St. Cloud State University

Low-interest student loans are the most common form of financial aid to help finance your education. Student loans are a good investment in your education; however, students should be good consumers when it comes to borrowing. Borrowing should be limited to necessary school related expenses.

All student loans are funds that you need to repay and include Federal, State, or Alternative loan options. Most loans do not need to be repaid until after you graduate, withdraw, or are enrolled less than half-time (6 credits); however, some require the borrower to pay interest on the loan while in school. Most loans have fees and all charge interest to the borrower while in repayment.

Eligibility, loan amounts, and conditions of repayment vary among the different loan programs so be sure to carefully read the loan information before you decide to borrow. Estimate your loan repayment amounts at: http://www.finaid.org/calculators/loanpayments.phtml.

Previous student borrowers under the federal loan programs may view their loan records on the National Student Loan Data System (NSLDS) at http://www.nslds.ed.gov. The NSLDS site includes a list of all of your federal loans, not just loans while attending St. Cloud State University.  You must have a federal PIN to review this information. If you do not have a PIN you may obtain one at www.pin.ed.gov. Choose “Apply for a PIN.”

If a student is offered a student loan as part of the financial aid package, before the loan funds can be disbursed the student must:

1. accept and apply for the loan,
2. complete and sign a Master Promissory Note, and
3. complete loan entrance counseling (if a first-time borrower).

Federal Loans

The federal loan program requires students and parents (for dependent students) to apply for financial aid with the FAFSA. Students must be enrolled at least half-time (6 credits) to qualify for federal loans. There are three types of federal loans: Perkins, Stafford (subsidized and unsubsidized), and PLUS.

Federal Perkins Loan

Funding for this loan program is limited so it is important to apply early for financial aid to determine your eligibility for the Perkins Loan. There are many positive features of the need-based Perkins Loan.

• No processing or origination fees.
• Fixed interest rate of 5%.
• The federal government pays the interest while you are enrolled at least half-time (6 credits) and during the grace period.
• Repayment begins 9 months after you graduate, withdraw, or enroll less than half-time. Interest begins to accrue after the 9 month grace period.
• Borrowers have up to 10 years to repay and under certain conditions there are loan cancellation benefits.

If you accept the Perkins Loan and you are a first-time Perkins borrower, the SCSU Business Services Office will send you a master promissory note (valid for the next ten years) and a Rights and Responsibilities information sheet to complete the application process. If you are a renewing Perkins borrower you will only receive the Rights and Responsibilities information sheet. Once students are no longer enrolled in school at least half-time (6 credits), they are required to complete loan exit counseling.

Questions about the your Perkins Loan, including deferment, forbearance, or cancellation may be directed to:

Minnesota State Colleges & Universities
Student Loan Service Center, Wells Fargo Place
30 7th St. E., Suite 350
St Paul, MN 55101-7804
Tel: 651-917-4700 or Fax: 651-917-4711
Website: www.slsc.mnscu.edu
Email: loans@csu.mnscu.edu

Federal Stafford Loan

The Stafford Loan is a guaranteed student loan, which may be subsidized, unsubsidized, or both. Students select a lender, most commonly from a school's lender list; however, students may choose any lender they desire to process their Stafford loan. The lender and a guarantee agency may deduct an origination fee and a default aversion fee from the loan prior to disbursement.

• If you have already been notified of your on-line financial aid award letter, you may apply for your Stafford loan.  We will verify your loan eligibility based on financial need and your enrollment status.
• If you have not yet applied for financial aid, please complete the two step application process: 1) Free Application for Federal Student Aid (FAFSA) and 2) SCSU Application for Financial Aid, including federal income tax returns and W-2 forms for both student and parent (for dependent students).

Interest rates, loan maximums, and deferment options for the subsidized and unsubsidized Stafford Loan are the same. Independent students have higher loan limits under the unsubsidized Stafford Loan. Through June 30, 2008 the Stafford Loan is a fixed interest rate of 6.8%. Effective July 1, 2008 the fixed interest rates will be 6.0% for the subsidized Stafford Loan and 6.8% for the unsubsidized Stafford Loan.

The Subsidized Federal Stafford Loan is a need-based loan. The federal government pays the interest on the subsidized Stafford Loan while you are in school at least half-time (6 credits) and during the 6 month grace period. You can borrow up to your financial need as determined by the federal financial aid formula or up to the program maximum, whichever is less.

The Unsubsidized Federal Stafford Loan is the same as the subsidized Stafford Loan, except the federal government does not pay the interest while you are enrolled. You are responsible for paying all of the interest that accrues on this loan during the in-school period, the grace period, and periods of repayment or deferment. The interest may either be paid periodically or capitalized and added to the principal amount of the loan.

Stafford Loan Limits (effective July 1, 2008)

Stafford Loan Maximum Aggregate Limits (effective July 1, 2008)

• Dependent Undergraduate: $31,000 (only $23,000 can be subsidized)
• Independent Undergraduate: $57,500 (only $23,000 can be subsidized)
• Graduate and Professional Students: $138,500 (only $65,500 can be subsidized)

These maximums are specified by federal law. Federal regulations also stipulate that a student cannot receive financial aid in excess of the cost of attendance. Therefore, some students are not able to borrow the full amounts listed.

Loan Counseling: All borrowers under the Stafford are required to complete entrance and exit loan counseling.

• If you have not previously borrowed under the Stafford Loan program, federal regulations require that you complete loan entrance counseling before the first loan disbursement can be made.
• If you graduate, withdraw, or enroll less than half-time (6 credits), federal regulations require that you complete loan exit counseling. The exit counseling will help you understand your loan repayment terms and options.

