Loans

The Federal Perkins Loan Program

What: This is a federally funded low interest loan for students based on financial need as determined by the FAFSA process. A Promissory Note and Entrance Interview is required of all first-time borrowers.

How much: Students may borrow each year up to $5500 as an undergraduate student and $8000 as a graduate student, not to exceed the aggregate loan limits as determined by the
federal government.

Interest rate: 5%.

Requirements: Student must have a completed FAFSA on file, demonstrate need, not in default, have not received maximum yearly/aggregate loan limits, enrolled in an eligible curriculum, meeting satisfactory academic progress, and enrolled at least half-time (six credit hours - fall/spring; 3 credit hours - summer).

Repayment: Repayment will begin 9 months after termination of the student's enrollment. No repayment is required and no interest is charged while the student is enrolled in school at least halftime.

The Federal Direct Subsidized Loan Program

What: This is a low interest rate loans offered through the Department of Education to qualifying students. A Master Promissory Note and Entrance Interview is required of all first-time borrowers.

How much: The maximum annual loan limits are as follows: $3500 for freshmen, $4500 for sophomores, $5500 for juniors and seniors, and $8500 for graduate students. The amount a student may borrow is the annual limit or documented financial need, whichever is lower. The Department of Education will deduct 1% from the loan amount (1% origination fee and 0.5% rebate fee) prior to loan disbursement.

Interest rate: It is variable, but will not exceed 8.25%.

Requirements: Student must have a completed FAFSA on file, demonstrate need, not in default, have not received maximum yearly/aggregate loan limits, enrolled in an eligible curriculum, meeting satisfactory academic progress, and enrolled at least half-time (six credit hours - fall/spring; 3 credit hours - summer).

Repayment: No interest is charged while the student is enrolled for at least 6 credit hours. Repayment will begin 6 months after students cease at least half-time enrollment.

Eligibility Requirements to receive a Federal Direct Student Loan

Students must be enrolled as a regular student in an eligible, degree seeking program, enrolled at least half-time credit hours, meeting Satisfactory Academic Progress and all other Federal Requirements to be considered for the Federal Direct Student Loan Programs.  Regular students may receive aid for classes they take in a school’s continuing education department as long as the classes apply to their degree or certification program.

Half-time enrollment consists of:

Undergraduates – Six (6) credit hours during Fall or Spring semesters. Three (3) credit hours during a Summer semester.

Graduate – Five (5) credit hours during Fall or Spring semesters. Three (3) credit hours during a Summer semester.

According to Federal Regulations:  If a student is enrolled in courses that do not count toward his/her degree, they (the courses) cannot be used to determine enrollment status unless the courses are noncredit or remedial courses*.  This means a student cannot be awarded and receive aid for classes that do not count toward his/her degree or certificate.

*Further stipulations regarding non-credit, reduced credits for remedial courses are outline in the Federal Regulations.

According to the University of New Orleans’ Student Handbook -   In regards to Level of Coursework: Only coursework taken at the 4000G level or above (6000-7000) may apply towards a graduate degree.  Some programs require pre-requisite coursework that may be at an undergraduate level before allowing a student to progress in a degree program.  Such prerequisites cannot be applied towards the degree.

Therefore, Graduate students must be enrolled in graduate or eligible graduate classes, as stipulated in the Student’s Handbook, to receive Federal Student Aid.

Example:

An eligible graduate student is enrolled in 12 credit hours during a spring semester :

  • 3 credit hours are a 2000 level class
  • 3 credit hours are a 3000 level class
  • 3 hours are audit and
  • 3 credit hours are 6000 level hours

Result: The student will not be eligible for Federal Student Aid.
Reason: Student does not have at least six (6) credit hours which count toward his/her degree.

The Federal Direct Unsubsidized Loan Program

What: This is a low interest rate loans offered through the Department of Education to qualifying students. A Master Promissory Note and Entrance Interview is required of all first-time borrowers.

How much: Students may be eligible to borrow up to $12000, depending on the student’s grade level.

Interest rate: It is variable, but will not exceed 8.25%.

Requirements: Student must have a completed FAFSA on file, demonstrate need, not in default, have not received maximum yearly/aggregate loan limits, enrolled in an eligible curriculum, meeting satisfactory academic progress, and enrolled at least half-time (six credit hours - fall/spring; 3 credit hours - summer).

