Federal Loans
Federal Perkins Loans
The Federal Perkins Loan is a federally funded, need-based loan program that is administered by individual colleges and universities. UI&U is your lender under the Federal Perkins loan program. The interest rate is currently 5%, and no interest is charged while you are enrolled on at least a half-time basis and during your grace period. You must begin repayment of principal and interest nine months after you leave school.
First-Time Federal Perkins Loan Recipients
If you have been awarded a Federal Perkins Loan and are a first-time Federal Perkins Loan recipient at Union Institute & University you must complete a Federal Perkins Loan Master Promissory Note (MPN) and Federal Perkins Loan Contact form. If this applies to you, a Federal Perkins Loan MPN and Federal Perkins Loan Contact form will be enclosed with your award letter. You must complete, sign, and return these documents to our office before these funds can be disbursed to your student account. You may download and print the Federal Perkins Loan MPN and the Federal Perkins Loan Borrower Contact forms from our Web site. First-time and non-first-time Federal Perkins Loan recipients must return the Federal Perkins Loan Borrower Contact form to the Financial Aid Office with each new Federal Perkins Loan award.
Exit Interview Requirement
All Federal Perkins loan borrowers must complete a Perkins Loan exit interview when you leave school, drop below half-time status or do not register for a subsequent term. Our servicier for the Federal Perkins Loan program is University Accounting Service (UAS). UAS will send you an exit interview packet when you leave school or drop below half-time status.
Cancellation
Some Perkins Loan borrowers may have all or part of their loans canceled if they:
- Teach in specific fields and/or in designated schools in low-income areas;
- Work in Head Start programs;
- Work providing certain health care services;
- Serve as qualified professional providers of early intervention services;
- Work in child or family service agencies;
- Serve in the military during designated periods of national emergency;
- Perform volunteer services with the Peace Corps or ACTION programs; or
- Serve as law enforcement or corrections officers.
If a student’s loan is eligible for cancellation, a percentage of the loan will be canceled for each completed year of qualifying service or employment. More information on the Federal Perkins loan program is available on the Federal Student Aid Web site.
Federal Stafford and PLUS Loans
The Federal Family Education Loan Program includes the Federal Subsidized and Federal Unsubsidized Stafford Loan, the Federal PLUS loan, and Federal GradPLUS loan programs. The guaranty agency(ies) that guarantee FFEL loans may charge an origination fee and/or a guarantee fee for each loan made under the FFEL program. The amount of these fees is deducted proportionately from each loan disbursement and may not exceed a maximum amount specified by U.S. Department of Education regulations.
Beginning with the 2006-07 award year, the interest rate on the Federal Subsidized and Federal Unsubsidized Stafford Loan is fixed at 6.8%. The interest rate on the Federal PLUS loan and the GradPLUS loan is fixed at 8.5%. You must be enrolled at least half-time to receive a FFEL loan. (Note: Doctoral learners enrolled at UI&U must be enrolled full-time to receive a FFEL loan.)
Lender Choice
Union Institute & University participates in the FFEL program. This means that when you borrow a Federal Stafford or Federal Unsubsidized Stafford Loan, a Graduate PLUS loan, or a parent borrows under the Federal PLUS loan program, you will borrow from a FFEL lender. You may borrow a FFEL loan from any lender of your choosing. Choosing a lender means having to research the many benefits lenders offer under the federal student loan program (FFEL.) Much of this information can be found by searching the Internet or by visiting commercial lending institutions. For further information and to access lender information, please read “Online MPN and Entrance Counseling.”
Federal Subsidized Stafford Loans
The Federal Subsidized Stafford Loan is a need-based federal loan awarded to undergraduate, graduate, and professional students who demonstrate financial need up to their loan limit. The U.S. Department of Education pays the interest while you are in school at least half-time, for the first six months after you leave school, and during a period of deferment, which is a postponement of loan payments.
