Loans and Payment Plans
Direct Student Loan Program | Loan Limits | Direct Parent PLUS Loan Program | Perkins Loan | Payment Plans
- Determine your borrowing needs for the entire academic year before beginning the application process.
- Exhaust Federal Direct Loan eligibility before borrowing Federal Direct PLUS Loans; the terms and conditions are more favorable.
- Loans must be applied for each academic year.
- Loans can only be processed by the University in the academic year or semester for which they are intended.
- Loans that have been approved and certified by the Financial Aid Office will be disbursed to the student’s account, as long as, the required documents have been completed and submitted to the appropriate office. Loan funds will be applied to fall and spring semester enrollments, with half of the annual amount crediting to the student account each semester.
- Loan funds disbursing for only one semester will be credited to the students account in two disbursements. One at the beginning of the semester and one at the midpoint of the semester.
William D. Ford Direct Student Loan Program
How to Apply for a Direct Loan
- Go to your Student Portal to accept your student loans. Make sure you read the fine print at the bottom of the portal on how to adjust your loan amount.
- Complete Entrance Counseling. All new student borrowers will need to complete this Entrance Counseling session. This session provides you with useful tips and tools to help you manage your educational expenses and it helps you to understand this is a debt.
- Complete a Master Promissory Note. When your receive a Direct Loan for the first time at Oakland City University you must complete a Master Promissory Note (MPN). The MPN is a legal document in which you promise to repay your loan and any accrued interest and fees. It also explains the terms and conditions of your loan. One MPN can be used for loans that you receive over several years.
When you graduate or withdraw you must complete exit counseling.
You must complete Exit Counseling before you leave school to make sure you understand your rights and responsibilities as a borrower. You will receive information about repayment, and your loan servicer will notify you of the date loan repayment begins (usually six months after you graduate, leave school, or drop below half-time enrollment).
Subsidized Loans
Federal subsidized loans are based on financial need. The federal government pays the interest on the subsidized loan while students are enrolled at least half-time, and when they qualify for an authorized deferment. Financial need for subsidized loans is determined by the Expected Family Contribution (EFC) as determined by the FAFSA data.
Unsubsidized Loans
Federal unsubsidized loans are not based on financial need. Students who do not qualify for a subsidized loan may be eligible for an unsubsidized loan. The federal government does not pay the interest on an unsubsidized loan. Students have the option of paying the interest while they are in school, or they can choose to have the interest added to their principal balance through a process called capitalization.
Annual and Aggregate Loan Limits
The following chart provides maximum annual and aggregate (total) loan limits for subsidized and unsubsidized Direct Stafford Loans.
Year |
Dependent Undergraduate Student (except students whose parents are unable to obtain PLUS Loans) |
Independent Undergraduate Student (and dependent students whose parents are unable to obtain PLUS Loans) |
Graduate and Professional Degree Student |
First Year |
$5,500—No more than $3,500 of this amount may be in subsidized loans. |
$9,500—No more than $3,500 of this amount may be in subsidized loans. |
$20,500—No more than $8,500 of this amount may be in subsidized loans. |
Second Year |
$6,500—No more than $4,500 of this amount may be in subsidized loans. |
$10,500—No more than $4,500 of this amount may be in subsidized loans. |
|
Third and Beyond (each year) |
$7,500—No more than $5,500 of this amount may be in subsidized loans. |
$12,500—No more than $5,500 of this amount may be in subsidized loans. |
|
Maximum Total Debt from Stafford Loans When You Graduate (aggregate loan limits) |
$31,000—No more than $23,000 of this amount may be in subsidized loans. |
$57,500—No more than $23,000 of this amount may be in subsidized loans. |
$138,500—No more than $65,500 of this amount may be in subsidized loans. The graduate debt limit includes Stafford Loans received for undergraduate study. |
Note: These annual loan limit amounts are the maximum yearly amounts you can borrow in both subsidized and unsubsidized loans. You can have one type of loan or a combination of both. Because you can't borrow more than your cost of attendance minus any other financial aid you'll get, you may receive less than the annual maximum amounts. Also, the annual loan limits assume that your program of study is at least a full academic year.
A Direct Student Loan is a government guaranteed loan offering low interest rates and deferred payment options. There are two types of Direct Student Loans – subsidized and unsubsidized.
