Educational loans provide an excellent source of financial assistance needed to meet the expenses of your Freed-Hardeman University education. FHU provides several different loan options for you. The primary resource for students is the Federal Loan programs. We do recommend the private (alternative) loan program when additional funds are needed. Listed below are the programs that we provide:
Federal Perkins Loan
The Perkins Loan is a federal loan administered by the University. It is in the student's name and it must be repaid. Eligibility is determined by the results from the FAFSA. This loan is a needs-based loan and has a fixed interest rate of 5%. Interest does not accrue and repayment does not begin until nine months after you have graduated, dropped below half-time status, or withdrawn from the University. The deadline, to have your FAFSA in, for the Perkins loan is March 1. A Perkins Entrance Counseling and the Perkins Master Promissory Note is required for disbursement of these funds. Any awards that a student is eligible for will be listed in your Financial Aid Award Package (based on FAFSA). In order to secure these funds, follow the instructions in the Financial Aid Award Package.
Federal Direct Stafford Loan
Federal Stafford loans are federal loans that are in the student's name and can be either subsidized or unsubsidized. A subsidized Stafford loan is awarded on the basis of financial need which is determined from the FAFSA. The interest rate is fixed at 5.6%. The federal government pays the interest accruing on the loan while the student is enrolled a least half-time in a degree seeking program of study. Repayment does not begin until six months after you have graduated, dropped below half-time status, or withdrawn from the University. The loan is not credit based, nor does it require a co-signer. Any awards that a student is eligible for will be listed in your Financial Aid Award Package (based on FAFSA). In order to secure these funds, follow the instructions in the Financial Aid Award Package.
An unsubsidized loan is not need based. The interest is fixed at 6.8%. The government does not pay the interest while the student is in school. The borrower is charged interest from the time the loan is disbursed (from the lender to the school) until it is paid in full. The student can choose to pay the interest while in school or defer the interest and have it added to the principal balance. As with the subsidized loan, repayment on the principal does not begin until six months after you have graduated, dropped below half-time status, or withdrawn from the University.
Stafford loans have maximum annual limits. The following is a list of the maximum amounts that may be borrowed:
* Freshmen (0-29 hours) - $5500
* Sophomores (30-59 hours) - $6500
* Juniors (60-89 hours) - $7500
* Seniors (90+hours) - $7500
*Independent students and students whose parents were denied on the PLUS loan
may be eligible for an additional Stafford loan.
There are two forms that have to be complete for these loan funds to be disbursed. The forms are the Stafford Entrance Counseling form and the Stafford Master Promissory Note. These two forms are only to be completed once and are good for 10 years.
Federal Direct Parent PLUS Loan
This is a loan that is available to the parents of a dependent student. The loan is in the parent's name and the repayment is the parent's responsibility. The interest rate is fixed at 8.5%. Parents may borrow up to the cost of attendance of their dependent's education, less any amount of financial aid received. Eligibility is based on credit history. The loans disburse 1/2 of the total in the fall semester and 1/2 of the total in the spring semester. The loan amount is not to exceed the student's federal budget. Prior to disbursement, the lender withholds 3% from the borrowed amount for loan origination fees. Repayment begins 60 days after the loan is fully disbursed. The payments are spread out over a 10 year period. The payments can be deferred while the student is enrolled in school.
There are two forms that have to be completed for the disbursement of these loan funds. A pre-approval (PLUS Request Form) and a PLUS Master Promissory Note must be completed. Information about these two forms will be included in your Financial Aid Award Package.
Alternative (Private) Loan
The Alternative loan is an alternative to the Parent PLUS loan. Alternative loans are issued in the student's name and payments do not begin until six months after the student has graduated, dropped below half-time status, or withdrawn from the University. Alternative loans are based on a student's credit history and usually have a higher interest rate. A lack of established credit history, may require the use of a co-signer on the private loan. The interest rate is variable and the fees could be as low as 0%, which are based on the credit of the co-signer. An Alternative Loan Application will need to be completed. Information about this form will be included in your Financial Aid Award Package.
Parents and Students should pursue all the financial aid including grants, scholarships, work study, Federal Stafford loans, Federal Perkins loans, and Federal Parent (PLUS) before pursuing a private/alternative loan as the terms of the private/alternative loan are generally not as favorable when compared to the Federal loan programs. Student and parent borrowers are encouraged to research the private/alternative market to secure the best loan available for their needs. Freed-Hardeman University will not deny, refuse, or delay the loan application or loan certification process in the event a student/parent borrower wishes to secure a private/alternative loan from another lender(s). Before you borrow, learn more about private student loans.