Other Financing Options
As you and your family discuss how to pay for college, the amount that will be financed (i.e., paid over an extended period of time) is a very important issue. No single option is the right one for everyone; each family’s financial circumstances will determine which financing strategy is best for their individual needs.As you research your options, please keep in mind that financing typically occurs on a yearly basis (to cover both fall and spring semesters), and whichever option you choose this year can be changed in future years. Listed below are several options you may want to consider when researching which is best for you.
- PLUS loans
- Private educational loans
Federal William D. Ford Direct PLUS Loan
Through the PLUS loan program, your parents may borrow up to the total cost of education minus other financial aid assistance. Some highlights of the loan include:
- The interest rate is fixed at 7.9 percent, as of July 1, 2006.
- Interest begins to accumulate on the date of the first loan disbursement.
- A 4 percent origination fee is deducted from each disbursement.
- Repayment begins after the loan is fully disbursed, with the first payment due within 60 days after the final loan disbursement.
- As of July 1, 2008, parent borrowers may choose to defer payments on a Parent PLUS loan until six months after the date you cease to be enrolled at least half time. They can pay accruing interest either monthly or quarterly, or have it capitalized quarterly. To request this deferment, complete a “PLUS Loan, Student in School Deferment” form online on the Federal Student Loan Servicing website.
If your parents would like to apply for a Federal Direct Parent PLUS Loan, they can do so online. When determining the loan amount, consider the amount needed for the academic year. The loan will then be equally disbursed between fall and spring semesters. Note: The application process for the 2013-14 academic year is not available until May 1, 2013.
Master Promissory Note
The Master Promissory Note (MPN) is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the department, and it can also be completed online. It explains the terms and conditions of your loan(s) as well. You’ll need to complete the MPN if you’re a first-time PLUS loan borrower. If you have a PLUS loan for more than one student, you’ll need to complete a separate MPN for each student.
Private Educational Student Loans
Private educational loan programs have grown in popularity in recent years. However, we firmly believe that you should exhaust your eligibility for federal loan programs before turning to this resource. Federal student loans may provide you with more beneficial terms and conditions, including a lower annual percentage rate charged on the principal and lower fees.
Choosing a lender
You’re free to choose any lender that best serves your needs. St. Norbert College does not endorse or promote any specific educational loan lender or lending program. We adhere to a Student Loan Code of Conduct as required by the Higher Educational Opportunity Act.
As a guide for comparing loans, we provide a list on FASTChoice, a loan-comparison tool that can assist you in selecting a loan that best serves your needs.
We selected these lenders to be on the FASTChoice lender list because:
- They offer competitive borrower rates, terms and incentives.
- We’ve seen a history of exceptional customer service for the borrowers and staff of the college.
- They offer timely processing of loans.
- They have an online loan application process for students.
- Funds are sent electronically (EFT) when possible.
- They have good overall approval ratings.
Processing information
If you choose to obtain a private educational loan, we highly recommend borrowing to cover all semesters of enrollment (for the academic year) rather than borrowing individually each semester. Interest begins to accrue once the loan is disbursed to the school. Therefore, if you apply for a loan for the full year, you will not start accruing interest on the portion of your loan that is not yet disbursed to the school. Applying for one loan will also avoid multiple inquiries into your credit.
Allow 3-4 weeks for processing, loan certification and receipt of funds. Please plan accordingly to avoid late fees being charged to your student bill.