Loans
Federal Perkins Loan
Long-term, low-interest loans are made available through this
jointly sponsored program of the federal government and each college. Within the limits of
documented financial need, students may borrow up to $4,000 for each year of college study
to a total of $16,000. The loan is interest-free as long as the borrower remains a
student. Simple interest at the rate of 5 percent begins nine months after a student is no
longer in college.
Federal Stafford Loans
Eligibility for the subsidized Federal Stafford Loan is based on
documented financial need. The maximum that full-time undergraduates may borrow is $2,625
for the first year, $3,500 for the second year and $5,500 for each of the third and fourth
years. The federal government will subsidize the interest for students enrolled full-time.
Repayment of the principal begins six months after a student is no longer in college. The
interest rate is a variable rate, with a maximum of 8.25 percent.
An unsubsidized version not based on financial need is also
available through the Federal Stafford Loan program. Loan limits and interest rates are
the same as the subsidized Federal Stafford Loan; however, the student must pay interest
on the loan while in school.
Federal Parent Loan for Undergraduate Students (PLUS)
The purpose of this loan is to assist parents by providing a
source of loan funds for the college education of their dependent children. Parents may
borrow up to the full cost of education less any other financial aid the student receives.
Repayment of the loan begins within 60 days of disbursement.
Student Educational Loan Fund (SELF)
Minnesota has a loan program that permits a student attending a
Minnesota college to borrow up to $4,500 each of the first two years and up to $6,000 for
each of the last two years. Eligibility for this loan is not based on financial need;
however, students must have a credit-worthy cosigner. Money is borrowed directly from the
state of Minnesota at a variable interest rate. Interest must be paid on a quarterly basis
while a student is in school. Interest payments start within 90 days of the disbursement
of the loan. Payment of principal and interest begins the 13th month after graduation. |