William D. Ford Direct Parent PLUS Loan Program
Federal Parent Loans for undergraduate students, also known as PLUS loans, are low-interest education loans that allow parents to fund the cost of their child’s education. A federal PLUS Loan allows eligible parents to borrow up to 100% of the estimated cost of their student’s college attendance, including student tuition, room and board, student books, transportation and additional expenses, minus any other financial assistance awarded to the student.
Parents of dependent students may apply for a Direct PLUS Loan to help pay their child's education expenses as long as certain eligibility requirements are met.
To be eligible for a Direct PLUS Loan for Parents:
- The parent borrower must be the student's biological or adoptive parent. In some cases, the student's stepparent may be eligible.
- The student must be a dependent student who is enrolled at least half-time at a school that participates in the Direct Loan Program. Generally, a student is considered dependent if he or she is under 24 years of age, has no dependents, and is not married, a veteran, a graduate or professional degree student, or a ward of the court.
- The parent borrower must not have an adverse credit history (a credit check will be done). If the parent does not pass the credit check, the parent may still receive a loan if someone (such as a relative or friend who is able to pass the credit check) agrees to endorse the loan. The endorser promises to repay the loan if the parent fails to do so. The parent may also still receive a loan if he or she can demonstrate extenuating circumstances.
- The student and parent must be U.S. citizens or eligible noncitizens, must not be in default on any federal education loans or owe an overpayment on a federal education grant, and must meet other general eligibility requirements for the federal student aid programs.
The annual limit on a PLUS Loan is equal to the student's cost of attendance minus any other financial aid the student receives.
For example, if the cost of attendance is $6,000 and the student receives $4,000 in other financial aid, the student's parent can request up to $2,000.
The loan will be disbursed in at least two installments, and no installment will be more than half the loan amount. The school will use the loan money first to pay the student's tuition, fees, room and board, and other school charges. If any loan funds remain, the parent will receive the amount as a check, unless he or she authorizes the amount to be released to the student. Any remaining loan funds must be used for the student's education expenses.
The interest rate is fixed at 7.9%. Interest is charged from the date of the first disbursement until the loan is paid in full.
Students and parents may check the interest rate, servicer information, and other financial aid history at the National Student Loan Data System located at www.nslds.ed.gov.
The parent will pay a fee of 4% of the loan amount, deducted proportionately each time a loan disbursement is made.
The repayment period for a Direct PLUS Loan begins at the time the PLUS loan is fully disbursed, and the first payment is due within 60 days after the final disbursement. However, for Direct PLUS Loans with a first disbursement date on or after July 1, 2008, the parent may defer repayment:
- while the student on whose behalf the parent borrowed the loan is enrolled on at least a half-time basis, and
- for an additional six months after the student ceases to be enrolled at least half-time.
How to Apply for a PLUS Loan
To apply for a Direct PLUS Loan, you need to complete the following 3 steps:
- Go to www.studentloans.gov and sign in using your PIN. (If you do not have a Federal Student Aid PIN, visit www.pin.ed.gov.) Parents must sign in using their own Federal Student Aid PIN.
- Click on and complete the Direct Parent PLUS Loan Request.
- Click on and complete a Direct PLUS Loan Master Promissory Note (MPN). The MPN explains the terms and conditions of your loan and is your legally binding agreement to repay your loan to the Department.
Parents must sign in using their own Federal Student Aid PIN to complete Direct PLUS Master Promissory Notes (MPNs) and Direct PLUS Loan Requests.
Endorsers must sign in using their own Federal Student Aid PIN to complete a Direct PLUS Loan Endorser Addendum
Carl Perkins Loans
A Federal Carl Perkins Loan is a low interest, long-term loan to help pay for your educational expenses. Loans of up to $2,000 per year are awarded to graduate and undergraduate students who show financial need. Repayment of this loan begins nine months after a student ceases half-time enrollment status. Interest is 5% simple interest.
If you're attending school at least half time, you have nine months after you graduate, leave school, or drop below half-time status before you must begin repayment. This is called "grace period." If you're attending less than half time, check with the Assistant to the Supervisor of Collections, in the Business Office to find out how long your grace period will be.
Oakland City University Payment Plan
The University offers students the ability to spread their tuition costs over a semester with an interest-free payment plan. This payment plan allows students to pay their balance in four equal payments.
Students should contact the Assistant to the Supervisor of Collections in the Business Office.
