All of the following programs allow for early prepayment of principal without penalty.
Federal Perkins Loan
This low-interest federal loan is offered through Wheaton to students with significant financial need. No interest is charged and no payments are required until nine months after the student leaves school. Once repayment begins, interest accrues at 5%. The minimum monthly payment is $40 with a maximum 10-year repayment. This loan may be deferred if the student attends graduate school full time. Wheaton determines the size of a student's Perkins Loan based on available funding; awards range from $500 to $4,000 per year. The student signs a master promissory note and completes entrance counseling prior to the first disbursement of the loan.
Federal Direct Subsidized Stafford Student Loan
This federally subsidized direct student loan is funded directly from the Federal Treasury. The 2012-2013 interest rate is 3.4%. The minimum monthly payment is $50 and the maximum repayment period is 10 years. In addition to the interest, students pay a loan origination fee that is a percentage of the principal amount of the loan. Repayment of the principal and interest begins six months after the student leaves school, graduates, or drops below half-time attendance. Repayment may be deferred if the student goes on to full-time graduate school. Maximum eligibility for freshmen is $3,500, sophomores, $4,500, and juniors and seniors, $5,500.
All students are also eligible for an additional $2,000 in Unsubsidized Stafford loan funding annually. Students who wish to borrow their maximum Direct Stafford loan should contact our office. Students who apply for alternative financing and have not maximized their federal loan eligibility will be awarded the increased Stafford loan limits before certifying the students remaining federal eligibility with a higher cost private loan.
Federal Direct Unsubsidized Stafford Loan
Students who are not eligible for the Subsidized Direct Stafford Loan program are still eligible to borrow a Stafford loan without the federal interest subsidy. Although repayment of principal is deferred during enrollment, interest does accrue and the student borrower has the option of making interest payments while in school, or having the accrued interest capitalized (added to the principal borrowed prior to the start of repayment). Freshmen may borrow up to $5,500 for the year, sophomores up to $6,500, and juniors and seniors up to $7,500 per year. Interest accrues at a fixed rate of 6.8%. In addition to the interest, students will pay a loan origination fee that is a percentage of the principal amount of the loan. Repayment of principal and interest begins six months after the student leaves school, graduates, or drops below half-time attendance. Repayment requires a minimum payment of at least $50 and extends for up to 10 years. Students who wish to apply for the Unsubsidized Direct Stafford Loan must complete the Free Application for Federal Student Aid (FAFSA).
All families who wish to borrow a federal PLUS loan must first complete a Free Application for Federal Student Aid (FAFSA).
The Federal Direct Parent Loan for Undergraduate Students (PLUS) program enables parents to borrow for higher education expenses through Federal Treasury. Direct PLUS loan regulation Direct PLUS loans borrowed on or after July 1, 2006 have a fixed interest rate of 7.9% Repayment of principal and interest begins after disbursement and continues for a maximum of 10 years. Parents can prepay all or part of the amount borrowed at any time without penalty. Eligibility for the Direct PLUS loan is determined by the total cost of attendance less any other aid received. The Federal PLUS loan is the most flexible of these parent-financing options. The Department requires that credit check be perform, for evidence of an adverse credit history. In the case where the parent is denied a PLUS loan due to adverse credit history, the student may qualify for additional funds from the Unsubsidized Direct Federal Stafford Loan program. A 4% origination fee is deducted from the total amount borrowed prior to disbursement. For more information regarding the Federal Direct PLUS Loan Program, click on the Federal PLUS loan link above.
National Student Loan Data System (NSLDS)
Your loan information will be submitted to the National Student Loan Data System (NSLDS), the U.S. Department of Education's central database for student aid. NSLDS receives data from schools, guaranty agencies, the federal Direct Loan program, and other Department of Education programs. NSLDS Student Access provides a centralized, integrated view of Title IV loans and grants so that recipients of Title IV Aid can access and inquire about their Title IV loans and/or grant data.