Terms and Conditions of Loans
Updated: 6/1/16; Reviewed: 7/13/21
Contact: Financial Aid
Student loans are an excellent resource to assist in college affordability and provide access to a private, liberal arts education. Federal student loans provide students limited borrowing ability each year with competitive and affordable interest rates. The key to borrowing for your education, is borrowing wisely. The Federal Government limits how much a student may borrow per year, which makes it very difficult for student’s debt to get out of control.
What types of student loans are there?
Federal Direct Loan Program
By completing a FAFSA annually, you have successfully applied and guaranteed eligibility for a Federal Direct Loan. Direct Loans are low interest student loans funded by the U.S. Department of Education (ED). More about the Direct Loan program:
- 3.76% Fixed interest rate on all loans beginning July 1, 2016
- 1.069% Origination fee is deducted by ED at time of disbursement
- There are two types: Subsidized (interest deferred) and Unsubsidized (interest accrues). The results of your FAFSA determine which you are eligible to receive. No more than $3,500 may be subsidized for first-year students; $4,500 subsidized limit for second-year, and $5,500 subsidized limit for the third and fourth years.
- The maximum amount borrowed per academic year is based on academic eligibility. A student who borrows the maximum for four years will accumulate $27,000 of student loan debt. The limit for undergraduate study by a dependent student is $31,000.
- $5,500 maximum for first-year
- $6,500 maximum for second-year (26-57.5 credit hours)
- $7,500 maximum for juniors and seniors (58-89.5 credit hours and 90+ credit hours, respectively)
- Independent students (determined by the FAFSA) and dependent students whose parent is denied a Federal Parent Loan (see below) may be eligible for an additional $4,000 unsubsidized loan (first and second-year) or $5,000 unsubsidized loan (junior year and beyond) per academic year.
- Students must be degree seeking and enrolled at least half-time (6 credit hours) per semester.
- Repayment begins six (6) months after graduation or when the enrollment ceases to be half-time.
To receive your first loan disbursement, students must complete Loan Entrance Counseling and a Master Promissory Note (MPN) online at www.studentaid.gov.
Federal Perkins Loan and Federal Nursing Loan
Like the Direct Loan, the FAFSA is your application for the Perkins and/or Nursing Loan. However, these loans are a need-based, limited source of financial aid. For more information on if you might be eligible, visit www.jewell.edu/afford/loans.
Private Student Loans
These non-Federal loans are similar to what you might obtain from your bank. Based on your (student) credit history and the credit of your co-signer (parent, family member, friend, etc.), your interest rate may vary based on the marketplace. Generally, we ask you to speak with a financial aid counselor before pursuing private student loans to make sure all other Federal options have been exhausted. For more information, visit www.jewell.edu/afford/loans.
Federal Parent Loan
A Federal Parent Loan is not a student loan at all. These competitive loans give parents a long term financing solution to assist their son or daughter in paying for a Jewell education. Only one parent may borrow per term and the student must be a dependent undergraduate according to the FAFSA and eligible for the Federal Direct Loan (above).
- 6.31% Fixed interest rate beginning July 1, 2016
- 4.276% Origination fee is deducted by ED at time of disbursement
For every $5,000 borrowed, a parent can expect to incur a $56 monthly payment for a standard 10 year repayment. We encourage all parents deciding on a Parent Loan to complete the Loan Entrance Counseling for Parents to make sure you are comfortable with the terms of this Federal Loan. For disbursement to be complete, a parent must complete a Master Promissory Note (MPN).
Once this is completed, Jewell will add the requested loan amount to the student account and schedule a disbursement date for the first date of classes, or within two business days if the term has begun.
If your Parent Loan is denied due to credit reasons, your student is allowed additional eligibility in an unsubsidized Federal Direct Loan. This is a better solution than pursuing a Private Loan, but this does increase the total borrowing capacity of the student, which could lead to undesirable monthly repayment upon the students graduation at Jewell. For this reason, we encourage parents who are denied to consider paying the interest on the additional unsubsidized loan while the student is in school to prevent the student from needing to pay accrued interest as a result of a denied Parent Loan.