Office of Financial Aid & Scholarships

Loans

Loans are an invaluable resource for students and their parents because they allow you to postpone paying a portion of your educational costs until after you graduate or after you drop below half-time (6 credits) enrollment. Repayment of student loans is traditionally scheduled over a ten-year period beginning 6 months after you leave school. Parents who borrow from the Federal Direct PLUS Loan for Undergraduate Students (PLUS) program begin repayment of their loans 60-days after the last disbursement.

Use this calculator if after reviewing your financial aid award and estimated annual charges (located on the back of your award), you and your family have decided on an amount to borrow in PLUS loan funds. The Department of Education deducts a 4% origination fee from each loan disbursement but then credits a 1.5% rebate as an incentive to make on-time payments. By incorporating a net origination fee of 2.5%, this loan calculator will determine the actual amount you need to borrow.

Federal Loans

Federal Direct Loans (Subsidized and/or Unsubsidized)

Federal Direct Loan—William D. Ford Federal Direct Loans are provided by the federal government and require that you first file a Free Application for Federal Student Aid (FAFSA). The Direct Loan Program provides a simple way to obtain and repay student loans; the U.S. Department of Education is the lender and the loan funds are sent directly to RIT. If you borrowed federal loans at a previous institution, you can combine those loans with the Federal Direct Loans under the Direct Consolidation Loan Program. Your academic year level and dependency status determines the maximum annual amount you may be eligible to borrow; the federal government also monitors loan aggregates for both undergraduate and graduate students.

What Kinds of Direct Loans are Available?

Direct Subsidized Loans—are loans for students with financial need, as determined by federal regulations. No interest is charged while you are in school at least half-time, during your grace period and during deferment periods.

Direct Unsubsidized Loans—are loans for students that are not based on financial need. Interest is charged during all periods. The interest on your loan will accumulate while you are in school. You may choose to either pay the interest, or to defer the interest payment, in which case it will be capitalized.

Federal Loan Limits

Annual Maximum Limit (Federal Direct [Sub & Unsub])

Dependent Student Independent Student

Year 1 $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)

Year 2 $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)

Years 3, 4, & 5 $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)

Graduate/
Professional n/a $20,500 (No more than $8,500 of this amount may be in subsidized loans)

Aggregate Limits

Dependent
Undergraduate $31,000 (No more than $23,000 of this amount may be in subsidized loans) n/a

Independent
Undergraduate n/a $57,500 (No more than $23,000 of this amount may be in subsidized loans)

Graduate n/a $138,500 (No more than $65,500 of this amount may be in subsidized loans)

Currently, the interest rate for Undergraduate Subsidized Direct Loans is 5.6% for loans disbursed on or after July 1, 2009. The interest rate for Undergraduate Unsubsidized Direct Loans is 6.8%. The interest rate for both Subsidized and Unsubsidized Graduate Direct Loans is 6.8%. A 1.5% origination fee is deducted by the government from each loan disbursement. As an incentive to encourage timely repayment of Direct Loans, a 1.0% rebate is offered at the time of disbursement. If a borrower makes all of the first 12 required monthly payments on time, the borrower can keep the rebate for the life of the loan.

Disclaimer: Graduate students who are certified for full-time equivalency status while completing thesis requirements have a maximum of four quarters of federal student loan eligibility

If you are a first time Federal Direct Loan borrower you must sign a Master Promissory Note and complete an Entrance Counseling tutorial/quiz. The Master Promissory Note can be completed at http://dlenote.ed.gov and the Entrance Counseling tutorial/quiz can be completed at https://www.dl.ed.gov/borrower/BorrowerWelcomePage.jsp. You may also complete both the Master Promissory Note and the Entrance Counseling tutorial in person at our office.

Additional electronic loan services for students include:

Federal Direct Loan Servicer—Check the account balance of your loan, estimate your loan repayment, select a repayment option, download forms.

Federal Direct Loan Consolidation—Simplify your loan repayments, secure a non-variable interest rate, find out if loan consolidation is for you.

Federal Direct Loan Exit Interview—All federal loan borrowers are required to complete an Exit Counseling session prior to graduation, leave of absence, or withdrawal from school. The purpose of the exit interview is to inform borrowers of the provisions of the loan(s) as well as their rights and responsibilities now that the loan(s) are in another status. Students who also borrowered a Federal Perkins Loan can complete their Exit Interview session online at http://www.ecsi.net/.

