Information About Student Loans
Student loans are often used to fill the gap between funds available and the amount due on a student bill. Students are automatically considered for Federal Direct Subsidized and Unsubsidized loans upon timely completion of their FAFSA. There are many loan programs available. Always review the terms carefully, including interest rates, when you need to begin repayment, and fees. Borrower Rights and Responsibilities should also be reviewed before taking out student loans.
Federal Direct Loans:
Federal Direct Subsidized Loans– these loans are need-based. The government pays the interest on the loan while students are enrolled half-time and during deferment. Amount eligibility varies based on academic grade level.
Federal Unsubsidized Loans– these loans are not need based. The student either pays interest while enrolled, or defers until after graduation (in this case, the deferred interest is added to the principal of the loan).
Federal Direct PLUS Loans– these loans are fixed-rate loans to parents of undergraduate dependent students. There is a 10 year repayment schedule. A minimal check of borrower’s credit history is required.
Current interest rates and fee information are available for review on the Financial Aid website.
Federal Direct loans require a master promissory note to be completed online. You will need your FSA ID.
Entrance and Exit Counseling is also required for students taking out Federal Direct Loans. This entrance counseling must be completed before loan money will be dispersed to your account. For more information on Entrance and Exit Counseling, see the Financial Aid website.
Federal Perkins Loan:
Federal Perkins Loans is a loan for low-income students. Students are automatically considered for this scholarship if they apply for financial aid. Early application increases the chance of receiving a Perkins Loan as funds are limited.
Alternative Loan Programs:
Alternative Loans are loans taken out through private organizations to fill remaining gaps between available money, and account balances. Most of these loans are credit-based, and will vary widely in terms. Borrowers should very carefully review all terms before taking out an alternative loan.
For a listing of Alternate Loan companies, please see the link provided by financial aid.
Other Student Loan Information:
The Finance Authority of Maine (FAME) has important information about loans, including a repayment estimator, information about repayment options, loan delinquency and default, and loan consolidation and repayment.
If you have yet to take out a student loan, you can input hypothetical loan amounts to determine repayment terms by using a Loan Repayment Calculator.