Loans

Loans are a valuable 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.

Federal Loans

The Department of Education will now accept Federal Direct Loan applications and Federal Direct Loan Master Promissory Notes for enrollment during the 2020-2021 academic year. Please complete these 2020-2021 documents on-line at studentaid.gov.
 

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 and during deferment periods.
  • Direct Unsubsidized Loans—are loans for students that are not based on financial need. 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 Direct Student Loan 2020-2021 Interest Rates

The Bipartisan Student Loan Certainty Act of 2013 ties federal student loan interest rates to financial markets. Under this Act, interest rates will be determined each June for new loans being made for the upcoming award year, which runs from July 1 to the following June 30. Each loan will have a fixed interest rate for the life of the loan. Federal student loans have loan fees that are a percentage of the total loan amount. The loan fee is deducted proportionately from each loan disbursement you receive.

 

Federal Direct Student Loans 2020-2021 Interest Rates

Effective for Loans First Disbursed on or after July 1, 2020 and prior to July 1, 2021

Loan Type Borrower Type

Index

10-Year Treasury Note

Add-On Fixed Interest Rate
Direct Subsidized Loans Undergraduate Students 0.700% 2.05% 2.75%
Direct Unsubsidized Loans Undergraduate Students 0.700% 2.05% 2.75%
Direct Unsubsidized Loans Graduate/Professional Students 0.700% 3.60% 4.30%
         

 

View chart of historical interest rates from 2008.

New information on Subsidized Direct Loans effective July 1, 2013

If you are a first-time borrower on or after July 1, 2013, there is a limit on the maximum period of time (measured in academic years) that you can receive Direct Subsidized Loans. This time limit does not apply to Direct Unsubsidized Loans or Direct PLUS Loans. If this limit applies to you, you may not receive Direct Subsidized Loans for more than 150 percent of the published length of your program. This is called your “maximum eligibility period.” For additional information refer to Policies and Information: Time Limits on Direct Subsidized Loan Eligibility for First Time Borrowers.

Federal Loan Limits

Annual Maximum Limit (Federal Direct [Subsidized & Unsubsidized])
  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 As of July 1, 2012, subsidized loans are no longer available to graduate and professional degree students.
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)
     

 

As of July 1, 2012, subsidized loans are no longer available to graduate and professional degree students.

Disclaimer: Graduate students who are certified for full-time equivalency status while completing thesis requirements have a maximum of three semesters 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. Both can be completed at studentaid.gov. 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 History & Loan Consolidation—View information about your direct loan balance and contact information for your loan servicer.
  • 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 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—This federal loan program ended September 30, 2017. Repayment on the Federal Perkins Loan begins 9 months after a student drops below half-time enrollment. Students entering repayment will pay accrued interest at an annual rate of 5%. The full loan amount with all interest and fees is generally paid within ten (10) years. The minimum monthly payment is $40.00. The loan may be prepaid, payments can be made before required or in amounts that are greater than required at any time without penalty. In some circumstances the loan may be deferred for student status, economic hardship, unemployment, military service, or cancellation service. A Department of Defense repayment program may be available for specified military service. If you were a federal Perkins loan recipient while attending RIT, please contact RIT’s Perkins loan servicer Heartland ECSI for additional information.

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. Current interest rates (July 1, 2020 - June 30, 2021) are fixed at 5.30%. A 4.236% origination fee is deducted by the government from each loan disbursement.

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

  1. Complete PLUS Loan application on-line
  2. Complete an electronic Master Promissory Note

Federal PLUS Loan Deferments—As of 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.

If you would like to defer repayment on your PLUS loan until 6 months after your son/daughter graduates or drops below half-time status, you should contact the Servicer of your PLUS loan. To determine your Loans Servicer, go to studentaid.gov.

  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 New interest rate of 5.30% effective July 1, 2020. Interest rates are fixed or variable, typically ranging from 2.25% - 12.99% depending on the borrowers credit rating.
Capitalization of Interest Once at repayment. Can be as often as monthly.
Fees 4.236% Origination Fee on or after Oct. 1, 2019 and before Oct 1, 2020 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 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 Loan for Graduate Students is a federal loan program provided to assist with remaining educational costs after the maximum federal 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.

Current interest rates (July 1, 2020 - June 30, 2021) are fixed at 5.30%. A 4.236% origination fee is deducted by the government from each loan disbursement.

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

  1. Complete Graduate PLUS Loan application on-line.
  2. Complete an electronic Master Promissory Note and Graduate PLUS Entrance Interview online.
  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 also a six-month grace period before payments are required. Payments may be deferred while a student (borrower) is enrolled at least half-time. Inquire with the lender if payments are deferrable while attending school and if they offer a grace period.
Interest Rate New interest rate of 5.30% effective July 1, 2020. Interest rates are fixed or variable, typically ranging from 2.25% - 12.99% depending on the borrowers credit rating.
Capitalization of Interest Once at repayment. Can be as often as monthly.
Fees 4.236% Origination Fee on or after Oct. 1, 2019 and before Oct 1, 2020 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.
   

 

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

The NYS Get on Your Feet Loan Forgiveness Program provides up to 24 months of federal student loan debt relief to recent NYS college graduates who are participating in a federal income-driven repayment plan whose payments are generally capped at 10 percent of their discretionary income.

This loan forgiveness program has been established for the purpose of alleviating the burden of federal student loan debt for NYS college graduates.

