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FAQ on Loans (Types, Fees, Limits, Repayment)

eAward Questions / Changes to Loans

To record a change to your loan decision, login to MyFinancialAid and select "View your eAward." Use the drop-down box to select your new decision. Make sure you complete the entire process!

  • A change from 'Reject' to 'Accept' can be made anytime during the academic year as long as:
    • the student is actively enrolled for 6.0 or more credit hours
    • decision is made before the end of the term/year (allowing adequate time for the loan to be processed)
  • A change from 'Accept' to 'Reject' must be made either:
    • before the loan disburses to the student account; or
    • within 14 days after the loan funds disburse to the student's account.

When you initially 'accept' any loan on your eAward, you have the opportunity to decrease the amount at that time (you are not permitted to increase the amount offered due to regulations).

After previously 'accepting' any loan, you must email finaid@cedarville.edu to request a reduction in the loan amount.

  • Provide the Name and Cedarville Student ID Number
  • Indicate the specific loan you desire to change
  • Specify the new loan amount you are requesting (take into account loan fees)

NOTE: The borrower has 14 days to make changes to the loan amount once the loan funds have disbursed to the student account. After 14 days the borrower must work with their loan servicer to return funds (i.e. reduce the principle amount of the loan).

Login at National Student Loan Data System - Student Access (NSLDS) to identify your loan servicer(s).

Loan Types

With the receipt of a valid FAFSA, there are essentially three types of federal direct loans which may be offered to an eligible student. The student's specific situation will determine which loan(s) they are offered as part of their financial aid package. Following is a brief description of each loan type:

Subsidized: The federal government pays the interest for the student as long as the student is enrolled at least half-time in their degree program.

  • A student must demonstrate financial need to be eligible for a subsidized loan (Cost of Attendance - FAFSA EFC - Other Student Aid).
  • A subsidized loan is only available to undergraduate students.
  • No penalty is incurred for early repayment.

Unsubsidized: The student is responsible for the interest charges on this loan.

  • Interest charges begin when loan funds are disbursed to the students account, and continue to be charged until the loan is fully paid.
  • NOTE: While enrolled at least half-time in their degree program, the student may either: a) pay the interest as they go; or b) allow the interest to accrue and when the loan goes into repayment, the accrued interest is capitalized and added to the loan principal amount.
  • No penalty is incurred for early repayment.

PLUS: This federal loan is available only to a parent of a dependent undergraduate student (as determined by the FAFSA) or to a graduate student.

  • The borrower must not have an adverse credit history.
  • If the borrower has an adverse credit history, he/she may still receive a PLUS loan by obtaining an endorser.
  • A Parent PLUS loan cannot be transferred to the student. The parent borrower is responsible for repaying the loan.
  • A Graduate PLUS loan is obtained by the student; therefore, the student is responsible for repaying the loan.

See studentaid.ed.gov/types/loans for additional information on federal student loan programs. For specific information see the following loan types:

Loan Fee Questions

A loan fee is a processing fee charged by the federal government to defray the costs of managing and lending loans to borrowers. The loan fee amount is a percentage of the term amount and is deducted from each loan disbursement. The percentage is based upon the date of the first disbursement for each loan (e.g. for a fall/spring loan, the first disbursement date will be the date when the fall disbursement is applied to the student's account).

See studentaid.ed.gov/types/loans for additional information on federal student loan programs. For specific information see the following loan types:

If you decide to obtain loans through the William D. Ford Federal Direct Loan Program as part of your college payment plan, then you will be charged a loan fee each time loan funds are disbursed to your student account. Like any loan, the loan fee is charged by the federal government to defray the cost of managing and lending loans to borrowers.

See studentaid.ed.gov/types/loans for additional information on federal student loan programs. For specific information see the following loan types:

Mid-year changes to Loan Fees for the Direct Loan Program

ALERT: Due to the ongoing implementation of Congress' Budget Control Act (BCA) of 2011, which put into place the "sequester" (automatic across-the-board federal budget cuts), the loan fees charged are determined by both the loan type and the first disbursement date.

