here) Federal Parent Loan for Undergraduate Students (PLUS): Parents may borrow up to the cost of education, less any other aid, per academic year for each dependent enrolled at least half-time. Interest rate is a fixed 8.5 percent. Payment of PLUS Loans is NOT deferred while the student is enrolled in school but begins 60 days after the final loan disbursement for the academic year for which the loan was made.
• (Click here) Graduate PLUS Loan : For graduate students who need financial assistance beyond the $20,500 Stafford Loan maximum, there is the federal Graduate PLUS Loan program. The Graduate PLUS Loan allows for the deferment of repayment while the student is enrolled in school. The Graduate PLUS Loan carries a fixed 8.5 percent interest rate. The maximum amount a student may borrow from the Graduate PLUS Loan program is Elon’s cost of attendance less any Stafford Loans and other forms of financial aid a student may be receiving.
• (Click here) Private Alternative Loan Programs: Elon participates in a number of other private and state-funded loan programs. In general, these programs allow for extended repayment terms. Unlike the federal PLUS Loan program, one of the primary advantages of alternative loans is the ability to defer repayment of principal (and sometimes interest) while the student is enrolled in school. Alternative lenders are free to set their own repayment terms, interest rates, guarantee fees, etc. It is wise to compare several lenders to discover which ones are best suited to you. Alternative lenders often have fee and interest rate structures that are competitive with the federal loan programs.