Student Loans

Student Loans

There are many ways to finance a world-class private education. You can borrow federal direct student loans or alternative loans to help pay for your schooling. Federal direct loans often do not require payment until after you graduate and offer reasonable interest rates. 

Find the loan type that works best for you.

Parents can help support their student’s education by borrowing a federal direct loan. These loans often do not require repayment until your student graduates and come with reasonable interest rates. Explore the available plans to find the one that best fits your needs.

Parent PLUS Loan

Parent PLUS Loan: Biological or adoptive parents of a dependent undergraduate student may apply for a Federal Direct PLUS loan to help meet the student’s attendance cost, which is not covered by other financial aid. The Free Application for Federal Student Aid (FAFSA) is required, and parents must complete a parent PLUS Loan application at studentaid.gov.

Graduate PLUS Loans

The Federal Graduate PLUS Loan program allows graduate and professional students to borrow at a lower fixed interest rate after the unsubsidized loan eligibility has been exhausted. The Federal Direct Graduate PLUS Loan can be used to pay for the total cost of attendance minus any financial aid you’ve been awarded. The Graduate PLUS Loan largely depends on the borrower’s credit rating and history. Graduate students must complete a Grad PLUS Loan application at studentaid.gov.

Credit History

Parents must also pass a credit check when applying for the PLUS loan. If a parent’s application for a PLUS loan is denied based on the borrower’s credit history, the student may become eligible for an additional unsubsidized student loan. Freshmen and sophomore students can borrow up to $4,000 in a Federal Direct loan, while juniors and seniors can borrow up to $5,000.

Interest Rates

Federal Direct PLUS loans disbursed on or after July 1, 2022, and before July 1, 2023, have a fixed interest rate of 7.54%. Interest is charged from the disbursement date until the loan is paid in full.

PLUS Loan Entrance Counseling

  • In January 2015, the Department of Education changed adverse credit history provisions to determine an applicant’s eligibility for a Direct PLUS Loan.
  • Parent and Graduate PLUS loan applicants who qualify for a Direct PLUS Loan by obtaining an endorser or due to a credit appeal decision are now required to complete PLUS Loan Counseling. Applicants subject to the new counseling requirement must complete the counseling at studentaid.gov.

Origination Fees

The Federal Government charges an origination fee for Direct Loans. This fee is a percentage of the total loan amount and is deducted from each loan disbursement. You are responsible for repaying the entire amount you borrow.

Loan Type

First Disbursement Date

Loan Fee

Federal Direct PLUS Loan

On or after 10/1/20 and before 10/1/23

4.228%

 

On or after 10/1/19 and before 10/1/20

4.236%

Federal Direct Loan Program

The Federal Direct Loan Program has low-interest loans that undergraduates, graduates, and parents of dependent students may obtain from the Department of Education. This program includes the Federal Subsidized Stafford Loan, the Federal Unsubsidized Stafford Loan, and the Federal PLUS Loan. Congress created these loan programs to help all eligible students and parents pay for the student’s educational expenses with and without financial need.

Alternative Loan 

Alternative loans are private educational loans that may be secured by individuals, such as parents and students (with a parent as a co-signer), to help bridge the gap between the actual cost of education and the amount the government allows you to borrow in its programs. Private lenders offer private loans, and there are no federal forms to complete. Eligibility for private student loans often depends on your credit score. Lenders offer fixed and adjustable rates as well as multiple repayment options. You may choose any lender of your choice. For your convenience, we offer FASTChoice as an alternative loan tool to help counsel and compare different lenders available. 

How to Apply for an Alternative Loan

Students or parents must apply directly with the lender of their choice.  Most students will be required to have someone co-sign the loan application.  Interest rates for loans are determined by the lender and are based on the student and co-signer credit worthiness.

You may choose any lender of your choice. For your convenience, we offer this handy FASTChoice alternative loan tool that walks you through important information about types of funding and money management. It also presents your new responsibilities if you decide to borrow money.

After you review this information, you will see a list of lenders offering loan products in a way that makes it easy to compare them.

PLUS Loan Application Process

The University of Lynchburg has recently streamlined the Parent and Graduate PLUS Loan application process, which is now completed on studentaid.gov.

Parents and Students must first fill out and submit the FAFSA.

Log into studentaid.gov. PLUS Parent Loan borrowers must sign in using their FSA ID, not the student’s.

  1. Select Loans and Grants.
  2. Select PLUS Loans: Grad PLUS and Parent PLUS.
  3. Select Learn More next to I am a Parent of a Student.
  4. Begin the Parent PLUS Loan Application.
  5. Confirm you have not placed a freeze on your credit report.
  6. Select an award year (2023-2024 for students starting in Fall 2023).
  7. Confirm the student’s name and information.
  8. Select your deferment and refund preferences.
  9. Select the school you want to notify (Note: Select the University of Lynchburg, not the Virginia University of Lynchburg).
  10. Indicate the specific amount you wish to borrow.
  11. Select the Loan Period for the PLUS Loan (To split the loan between Fall and Spring, select June of 2023 to May of 2024).
  12. Complete all sections of the Borrower Information.
  13. The Department of Education will evaluate your credit and approve or deny the application. You will receive an immediate response.
  14. If your credit is approved, you will be given instructions for completing a PLUS Loan Master Promissory Note (MPN) on studentaid.gov if you have not already completed one in the prior year.
  15. The Federal Direct Loan program will forward the approved PLUS Loan application to the Office of Financial Aid to verify enrollment and eligibility.
  16. Please be aware it may take up to 48 hours for the University of Lynchburg to receive your submitted application.
  17. The federal government will send the “Notice of Loan Guarantee and Disclosure Statement” to you, the borrower.
  18. The federal government will send loan disbursements to the University of Lynchburg in accordance with the disclosure statement schedule.

If the PLUS Loan is denied for credit reasons, you may choose to obtain an endorser or provide documentation to the Department of Education to appeal the credit decision. Contact the Department of Education at 1.800.433.3243 to start the appeal or get detailed information regarding the endorser addendum.