Education loans are financial aid the student borrows and repays to a lender, with one exception – the Parent PLUS Loan, where a parent is the borrower. Federal loans are considered financial aid because the federal government provides the lender a guarantee that the loan will be paid.
To be considered for a Federal education loan:
- Student must file the FAFSA
- Student must be accepted by Beacon College
- Student must be enrolled in a degree seeking program
- Student must register for at least half time status
Alternative loans do not carry a Federal guarantee. They are considered financial aid because Beacon College must certify three things to the lender:
- Student is accepted at Beacon College
- Student is enrolled in a degree seeking program
- Amount being borrowed is within the student’s Cost of Attendance less other financial aid
Note: Before you accept or refuse a loan, determine what your expenses and your resources will be for the upcoming year so as not to borrow more than you need. You may accept any amount up to the offered award amount.
Federal Stafford Loans
Stafford Loans come in two types. For Subsidized Loans, the government pays the interest while the student is in school. Eligibility is based on financial need. For Unsubsidized Loans, all interest is paid by the borrower; however, interest payments may be deferred by adding it to the principal.
Federal regulations impose both annual and lifetime limits on student borrowing under the Stafford Loan program. There is a special limit on Subsidized Loans. There are also limits on the combined borrowing of Subsidized and Unsubsidized Loans. In addition, there are separate limits for Freshman and Sophomore students. These limits are addressed below.
The Federal PLUS Loan is one option for closing the difference between any financial aid that has been awarded and the total estimated cost of education, as approved by the Financial Aid Office.
PLUS Loans are based on credit standing of the borrower rather than on financial need. To learn How To Apply, go to Federal PLUS loans.
Federal Stafford Loans – Undergraduate Annual Limits:
The annual limits on Subsidized Stafford Loans are identical for both dependent and independent students with financial need:
Freshman – $3,500 per aid year
Sophomore – $4,500 per aid year
Junior/Senior – $5,500 per aid year
Dependent students are now automatically eligible for $2,000 in Unsubsidized Loans. If the dependent student’s parent has also applied for and been denied credit for a Parent PLUS loan, then the student’s Unsubsidized Loan eligibility limit increases to the same amount reflected below for independent students with financial need.
Independent students with financial need may borrow an additional $6,000 in Unsubsidized Loans as a Freshman or Sophomore, or $7,000 as an upperclassman.
Independent students without financial need may borrow up to:
$9,500 as a Freshman
$10,500 as a Sophomore
$12,500 as an upperclass student in Unsubsidized Loans.