Loan Pro-ration: Students graduating within the academic year and attending less than a full academic year are required by federal law to have their Stafford Loan amount prorated. Example: A senior graduating after fall semester cannot receive more than $2,750 (one-half of the annual $5,500) in a subsidized Stafford loan.

Stafford Loan Repayment: Repayment begins 6 months after you graduate, withdraw, or enroll less than half-time (6 credits). Minimum monthly payments of $50 are made to the lender and may increase depending on the total amount borrowed.

Sometimes there are personal situations that make it difficult for students to repay their student loan. In such cases, you may be eligible for a loan deferment that allows you to postpone payment of principal for a specific period of time. To arrange a deferment, contact your lender regarding eligibility and deferment forms. Additional information on loan repayment may be found at Federal Student Aid (http://studentaid.ed.gov/PORTALSWebApp/students/english/index.jsp).

Federal PLUS Loan

If you are a dependent student for financial aid purposes, the PLUS Loan enables your parent(s) to borrow funds to assist you with education-related expenses. The PLUS Loan is not based on need meaning it does not depend on family income or assets.

Parents select a lender, most commonly from a school's lender list; however, parents may chose any lender they wish. The school verifies the parent's loan eligibility based on the cost of attendance, any other financial aid the student has, and the student's enrollment status. The maximum loan amount a parent may borrow is the cost of attendance less any other financial aid the student receives. The PLUS Loan has a fixed interest rate of 8.50%.

A credit check is required for the PLUS Loan. If you would like to find out if you are pre-approved for the PLUS Loan you may use either of the guarantee agencies - EAC or Great Lakes - for an on-line pre-approval. If a parent is denied a PLUS Loan the student may be eligible for additional unsubsidized Stafford Loan. Please contact our office for more information.

If a student has already received notification of his/her on-line financial aid award letter, the parent may apply for a PLUS loan.  We will verify the PLUS loan eligibility based on the student's enrollment status.

If you have not yet applied for financial aid, please complete the two step application process: 1) Free Application for Federal Student Aid (FAFSA) and 2) SCSU Application for Financial Aid, including federal income tax returns and W-2 forms for both student and parent (for dependent students).

Graduate/professional students are also allowed to borrow under the PLUS loan. Federal regulations stipulate that a student cannot receive financial aid in excess of the cost of attendance. Therefore, many SCSU graduate students may not be eligible to borrow additional funds under the PLUS loan program as their total eligibility would have been met under other student loan programs.

Minnesota Student Educational Loan Fund (SELF) Loan

The SELF Loan assists students, both undergraduate and graduate, who have limited access to other financial aid programs. Students must seek other sources of federal, state, institutional, or private aid for which they might be eligible before they may apply for a SELF Loan. This is most commonly done through applying for financial aid with the FAFSA. The minimum loan amount is $500; maximum loan amounts are determined by grade level.

Some parents may prefer to borrow on behalf of their dependent son/daughter through the federal PLUS loan (please see previous section) or graduate students may prefer another loan option. SELF loan eligibility may be converted into PLUS loan eligibility in certain circumstances; contact the Financial Aid Office should you have questions about this option.

SELF Loans are obtained through the state lending agency operated by the Minnesota Office of Higher Education.

• All SELF loan borrowers are required to provide a creditworthy co-signer.
• You may apply on-line at: www.selfloan.org. Both you and your creditworthy co-signer will need to create a user name and password if you have not done so previously. Effective April 6, 2008 applicants may use an electronic signature to sign the loan.
• The SELF loan has a variable interest rate, based on the LIBOR rate, which is subject to change every three months. The interest rate is 5.8% for July 1, 2008 through September 30, 2008, a decrease from the previous quarter.
• Students must pay quarterly interest payments while in school. After leaving school or dropping below half-time enrollment, interest is paid on a monthly basis for one year. On the 13th month following the date you leave school, you begin paying on both principal and interest.
• There are no grace periods or deferments under this loan program.

SELF Loan Limits:

* includes undergraduate SELF debt

Students who advance a grade level in the middle of an academic year may borrow at that new grade level as long as the cumulative SELF loan debt maximum for that new grade level is not exceeded.

Alternative Loans

Most banks provide educational loan options commonly referred to as Alternative Loans. These loans generally have higher costs (interest and origination fees) and should only be considered as a final borrowing option. Alternative loans are not need-based and do not require the student to go through the financial aid application process.

Alternative loans are usually taken out for specific situations not covered by federal or state loans such as when students:

1. attend less than half-time (6 credits),
2. are not making Satisfactory Academic Progress,
3. take courses that do not lead to a degree or certificate, or
4. have additional program costs such as aviation or some study abroad programs.

Find out more about Alternative Loans by reviewing a list of some lenders that offer alternative loans. Please note that should you decide to borrow under the alternative loan program, you may select any lender of your choosing and are not required to select one from this list of lenders.

Bessie E. Campbell Short-Term Loan Program

The Bessie E. Campbell Short-Term Loan Program is available to provide short-term financial assistance to SCSU students, who have unexpected educationally related expenses. Allowable educational expenses include tuition, fees, books, supplies, room, board, and transportation.

Students must be enrolled for at least 6 credits. Current students must be in good academic standing (1.50 GPA or greater after 1 semester, 2.00 GPA after 2 or more semesters). The GPA requirement does not apply to first-term students. If a student wishes to borrow funds during semester break, the student must be pre-registered for the following semester.

There is an origination/processing fee for all loans - $10 processing fee for loans up to $400 and $20 processing fee for loans up to $600. The maximum loan period is 60 days. Any loan not paid by the due date will be subject to a $30 late fee.

Applications are available in the Office of Scholarships and Financial Aid, AS106. Funds are disbursed and repayment is managed by the SCSU Business Office.

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