Students who have additional questions about the Exit Interview process should contact Student Financial Services at 585-475-5300 or via e-mail at asksfs@rit.edu.

Federal Perkins Loan

Federal Perkins Loan—This federal loan is awarded by RIT to select students based on information reported on the FAFSA. No interest accrues on the loan while you are enrolled at least half-time (6 credits). The interest rate for the Federal Perkins Loan is fixed at 5%. First time Perkins Loan borrowers must complete a Rights and Responsibilities Form and a Master Perkins Promissory Note. Both documents can be completed online at www.ecsi.net/prom02. You may also complete these documents in person at the Office of Financial Aid and Scholarships. Students are required to maximize their entire Direct Loan eligibility before receiving a Federal Perkins Loan.

Federal Direct PLUS Loans for Parents of Undergraduate Students

Federal PLUS Loan—Federal Direct PLUS Loans are provided by the federal government to help parents of dependent undergraduate students finance their education. Parents may borrow up to the full annual cost of education less any other financial aid for each dependent undergraduate student. Effective July 1, 2006 the interest rate is fixed at 7.9%. A 4% origination fee is deducted by the government from each loan disbursement. As an incentive to encourage timely repayment of Direct Loans, a 1.5% rebate is offered at the time of disbursement. If a borrower makes all of the first 12 required monthly payments on time, the borrower can keep the rebate for the life of the loan. For PLUS loans disbursed prior to July 1, 2009, repayment of principal plus interest typically begins 60 days after the final disbursement is made. For loans disbursed after July 1, 2009, parents may choose to defer payments until six months after the date the student ceases to be enrolled at least half time. Accruing interest could either be paid by the parent borrower monthly or quarterly, or be capitalized quarterly.

To apply for the Direct PLUS Loan for Parents of Undergraduate Students, you must:

Complete a Federal Direct PLUS Loan application
Complete an electronic Master Promissory Note

Federal PLUS Loans versus Private/Alternative Loans

	Federal PLUS Loan	Alternative Loans
Borrower	Parent of a dependent undergraduate student.	Student is the borrower with a cosigner.
Credit Review	Minimal credit review, based on federal standards & credit history. Approval is not based on income, financial need or debt-to-income ratio.	Comprehensive credit review process required. Credit scoring and/or debt to income ratio may be reviewed.
Repayment	Parent is responsible for repayment.	Student is responsible for repayment. A co-signer is also equally liable. The loan and payment history are listed on the co-signer’s credit report as well as the student’s.
Interest Rate	Current rate is 7.9%. New rate determined July 1.	Variable; can change monthly or quarterly. Usually no cap.
Capitalization of Interest	Once at repayment.	Can be as often as monthly.
Fees	Up to 4%, deducted proportionately from each disbursement. However, with the 1.5% rebate the fee is actually 2.5%.	Varies by lender.
Discharge	PLUS loans are federally insured and are discharged in the event of disability or death.	Alternative loans are not federally insured and may not offer discharge in the event of disability or death.
Payment Options	Loans disbursed after July 1, 2008: Payments may be deferred until 6 months after student ceases to be enrolled at least half time.	Payments may be deferred while a student is enrolled at least half-time.
Deferment and/or Forbearance	Unemployment and hardship deferments are available.	Unemployment and hardship deferments are generally not available.
Consolidation	Can be consolidated in a federal Consolidation Loan.	Limited consolidation options available at a variable rate.

Federal Direct PLUS Loans for Graduate Students

Federal Direct PLUS Loan for Graduate Students is a federal loan program provided to assist with remaining educational costs after the maximum federal Subsidized and Unsubsidized loans have been applied. Applicants must first file a FAFSA and must not have an adverse credit history. Otherwise, you must obtain a co-signer who does not have an adverse credit history.

The Federal Direct PLUS Loan for Graduate Students interest rate is fixed at 7.9%. A 4% origination fee is deducted by the government from each loan disbursement. As an incentive to encourage timely repayment of the PLUS Loan for Graduate Students, a 1.5% rebate is offered at the time of disbursement. If a borrower makes all of the first 12 monthly payments on time, the borrower can keep the rebate for the life of the loan.

