There are some fundamental differences between federal loans and loans available from private lenders. Below is a basic overview to help you begin to navigate your loan options.
Through the Federal Direct Loan Program, borrowers receive federal loan funds directly from the U.S. Department of Education. There are two types of Federal Direct Loans:
Subsidized: The federal government pays the interest on this loan while the student is enrolled at least half-time or during times of authorized deferment. Direct Subsidized Loans are awarded to undergraduate students based on financial need and grade level.
Unsubsidized: Students are responsible for paying the interest that accumulates after the loan has disbursed. The interest can be paid while in school or the accrued interest will be capitalized (added to the principal balance). Unsubsidized Stafford Loans are awarded based on grade level and financial need is not considered.
Important points to note:
New Direct Loan borrowers at Champlain College must complete a Master Promissory Note (MPN) and Entrance Counseling online at studentaid.gov.
The Federal Direct Parent PLUS Loan program provides a borrowing option for parents of dependent undergraduate students to help finance their student’s education. The maximum amount a parent can borrow is the cost of attendance less other sources of financial aid.
Important points to note:
Parents denied a Federal Direct Parent PLUS Loan will be offered the option to appeal or apply with a credit-approved endorser.
The Federal Direct Graduate PLUS Loan program provides a borrowing option for graduate students to help finance their education. The maximum amount a graduate student can borrow is the cost of attendance minus other sources of financial aid. The graduate student’s award letter will indicate the maximum amount eligible. This amount can be reduced or declined; no student is required to borrow a Federal Direct Graduate PLUS Loan.
Students intending to borrow a Graduate PLUS Loan will need to complete Graduate PLUS Application as well as the Graduate Plus Master Promissory Note (MPN)online at studentaid.gov. In subsequent years, only the Graduate PLUS Application will need to be completed. The MPN is valid for 10 years after a loan has been issued from it.
Important points to note:
Students denied a Federal Direct Graduate PLUS Loan will be offered the option to appeal or apply with a credit-approved endorser.
Private loans are non-federal, credit-based education loans borrowed from a private lending institution that must be repaid. The loans are typically issued in the student’s name with a required cosigner. The maximum amount a student may borrow is the cost of attendance minus any other financial aid or the maximum limit established by the lender.
Families are encouraged to fully explore federal loan options, (e.g. Direct Subsidized, Direct Unsubsidized and Direct Parent PLUS Loans), before securing a private loan due to the benefits and consistencies that the federal loan programs provide. Funds are posted to the student’s account each semester following enrollment verification, which generally occurs after the second week of the semester.
Selecting a private education loan and lender is a personal decision. The Office of Financial Aid strongly recommends researching private education loans and lenders before completing a loan application online or signing any loan paperwork. Research should include: a comparison of interest rates, fees, repayment terms, and the level of customer service provided by the lender.
Federal Direct Student Loans | Federal Direct PLUS Loans | Private Education Loans | |
---|---|---|---|
Student Level | Undergraduate | Undergraduate or graduate | Undergraduate or graduate |
Borrower | Student | Parent of a dependent undergraduate student or graduate student |
Student or parent (varies by lender) |
Lender | Federal government | Federal government | Private lenders and financial institutions |
Annual Loan Limits | Cost of attendance minus other student aid | Cost of attendance minus other student aid | Cost of attendance minus other student aid |
Eligibility | Open to U.S. citizens or eligible non-citizens | Open to U.S. citizens or eligible non-citizens | Open to anyone |
FAFSA Requirement | Required | Required | Not required |
Type of Interest |
Fixed | Fixed | Varies by lender |
Repayment |
Begins 6 months after graduation or ending enrollment |
Begins after the loan is fully disbursed; deferment options are available |
Varies by lender |
Repayment Penalty | No prepayment penalty | No prepayment penalty | Varies by lender |
Champlain College offers a variety of merit-based and need-based scholarships to help students cover the cost of tuition.
When it comes to covering your educational expenses, grants are great. Typically, they do not need to be paid back, which means they're basically free money!
There are some fundamental differences between federal loans and loans available from private lenders. Below is a basic overview to help you begin to navigate your loan options.
Federal Work-Study Program is an employment program funded by the federal government and Champlain College that allows students to earn money to help with the costs of attending Champlain.