Loans are borrowed funds that must be repaid, usually with interest.
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 |
Repayment of Federal Direct Student Loans begins six months from the date of graduation, full withdrawal or enrollment less than half-time. This is called a grace period. During this period, the Office of Financial Aid will send you repayment information from your loan servicer, and you’ll be notified of your first payment due date.
Create an online account with your loan servicer to check your balance, make payments, and much more.
New students and first-time borrowers of Direct Student Loans are required to complete entrance counseling in order to receive the loan funds. The Office of Financial Aid notifies students of this requirement by sending an email to their Champlain email account.
The online entrance counseling can be completed at studentaid.gov.
All federal student loans obtained by a student or parent are required to be reported to, and tracked on, the National Student Loan Data System (NSLDS). NSLDS loan records are accessible to all authorized NSLDS users, including schools, student loan guaranty agencies, lenders, federal agencies and other authorized users.
Champlain College offers students a wealth of information on financial literacy, including management of student loans, through our InSight Program.
Students intending to use a federal education loan must complete a Master Promissory Note (MPN). This legal contract explains the terms and conditions of your loan, and by signing it, you promise to repay your loan(s) and any accrued interest and fees to the U.S. Department of Education.
Your MPN is valid for a period of up to 10 years, and multiple loans can be authorized under an MPN during your time at Champlain College.
All Direct Student Loan borrowers who graduate, drop below half-time or end enrollment are required to complete exit counseling. When a student graduates, drops below half-time enrollment or withdraws, an exit counseling packet is mailed to the student.
Students with federal education loans must be enrolled at least half-time to receive loan funds and to continue to qualify for in-school loan deferment. For financial aid purposes, half-time enrollment for undergraduate students is six credits per semester. Half-time enrollment for graduate students is three credits per semester.
Students may access their federal loan records at the National Student Loan Data System (NSLDS).
The online exit counseling can be completed at studentaid.gov.
A loan servicer is a company assigned to handle the billing and other services on your federal student loan. This company will work with you regarding repayment options and other responsibilities related to your federal student loans.
After graduation, it is important that you make payments based on the schedule established with your loan servicer. Ensure your contact information is up to date , and if your circumstances change at any time during your repayment period, your loan servicer will be able to help.