Loan Information

Student loans are available through the Federal Direct Loan Program and alternative student loan lenders. Most Clarkson graduate students will take federal student loans before considering alternative loans. Although some alternative lenders advertise low variable interest rates, other considerations such as repayment options, deferment and possible cancellation benefits, interest rates and consolidation options should be included in making loan decisions.

Due to ongoing federal budget negotiations in Congress, federal regulations pertaining to the Direct Loan Program are subject to change. The information herein is accurate as of November 23, 2011.

Students who are eligible for federal student loans, decline them, and choose to borrow an alternative loan are required to complete loan counseling with a Financial Aid Administrator and sign a “Statement of Denial of Federal Loans” before the Financial Aid Office will certify an alternative loan.

You should always exhaust all of your scholarship, assistantships and federal student loan options before borrowing an alternative loan.

Below are some comparisons to assist you in deciding which loan is best for you:

Federal Direct Graduate PLUS Loan vs. Private Loan

	Federal Direct Graduate PLUS Loan	Private Loan (terms vary by lender)
Interest Rates	Fixed interest rate at 7.9% while in school & repayment.	Variable interest rate based on the lender, usually based on a LIBOR or Prime plus a credit margin. Some lenders now offer fixed interest rate loans.
Fees	4.0% origination fees	Depending on lender and credit, could have 0-9% origination fees. Many lenders offer 0% origination fee.
Credit Requirements	Credit check required. Approval determined by federal criteria and does not include debt to income ratio. Most students are approved without a co-signer (endorser).	Credit check required. Approval determined by lender criteria based on credit score and credit history.
Repayment Terms	10-year repayment, or up to 25 years if Federal Direct Stafford and Graduate PLUS exceed $30,000. No payments while in-school.	Depending on lender, 15-25 years. Most lenders offer no payment option while in-school.
Grace Period	Students are not required to make payments for 6 months after leaving school. Check with loan servicer for requirements.	Most lenders offer 6 to 9 months grace period after enrollment ends.
Federal Loan Consolidation	Can be consolidated with other federal educational loans (i.e., Perkins and Stafford) or to extend repayment period.	Private Loan Consolidation available with very few lenders.
Deferment Options	Unlimited half time student deferment, 3 yr unemployment and hardship, and forbearance. Some military.	Very limited options. Varies by lender, some charge a fee to apply.
Discharge Options	Federal government will discharge the loan if permanent disability or death of student.	A few lenders now will discharge loans because of permanent disability or death. Check with lender.
Borrower Benefits	.25% interest rate reduction for Electronic Debit Account Repayment	Borrower Benefits often offered to reduce interest rates.
Annual Loan Limit	Students may borrow up to the cost of education less other aid received.	Students may borrow up to the cost of education less other aid received.
Aggregate Loan Limit	None	Yes, depending on lender

PLUS: You may prefer the Federal Direct Graduate PLUS loan for the following reasons:

The loan has a fixed rate.
If your credit is considered poor, you are more likely to be approved for the federal loan.
There are more deferment and forbearance options which allow you to postpone payments temporarily after you enter repayment.
Public Service Loan Forgiveness after 10 year repayment an option for certain employment.

Private: You may prefer the Private Loan for the following reasons:

The interest rate is variable and could initially be lower than federal rates.
Most lenders offer no origination fee loans if you have good credit.

All student loans are based on the cost of attendance as set by the academic department and the Office of Financial Aid, less any University awards or external aid. The cost of attendance includes the direct cost of tuition, books, and fees as well as indirect costs such as a modest living allowance, transportation and personal expenses. Students who are doing distant Clinical Studies or a Global Program or have additional educational expenses, such as a computer purchase or other special situations may submit an appeal for an adjustment to their cost of attendance based upon documented additional costs.

Federal Student Loans
Federal Direct Student Loans are available to students who are US Citizens or Permanent Residents. Students must be enrolled at least half-time in an eligible program and meet standards of satisfactory academic progress. Students must file a Free Application for Federal Student Aid (FAFSA) on a yearly basis.

We are required to disburse the loans equally over the enrollment period. In most cases, this means fall and spring loan credits would be equal, even if charges are not.

Subsidized – Subsidized loans for Graduate students will not be available for loan periods starting July 1, 2012 on, due to Congressional action. The federal government used to pay the interest on the loan while a student was enrolled in school at least half-time and during the grace period.

Unsubsidized – An unsubsidized loan is not based on financial need. Interest must be paid on a monthly/quarterly basis or be capitalized (added to the principal loan amount). Payments on both the interest and principal begins six months after the student graduates, leaves school or drops below half-time enrollment.

Graduate PLUS Loan – A Graduate PLUS Loan is an unsubsidized loan that is not based on need. The amount a student may borrow is the cost of attendance minus all other aid. Applicants are subject to a credit check. Interest must be paid on a monthly/quarterly basis or be capitalized (added to the principal loan amount). Payments on both the interest and principal begins six months after the student graduates, leaves school or drops below half-time enrollment.

Comparison of the graduate student Federal Loan programs. Federal loans are eligible for the Federal Loan Consolidation program.

	Unsubsidized	GradPlus
Grace period	6 months	6 month deferment (not grace)
Origination fee	1.0%	4.0%
Loan Amount Limit	$20,500/year	Cost of attendance less other aid
Interest rate	6.8% fixed	7.9% fixed
Interest begins	From disbursement	From disbursement
Credit test	Can’t be in default on Title IV aid	Also subject to a “soft” credit check.

Repayment of Federal Student Loans will not be required until six months after a student ceases to be enrolled at least half-time. Graduate PLUS borrowers may need to contact their servicer to request an in-school and six month post enrollment deferment. Borrowers may make payments of interest or principal earlier, without penalty. Borrowers will be able to choose from several repayment plans, and may be eligible for various deferment options. The standard repayment period is ten years.

Clarkson is processing loans under the Borrower Based Aid Year for students who start their graduate program other than a fall term. For example, students entering the PA program in the Spring of 2012 will have a Spring/Summer loan period. Their next loan period would be Fall/Spring. Other programs that may fall under the BBAY include the DPT program.

Graduate Federal Loan Steps

Visit the websites below for additional information on the Federal Student Loan Program:

www.studentloans.gov
www.direct.ed.gov/student.html
http://studentaid.ed.gov