Federal Direct Loans
The Federal Direct Loan is the cornerstone to any borrowing that takes place at Ursinus College. There are two types of Federal Direct Loans: subsidized and unsubsidized.
The subsidized loan is a need-based loan with the accruing interest paid by the federal government during your in-school, deferment, and grace periods*. The principal is also deferred while the student is enrolled at least half-time. The fixed interest rate on the subsidized loan first disbursed between 7/1/24 – 6/30/25 is 6.53%. The rate is effective 7/1/24.
*If you receive a Federal Direct Subsidized Loan that is first disbursed after 7/1/12, you will be responsible for paying any interest that accrues during your grace period. If you choose not to pay the interest that accrues during your grace period, the interest will be added to your principal balance.
The unsubsidized loan is available to students who do not demonstrate need to qualify for the subsidized loan or whose parents do not qualify for the Federal Direct Parent PLUS Loan Program. The principal payment is deferred while the student is enrolled at least half-time; however the interest which begins accruing at disbursement is the responsibility of the borrower. The fixed interest rate on the unsubsidized loan first disbursed between 7/1/24 – 6/30/25 is 6.53%. The rate is effective 7/1/24.
The chart below indicates the level of borrowing by class under the Federal Direct Loan Program. The maximum possible subsidy is not an additional loan amount on top of the limit.
| Academic Level | Dependent Combined Subsidized and Unsubsidized Limit | Independent Combined Subsidized and Unsubsidized Limit | Maximum Possible Subsidized Portion |
|---|---|---|---|
| Freshman | $5,500 | $9,500 | $3,500 |
| Sophomore | $6,500 | $10,500 | $4,500 |
| Junior or Senior | $7,500 | $12,500 | $5,500 |
Repayment of Federal Direct Loans begins six months after the student graduates or drops below half-time enrollment. (Note: Full-time enrollment equals twelve credit hours per semester and half-time enrollment equals six credit hours per semester).
Dependent undergraduate students whose parents are not deemed creditworthy for the Federal Direct Parent PLUS loan program are eligible to borrow an additional $4,000 Federal Direct Unsubsidized Loan as a freshman and sophomore, and an additional $5,000 Federal Direct Unsubsidized Loan as a junior and senior.
Please note that you pay a loan origination fee that is 1.057% of the principal amount of your Federal Direct Loan. The fee is deducted from each loan disbursement, so the loan amount that is actually credited to your account is less than the amount you have borrowed.
Federal Direct Parent PLUS Loans and Private (Alternative) Loans
Over the next few months, you and your family will be finalizing the way you plan to finance your college education. You may be awarded scholarships, grants, and/or federal loans. Increasingly, families find that, even after all these means are exhausted, additional funding is still needed. There are several options that could be explored. Two common ones are briefly compared below:
Feature |
Federal Direct Parent PLUS Loan |
Private Loan |
|---|---|---|
Borrower Eligibility |
Parent with dependent student |
Student (co-signer is often recommended or required) or parent |
Loan Payments |
Standard repayment is 10 years; other repayment plans available |
Repayment term determined at time of application; typical options range from 5 to 20 years |
Payment Insurance |
Discharged in the event of total and permanent disability or death |
None |
Interest |
Fixed rate |
Fixed or variable rates available |
Approval Criteria |
Borrower credit history |
Credit history and debt-to-income ratio |
Application |
Valid for 6 months from time of submission; must reapply each year |
Loan approval lengths vary by company; most companies require a new application each year |
In-school Deferment |
Yes |
Offered by most companies; determined at time of application |
Prepayment Penalty |
No |
Most lenders have no penalty |
It is important to compare these and other options to ensure that you choose the best option(s) for your family. You may select one financing source or a combination of sources to close the funding gap. NOTE: When applying for a Parent PLUS or alternative loan, it is strongly recommended to request funds for the full academic year.
To apply for a Federal Direct Parent PLUS Loan, the parent borrower will log in to https://studentaid.gov to complete an application.
Information on private loans can be found at https://www.elmselect.com. Applications will be filled out directly with the lender.
Loan Practices for Private (Alternative) Loans
1. Lender Principle & Guidelines
The College does not have a list of preferred private lenders. We do provide an interactive loan comparison tool found at https://www.elmselect.com which may provide some private loan options that fit your needs.
2. Gift/Trip Prohibition
All College employees must refrain from accepting any personal gift, meal, or trip from a lender that exceeds a nominal value. The College may accept gifts on behalf of students in the form of scholarships or grants as long as the gift is disclosed and does not result in preferential treatment.
3. Revenue Sharing Prohibition
The College will not receive anything of any value from a lender in exchange for preferential treatment or a competitive advantage of any kind.