Eligibility requirements:

  • be a legal resident of NYS and have resided in NYS for 12 continuous months;
  • be a U.S. citizen or eligible non-citizen;
  • have graduated from a NYS high school or received a NYS high school equivalency diploma;
  • have earned an undergraduate degree from a college or university located in NYS in or after the 2014-15 academic year;
  • have earned no higher than a bachelor’s degree at the time of application; and
  • apply for this program within two years of receiving an undergraduate degree.
  • be enrolled in the federal Income Based Repayment plan or Pay as You Earn plan;
  • have a primary work location in NYS, if employed;
  • have an adjusted gross income of less than $50,000;
  • be current on all federal or NYS student loans;
  • be current on the repayment of any NYS award;
  • be in compliance with the terms of any service condition imposed by a NYS award.

For more details on how to apply for the NYS Get on Your Feet Loan Forgiveness Program, please refer to Higher Education Services Corporation (HESC).

Alternative Educational Loans

Carefully review all financing options prior to considering this type of loan.  If you qualify for federal loan(s), be sure to use these loan options first (Direct Subsidized/Unsubsidized and Direct PLUS/Graduate PLUS loans). RIT also offers installment payment plans which are available on a per semester basis.

Federal PLUS Loan for Parents of Undergraduate students verses Alternative Educational Loans 

Federal PLUS Loan for Graduate Students verses Alternative Educational Loans

Finding a Lender

Alternative educational loans are private loans (non-federal) offered through banks to supplement financial aid awards.  You may borrow through any lender of your choice as RIT does not maintain a preferred lender list. However, we realize that finding a lender may seem overwhelming, so in addition to using general internet search engines we are providing some of the lenders that we have used in prior aid years below based on the highest dollar volume and number of loans certified by RIT.  

It is highly recommended to take time to research all alternative loan options and determine which one will best meet your needs.  Please consider the following components:

Determined by the terms of the individual loan, taking into consideration the credit worthiness of the applicant and co-signor.  Individual lenders may offer incentives during repayment reflecting such things as on-time payments. 

Consider the average length of time required for processing in relation to when loan funds are needed. Many lenders suggest using Google Chrome for an optimal on-line application experience.

Lenders may offer interest reductions based on signing up for EFT and/or on-time payments.  Benefits and discounts vary based on lender.

Application process may be electronic, paper or a combination of both.

The period of time after loan approval and certification by RIT when the borrower may cancel the loan without penalty, typically ranges from 3-10 business days. Funds will be disbursed at the conclusion of the rescission period or on the scheduled disbursement date (usually 10 calendar days prior to the start of the loan period) whichever is later. 

Private loans may offer a variety of repayment options.

Important considerations including availability of toll free service, on-line application process, efficiency of problem resolution.

Historical Lenders

The following list represents the six lenders with the highest dollar volume and number of loans certified at RIT in prior aid years. 

Lender Contact Information Rescission Period
Sallie Mae*

www.Salliemae.com

(877) 279-7172

 5-8 Business Days
Discover*

www.Discoverstudentloands.com

(800) 788-3368

8-14 Business Days
Citizens Bank

www.Citizensstudentloans.com

(800) 708-6684

7 Business Days
Prodigy Finance*

www.Prodigyfinance.com/contact-us

(866) 533-3304

6 Business Days
College Avenue

www.Collegeavenuestudentloans.com

(844) 422-7502

6 Days (including weekends)
Wells Fargo

www.Wellsfargo.com/student

(800) 658-3567

6 Days (including Saturdays)
     

*Sallie Mae, Discover Student Loans and Prodigy Finance will consider applications from international students usually requiring a US co-signor.

When to Apply

It is important to allow sufficient time for the application process so the loan will credit the student’s bill and disburse on time.  Determine the time frame the loan is required (loan period) and apply by the recommended date:

Semester(s) 2019-2020 Loan Periods 2020-2021 Load Periods Apply By
Summer Only 5/16/19 - 8/13/19 5/12/20 - 8/10/20 May 1
Fall and Spring 8/26/19 - 5/6/20 8/24/20 - 5/5/21 July 1
Fall Only 8/26/19 - 12/18/19 8/24/20 - 12/16/20 July 1
Spring Only 1/13/20 - 5/6/20 1/11/21 - 5/5/21 December 1
       

Tip: it is recommended to file for the entire academic year while attending classes rather than per semester to avoid potential delays with a new loan application.

Loan Amount

Only borrow what you need as interest rates tend to be higher on this type of loan.  Please call our office at (585) 475-2186 if you need any assistance with any aspect of the loan process so it is completed accurately.

How to Apply

Once you have determined a lender to borrow through, the loan period and the loan amount, you are ready to apply.  Follow the lender’s application instructions and submit all required documentation, if applicable.  

Please be in contact with your lender throughout the application process to ensure timely processing.

DISCLAIMER: RIT does not maintain a preferred lender list. Thus, the Institute has no agreements or relationships with any lenders and does not receive any benefit, financial or otherwise, from the use of alternative loans by students. For more information about the Institute’s policies, please refer to our Code of Conduct.

State Educational Loans

State educational loans:

  • are available to both undergraduate and graduate students (and possibly to parents and relatives), as long as the student is matriculated and enrolled at least half time in a degree program.
  • are credit-based and offer interest rates and terms which are very competitive with alternative loans.
  • may have both fixed and variable interest rates available, depending on the state.

Not all state governments offer an educational loan program; to learn if your state has a state loan program contact your State Education Agency through the Department of Education’s Educational Resource Organizations Directory. To qualify for a state educational loan from any of the states listed below, you must be a resident of that state, unless otherwise noted. Carefully read the criteria for the loan and contact the state organization if you have any questions.

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.