First loan disbursement is made on or after December 1, 2013 and before Oct. 1, 2014

  1. Subsidized / Unsubsidized Student Loans: 1.072%
    • for undergraduate or graduate/professional students
  2. PLUS Loans: 4.288%
    • for either Parent PLUS or Grad PLUS loans

First loan disbursement is made on or after Oct. 1, 2014 and before Oct. 1, 2015

  1. Subsidized / Unsubsidized Student Loans: 1.073%
    • for undergraduate or graduate/professional students
  2. PLUS Loans: 4.292%
    • for either Parent PLUS or Grad PLUS loans

See studentaid.ed.gov/types/loans for additional information on federal student loan programs. For specific information see the following loan types:

The federal government automatically deducts these fees from the loan amount at the point of each loan disbursement.

Please take these examples into account when determining how much you would like to borrow to cover expenses for the school year.

The following examples for each loan type use the Loan Fee Percentages for first disbursement dates 'On or after Dec. 1, 2013 and before Oct. 1, 2014:

  1. Subsidized or Unsubsidized Student Loan Example: Annual loan for $3,500 split over two terms ($1,750 per term).
    $1,750 Loan principal amount for the term (amount to be repaid)
    - 18 1.072% loan origination fee (no rounding; truncate cents)
    $1,732 Actual term disbursement credited to the student’s account

    Student loans have annual loan limits; however, if you want you can reduce the annual amount borrowed from the standard amount offered on your financial aid eAward.

  2. PLUS Loan Example: Annual loan for $10,000 split over two terms ($5,000 per term).
    $5,000 Loan principal amount for the term (amount to be repaid)
    - 214 4.288% loan origination fee (no rounding; truncate cents)
    $4,786 Actual term disbursement credited to the student’s account

    Calculating your PLUS Loan: You can reduce the amount you borrow from the amount offered on your Cedarville Parent PLUS authorization or Grad PLUS authorization.

The payment plan options already take into account the anticipated fees related to the loan(s) you have accepted as part of your payment plan.

Loan Amount Questions

Federal direct student loans (subsidized or unsubsidized) have annual loan limits based on a student's year in college.

Undergraduate

  • 1st year student (Freshman): $5,500 (up to $3,500 may be subsidized)
  • 2nd year student (Sophomore): $6,500 (up to $4,500 may be subsidized)
  • 3rd year student (Junior): $7,500 (up to $5,500 may be subsidized)
  • 4th year student (Senior): $7,500 (up to $5,500 may be subsidized)
  • 5th year student (Continuing Senior): $7,500 (up to $5,500 may be subsidized)

Graduate / Professional

  • $20,500 (only unsubsidized)

See studentaid.ed.gov/types/loans for additional information on federal student loan programs. For specific information see the following loan types:

Federal direct student loans (subsidized or unsubsidized) have Aggregate Loan Limits based on the student's academic level.

Undergraduate

  • Dependent students: $31,000 (up to $23,000 may be subsidized)
  • Independent students (or Dependent students who parent(s) are unable to obtain a PLUS loan): $57,500 (up to $23,000 may be subsidized)

Graduate or Professional

  • $138,500 (only unsubsidized)
  • this includes all federal loans received as an undergraduate student

See studentaid.ed.gov/types/loans for additional information on federal student loan programs. For specific information see the following loan types:

Loan Repayment Questions

Stafford Loans (both subsidized and unsubsidized) have a six-month grace period from the time the student borrower graduates, leaves school, or drops below half-time enrollment, before entering repayment.

Parent PLUS Loans enter repayment as soon as the annual loan amount is fully disbursed. The parent borrower may request a deferment from their loan servicer for each loan borrowed. Examples of 'fully disbursed':

  • A 'fall only' loan enters repayment soon after the fall disbursement is made.
  • A 'fall/spring' loan enters repayment soon after the spring disbursement is made.

Graduate PLUS Loans have a six-month grace period from the time the student borrower graduates, leaves school, or drops below half-time enrollment, before entering repayment.

See studentaid.ed.gov/repay-loans/understand#when-do-i-begin for additional information on federal student loan repayment.

Provided by Cedarville University – Financial Aid Office (updated 2015-03-24)