Repayment: This loan DOES accrue interest while the student is enrolled. The interest may be either paid or capitalized until the student leaves the university. The repayment begins once the student cease at least half-time enrollment.

The Federal Direct Plus Loan for Undergraduate Students (Plus)

What: Loan available to parents of undergraduate students and processed through the Department of Education.

How much: Loan amount is based upon the student's cost of attendance and the amount of financial aid already being received by the student.

Interest: Varies but should not exceed 9%

Requirements: Students must be enrolled for and maintain at least half-time hours, not in default, enrolled in an eligible curriculum, meeting satisfactory academic progress. Parent borrower must be credit worthy (loan contingent upon credit approval).

Repayment: Repayment begins 60 days after loan funds are disbursed .

The Federal Direct Plus Loan for Graduate Students (GRAD Plus)

What: Loan available to graduate students and processed through the Department of Education.

How much: Loan amount is based upon the student's cost of attendance and the amount of financial aid already being received by the student.

Interest: Varies but should not exceed 9%

Requirements: Students must be enrolled for and maintain at least half-time hours, not in default, enrolled in an eligible curriculum, meeting satisfactory academic progress. Student borrower must be credit worthy (loan contingent upon credit approval).

Repayment: Repayment begins 60 days after loan funds are disbursed.

The Federal Direct Additional Unsubsidized Loan for
Dependent Students

What: Offered through the Department of Education to qualifying dependent, undergraduate students as an additional source of funds.

How much: Qualifying students may borrow amounts up to $2000.00 as a dependent, undergraduate student.  The students cannot exceed their Cost of Attendance.

Interest:  Varies.  This loan accrues interest while the student is enrolled and is the responsibility of the borrower throughout the entire history of the loan.  The interest may be paid while attending school or capitalized until the student leaves the university or falls below ½ time enrollment.    

Requirements:  Students must be enrolled for and complete at least 6 credit hours, in an eligible degree-seeking program.  The applicant’s eligibility for Federal grants and the Federal Stafford loan must be determined before this type of loan can be awarded.  All eligibility requirements for Federal Student Aid must be met.

Repayment:  Interest is accrued once the loan is disbursed and repayment begins after termination of ½ time enrollment.

The Federal Direct Additional Unsubsidized Loan for
Independent Students

What: Offered through the Department of Education to the independent undergraduate or graduate/professional students as an additional source of funds.

How much: Students may borrow amounts up to $6000 as a freshman or sophomore, $7000 as a junior or senior, or $12,000 as a graduate student.

Interest: Varies

Requirements: Students must be enrolled for and complete at least 6 credit hours. The applicant's eligibility for Federal grants and the Federal Direct Stafford loan must be determined before this type of loan can be awarded. If a dependent student's parent is denied a Direct PLUS loan the student may be eligible for funds under the Federal Directloan program; however, a Direct PLUS loan denial letter from the Department will be required.

Repayment: Interest is accrued once the loan is disbursed and repayment begins after termination of enrollment.

Alternative Loans (Private Loans)

Alternative or private loans can be a useful resource to help in funding education if used wisely and only when necessary.  Alternative or private loans are contingent upon credit worthiness and must be repaid with interest!  Unlike federal loans, these loans are not guaranteed by the government, and will not be reflected on the National Student Loan Data System (NSLDS) like Title IV loans, but they will appear on your credit report.

You are STONGLY encouraged to seek available funding though Scholarships, State Aid and Federal Student Aid Programs. Many students can meet their educational costs by combining these programs along with family resources, and find they will not need to apply for additional resources.  Alternative or private loans may reduce eligibility for free or lower-cost federal, state, or institutional funding programs.  It is only when other resources do not meet educational costs that students should consider an alternative loan.  Students should exhaust all of their Federal Loan eligibility before considering alternative loans.

Additionally, alternative loans generally have higher interest rates and origination fees than the federal student aid programs.  The University of New Orleans does not have a preferred lender list, so we encourage you to surf the internet for the availability of alternative or private  loans. If you are considering an alternative loan, please compare loan terms, interest rates, finance charges and repayment terms.

You are welcome to speak to a Financial Aid Counselor in the Office of Student Financial Aid for further information.