Loans

There are various loan opportunities and programs you can explore to assist in funding your education. A loan will require repayment. Typically, repayment plans begin six months after you leave school. The federal government offers loans for students regardless of credit history or current finances. Many of these loans do not accrue interest while you are enrolled in school, provided you maintain minimum course hours. Parents and guardians may also qualify for loans available through the federal government or private lenders.

Federal Loans

Perkins Loan

  • 5% fixed interest
  • Principal and interest is deferred while student is enrolled at least half-time
  • Eligibility is based on financial need
  • Available to undergraduate students only
  • Up to $5,500 annually
  • Maximum of $27,500 as an undergraduate
  • Repayment begins nine months after graduation or when enrollment drops below half-time
  • Repayment period my be 10-25 years depending on repayment options and amount borrowed

William D. Ford Subsidized Stafford Loans

  • Fixed at a 3.4% interest rate (2011-12)
  • Eligibility based on financial need
  • Principal and interest is deferred while enrolled at least half-time
  • Freshmen (0-30 hours) can borrow up to $3,500
  • Sophomores (30-59 hours) can borrow up to $4,500
  • Junior and Seniors (60+ hours) can borrow up to $5,500
  • Graduate students may borrow up to $8,500 per academic year
  • Repayment begins six months after graduation or if enrollment drops below half-time
  • Repayment may run 10-25 years
  • Government pays interest until repayment begins

William D. Ford Unsubsidized Stafford Loans

  • Fixed at a 6.8% interest rate
  • Eligibility not based on financial need
  • If student is not eligible for a Subsidized loan, he/she is usually eligible for Unsubsidized
  • Principal is deferred while enrolled at least half-time
  • Undergraduate amount vary by grade level and dependency status
  • Graduates may borrow up to $12,000 per academic year
  • Repayment begins six months after graduation or if enrollment drops below half-time
  • May run 10-25 years (same as Subsidized loans)
  • Interest begins to accrue when loan is disbursed but may be deferred and capitalized at start of repayment

Parent Loan for Undergraduate Students (PLUS)

  • Fixed at a 7.9% interest rate
  • Available to parents of undergraduate students
  • Credit based
  • Amount of eligibility is determined by difference between school costs minus student's estimated financial assistance
  • Can be deferred by contacting Direct Loan
  • Interest begins to accrue when loan is disbursed

McElroy Loan

  • Designed to assist students who do not qualify for loans based on financial need
  • Typical award is $1500-$3000
  • Interest rate on new loans is 4.9%
  • Amount available to borrow is based on funds available
  • Interest and principal are deferred while the student is in school
  • Borrower must begin making payment no later than three months after ceasing to be enrolled at least six semester hours

Private Loans

Education loans are available from a number of private lenders. These loans typically require a credit check and, in most cases, a cosigner. Private loans must be repaid, and repayment typically begins once the student is no longer enrolled at least 1/2 time (6 or more credit hours). Mount Mercy works with a variety of lenders and it is up to the student and family to decide which private lender they would like to use.