The Federal Stafford Student Loan Program enables students who are enrolled at least half-time (two units) to borrow from eligible lenders at a low interest rate to help meet educational expenses. The Federal Stafford Loan may be subsidized or unsubsidized. Eligibility for the interest subsidy is determined by a federal needs formula based upon the information the student and her parents provide on the Free Application for Federal Student Aid (FAFSA). For a student who qualifies for the interest subsidy, the federal government pays the interest until repayment begins. If a student does not qualify for the interest subsidy, she may borrow under the unsubsidized program and will be responsible for paying the interest from the time the loan is disbursed until it is paid in full. Under both programs, the principal is deferred as long as the student is enrolled at least half-time.
First-time borrowers are encouraged to secure loans through lenders that participate in the Pennsylvania Higher Education Assistance Agency (PHEAA) Keystone Best Program. A dependent undergraduate student may borrow from $2,625 up to $5,500 per year, depending on her year in college and her financial eligibility. Repayment begins six months after the student is no longer enrolled at least half-time at an accredited institution. The interest rate is variable but will not exceed 8.25 percent. For July 1, 2004 to June 30, 2005, the interest rate is 3.37 percent during repayment. Interest rates are adjusted each year on July 1. More information about the Federal Stafford Loan Program is available from the financial aid office.
The Perkins Loan Program is administered by the College from allocated federal funds. Eligibility for a Perkins Loan is determined through a federal needs test. The 5 percent interest rate and repayment of the loan begin nine months after graduation, withdrawal from the College or dropping below half-time status. No interest accrues on the loan until repayment begins. Cancellation and deferment of loan payments are possible under certain circumstances, which are detailed in the loan promissory note. Awards range from $500 to $4,000 per year and are based on financial eligibility.
The Federal PLUS Loan (Parent Loan for Undergraduate Students) is a federally subsidized loan program designed to help parents provide funds for the parental contribution. Parents must pass a credit check. Generally, repayment begins 60 days after the loan funds are disbursed. Some lenders offer forbearance options. The interest rate is variable, but does not exceed 9 percent. For July 1, 2004 to June 30, 2005, the interest rate for PLUS Loans in repayment is 4.17 percent.