Student loans are investments by students in themselves. Like any other investment, they need to be analyzed, understood, and approached with a long-term focus. Financial aid packages that include student loans have enabled college graduates all across our nation to reap the long-term benefits of a college education that would not have been possible without access to student loans. Thoughtful and disciplined college financial planning, combined with responsible student borrowing, are often the keys to a student's access to a variety of college choices. The three loan programs discussed on this page are: Federal Perkins Loans, Federal Stafford Loans, and Private Educational Loans. Every student does NOT qualify to receive each of these loans. Any student loan is a serious obligation. Receipt of loan funds means that you have the legal responsibility for full repayment of the loan by a certain future date. Repayment terms, interest rates, and borrowing limits vary from program to program. Student loans are your legal obligation to repay, not your parents. You will be signing all promissory notes and legal documents.
The federal government requires that first-time Federal Perkins Loan and Federal Stafford Loan borrowers participate in an "entrance interview" before they receive their loan proceeds. Entrance interviews are a method of educating the borrower as to the interest rate, repayment terms, disbursement procedures, and other details involved with the loans. All entrance interviews are conducted by the College. For first-time Federal Perkins Loan borrowers, students are mailed an entrance interview packet during the summer. They must read, complete, sign, and return certain documents from this packet before the start of classes. For first-time Federal Stafford Loan borrowers, entrance interviews may be done on-line by clicking: Stafford Loan Entrance Interview! Federal Perkins Loans are one part of the federal government's three Campus-based aid programs (Federal Work-Study and SEOG Grants being the others). The federal government gives colleges varying levels of Perkins Loan funds to spend within specific parameters. For this reason, some colleges have much more Federal Perkins Loan funds to award than other colleges. Elizabethtown College receives a modest Perkins Loan allocation so the number and amounts of awards we may offer from this fund are limited. Our Perkins Loan awards are normally offered to our most needy students in the amount of $500 - $1,000 per year (for the freshmen and sophomore year). Below are specific details regarding this loan: Interest rate is fixed at 5%; No principal or interest payments due until 9 months after graduating or leaving school; Cancellation provisions exist for certain types of employment or service; $40 per month minimum repayment; Maximum 10 year repayment term. Students will be notified of their eligibility for a Perkins Loan on their financial aid award letter. Students awarded and accepting Federal Perkins Loans will be sent a detailed packet of Perkins information during the summer. Students sign their Perkins Loan promissory notes at the very beginning of the Fall semester. The same promissory note will be adjusted and signed in future years to reflect additional borrowing if the student maintains eligibility for the Federal Perkins Loan program. A typical Federal Perkins Loan borrower at Elizabethtown will incur between $1,000 - $3,000 of Perkins Loan indebtedness. Sample repayment information for these students is contained below: Total Loan Amount Number of Payments Monthly Payment Total Interest Paid Total Repaid $1,000 26 1 $40.00 $18.24 $58.24 $1,058.24 $2,000 56 1 $40.00 $7.40 $247.40 $2,247.40 $3,000 90 1 $40.00 $4.57 $604.57 $3,604.57 As part of the financial aid package, Elizabethtown will award every student a Federal Stafford Loan. The Stafford Loan program is the federal government's main loan program and accounts for more financial aid dollars in our nation than any other source. The federal government has determined maximum annual loan limits that apply to every college student at all colleges. These limits are listed here: A note about Subsidized versus Unsubsidized loans: The type of Federal Stafford Loan a student qualifies to receive is governed by a federal formula that takes into account the student's financial need and the cost of the college they are attending. It is very possible for a student to receive a Subsidized Loan at one school and an Unsubsidized Loan at another school. The formula a school must adhere to looks like this:
Cost of Education At Elizabethtown, students will be notified of their eligibility for a Stafford Loan on the financial aid award letter. To accept the Stafford Loan, the student simply signs the letter and returns it to our office. Detailed information about selecting a lender will be mailed to the student after May 1st. Students may choose any lender that participates in the federal loan program. *This loan program is regulated by the federal government and is subject to change. For students who borrow the annual maximum Federal Stafford Loan each year and graduate in four years, their cumulative Stafford Loan borrowing will equal $27,000. Some sample repayment information is contained below using a 10-year payment period at an interest rate of 6.8%: Total Loan Amount Number of Payments Monthly Payment Total Interest Paid Total Repaid $10,000 120 $115.00 $3,810.040 $13,810.00 $15,000 120 $173.00 $5,714.00 $20,714.00 $17,125 120 $197.00 $6,524.00 $23,649.00 $20,000 120 $230.00 $7,619.00 $27,619.00 $23,000 120 $265.00 $8,762.00 $31,762.00 If your family has exhausted more attractive financing options such as the AMS Payment Plan and the Federal PLUS Loan, then you might wish to cover all, or part, of your cost with a private loan that the student borrows. The student should be fully aware of the additional debt that will be incurred and should be making an educated decision when borrowing supplemental loan funds. Private loans are borrowed by the student, usually with a parent as the co-borrower.