To apply for the Direct PLUS Loan for Graduate Students, you must:

Complete a Federal Direct Graduate PLUS Loan application

Complete an electronic Master Promissory Note

Complete the Graduate PLUS Entrance Interview online

Federal Direct Loan Repayment Options

Federal Direct Loan borrowers have a number of repayment options. Information on those options, as well as information on Public Service Loan Forgiveness and postponing repayment can be found at:

Student Aid on the Web

Federal Direct Loan Servicer

Alternative (non-federal) Loans

Alternative Educational Loans

Alternative educational loans are private loans (non-federal) offered through banks to supplement financial aid awards. RIT is required to certify these loans to ensure that the loan amount does not exceed the cost of attendance less all other financial aid. Most alternative loans are disbursed equally into student accounts according to enrollment plans. We encourage students and families to use alternative loans as a last option after first pursuing all federal loan options. If you decide that an alternative loan is right for you, you may borrow from any lender that you choose. When choosing a lender for an alternative loan, you may wish to consider the following factors:

Loan costs (interest rates and fees)

Borrower benefits and discounts

Customer service

Student Lending Analytics (an independent and advisory firm with NO affiliations with any student lenders) provides additional information on alternative loans and guidance on selecting a lender. The information can be found at http://studentlendinganalytics.com/alternative_loan_options.html. We encourage students to review information on at least the factors listed above when choosing a lender for an alternative loan. For additional information regarding responsible student loan borrowing and evaluating student loan lenders, visit the responsible student loan borrowing page.

You may also want to consider applying for a private student loan through a credit union. A credit union might be able to offer you a loan with an affordable interest rate, zero origination fees, and flexible repayment options. Presently more than 80 credit unions are participating with Credit Union Student Choice, a group that helps credit unions offer private student loans. For additional information, please go to www.studentchoice.org .

When applying for your loan remember to request the amount of funds for the full academic year. Once your application has been approved with a credit check, we will certify your eligibility and schedule the disbursement of funds directly into your RIT account. Credit checks on alternative loans are only valid for a period of time that is determined by the lender. In many cases, the lenders use 180 days. An application completed too soon before the start of your first term may not be valid.

Federal PLUS Loan for Graduate Students versus Alternative Loans

	Federal PLUS Loan	Alternative Loans
Borrower	Graduate student.	Graduate student. May require cosigner.
Credit Review	Minimal credit review, based on federal standards & credit history. Approval is not based on income, financial need or debt-to-income ratio.	Comprehensive credit review process required. Credit scoring and/or debt to income ratio may be reviewed.
Repayment	Payments may be deferred while a student/borrower is enrolled at least half-time. There is no grace period.	Payments may be deferred while a student is enrolled at least half-time. There is also a 6 month grace period.
Interest Rate	Current rate is 7.9%. New rate determined July 1.	Variable; can change monthly or quarterly. Usually no cap.
Capitalization of Interest	Once at repayment.	Can be as often as monthly.
Fees	Up to 4%, deducted proportionately from each disbursement. However, with the 1.5% rebate the fee is actually 2.5%.	Varies by lender.
Discharge	PLUS loans are federally insured and are discharged in the event of disability or death.	Alternative loans are not federally insured and may not offer discharge in the event of disability or death.
Deferment and/or Forbearance	Unemployment and hardship deferments are available.	Unemployment and hardship deferments are generally not available.
Consolidation	Can be consolidated in a federal Consolidation Loan.	Limited consolidation options available at a variable rate.

Loan Borrowing History (National Loan Databases)

National Student Clearinghouse

The National Student Clearinghouse offers services to assist students to track their student loans and obtain verification of their in-school status. Secure Web-based services make it easy to access up-to-date information on loans and enrollment status.

National Student Loan Data System (NSLDS)

National Student Loan Data System (NSLDS) is the U.S. Department of Education's central database for student aid. It receives data from schools and agencies that guaranty loans, the Direct Loan program, the Pell Grant program, and other U.S. Department of Education programs.

Annual Maximum Limit (Federal Direct [Sub & Unsub])
	Dependent Student	Independent Student
Year 1	$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)
Year 2	$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)
Years 3, 4, & 5	$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)
Graduate/ Professional	n/a	$20,500 (No more than $8,500 of this amount may be in subsidized loans)
Aggregate Limits
Dependent Undergraduate	$31,000 (No more than $23,000 of this amount may be in subsidized loans)	n/a
Independent Undergraduate	n/a	$57,500 (No more than $23,000 of this amount may be in subsidized loans)
Graduate	n/a	$138,500 (No more than $65,500 of this amount may be in subsidized loans)