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ENTRANCE COUNSELING:
Federal Perkins Loan:
Federal Stafford Loan:
The loan amounts listed above are for dependent students. These students may borrow a maximum of $31,000 through the Stafford Loan program towards their undergraduate degree (no more than $23,000 of which can be subsidized). *Graduate students are considered independent by the federal government. The graduate loan limit is per year $20,500 with a maximum of $8,500 Subsidized. Below are more details regarding Federal Stafford Loans:
-EFC
-Other Financial Aid
Subsidized Loan Max.
Our office will initiate the official loan application by certifying Stafford Loans in an "electronic batch." As a result of the batch certification, the student will be mailed a Master Promissory Note (MPN) in June. Since the loan was already certified by Elizabethtown, the student only needs to provide the name and address of two references and sign and date the MPN. The MPN gets returned to the address on the promissory note (usually the lender's box number at PHEAA in Harrisburg). The MPN is a 10-year note so the student most likely will never have to sign an MPN again. Future Stafford Loans are determined by returning signed award letters to the College.
Private Loan Programs:
The Financial Aid Office strongly encourages you to borrow Federal student loans first and then consider the AMS Payment Plan and/or the PLUS Loan before applying for a private educational loan. You may compare benefits of the PLUS and the private educational loan at http://www.aessuccess.org/find_aid_for_school/alternative_loans/index.shtml
Below is a list of lenders that offer private education loans. There are many other lending institutions that offer private education loans. We caution you to beware of student loan advertisements on Cable TV and the Internet that seem “too good to be true”. Be sure to review eligibility, benefits, features, interest rates, fees and repayment options with the lender before applying. The borrower must initiate the application process.
Signature Student Loan
CITIZENS BANK
Signature Student Loan
(P) 1-800-708-6684
CITIBANK
CitiAssist Loan
(P) 1-800-967-2400
GRADUATE PLUS LOANS FOR 5TH YEAR OT STUDENTS:
A Graduate PLUS Loan is a non need-based loan option for all, or part, of the annual cost of college. A Graduate PLUS Loan is provided by a private lender to a graduate student. Students must be U.S. citizens or eligible non-citizens. Although a Federal Graduate PLUS Loan is ultimately insured by the federal government, approval of this loan is determined solely by the lender.
Contact the Financial Aid Office for additional information about the Graduate PLUS Loan.
Exit Counseling:
The federal government requires that all Federal Perkins Loan and Federal Stafford Loan borrowers participate in an "exit interview" before they graduate or leave school. Exit interviews educate the borrower as to the interest rate, repayment terms, cumulative loan amounts, deferment and forbearance options, grace period, and other details involved with the loans. All exit interviews are conducted by the College. Students leaving the College before their anticipated graduation date must contact our office so we may conduct Exit Counseling. Refer to the Information for Graduates page to learn more about what is offered to our alums!
Contact our office:
Financial Aid Office
Elizabethtown College
One Alpha Drive (Zug 208)
Elizabethtown, PA 17022
(phone) 717-361-1404
(fax) 717-361-1514