Federal Unsubsidized Stafford Loans
The Federal Unsubsidized Stafford Loan is a non-need-based federal loan awarded to undergraduate, graduate, and professional students up to their loan limit. You are responsible for the interest from the time a Federal Unsubsidized Stafford loan is disbursed until it is paid in full. You can pay the interest while you are in school or allow the interest to accrue and have the interest added to the principal amount of your loan. This means the interest will be capitalized.
Annual Federal Stafford Loan Maximums for Dependents, Present --July 1, 2007
| Dependent Undergraduates | Subsidized/Unsubsidized |
| First Year | $2,625 * |
| Second Year | $3,500 * |
| Third Year & Beyond | $ 5,500 |
* Important Note: Beginning July 1, 2007, the amount for first and second year students increases to $3,500 and $4,500 respectively.
Annual Federal Stafford Loan Maximums for Dependents Beginning July 1, 2007
| Dependent Undergraduates | Subsidized/Unsubsidized |
| First Year | $3,500 |
| Second Year | $4,500 |
| Third Year & Beyond | $5,500 |
Annual Federal Stafford Loan Maximums for Independents, Present --July 1, 2007
| Independent Undergraduates (and dependents whose parents are unable to borrow the PLUS) |
Base Subsidized & Unsubsidized | Additional Unsubsidized |
| First Year | $2,625 * | $4,000 |
| Second Year | $3,500 * | $4,000 |
| Third Year & Beyond | $5,500 | $5,000 |
| Graduate/Professional Students | $8,500 | $10,000 * |
* Important Note: Beginning July 1, 2007, the base subsidized/unsubsidized amount for first and second year students increases to $3,500 and $4,500 respectively. The additional unsubsidized amount for graduate and professional students increases to $12,000.
Annual Federal Stafford Loan Maximums for Independents Beginning July 1, 2007
| Independent Undergraduates (and dependents whose parents are unable to borrow the PLUS) |
Base Subsidized & Unsubsidized | Additional Unsubsidized |
| First Year | $3,500 | $4,000 |
| Second Year | $4,500 | $4,000 |
| Third Year & Beyond | $5,500 | $5,000 |
| Graduate/Professional Students | $8,500 | $12,000 |
“NEW” Graduate PLUS Loans
Beginning July 1, 2006, graduate and professional students will be entitled to borrow under the Federal PLUS loan program. A credit check is required. The interest rate on the Federal Graduate PLUS loan is fixed at 8.5%. You may be eligible for a Graduate PLUS loan if you are enrolled in a graduate/professional degree program on at least a half-time basis. (Note: Learners enrolled in the Doctoral Program at UI&U must be enrolled full-time to receive a Graduate PLUS loan.) With a Graduate PLUS loan, you may borrow up to the full cost of education, less other financial aid received.
You may apply for the Graduate PLUS loan on the Sallie Mae Web site . Click on: Loans for Graduate Students; Graduate Student Loans; PLUS loans for graduate and professional students.
VSAC borrowers can apply for the Graduate PLUS loan on the Vermont Student Assistance Corp. Web site. Click on: Graduate Students; New! Federal Loan for Graduate and Professional Students.
PLUS Loans for Parents
The Parent PLUS loan allows parents of dependent, undergraduate students to borrow up to the cost of attendance, less any financial aid. Beginning with the 2006-07 year, the interest rate on the Federal PLUS loan is fixed at 8.5%.Under the Parent PLUS loan program, a parent can borrow up to the full cost of education, less other financial aid received . A credit check is required.
First-Time Borrowers
If you are a first-time borrower at Union Institute & University under the FFEL Program, you must complete entrance counseling and a Master Promissory Note (MPN).You may complete the required FFEL entrance counseling and MPN online (see online instructions) or you may download and print the Entrance Counseling form and Federal Stafford Loan Master Promissory Note from our Web site. The MPN is a legal document. It is your promise to use the money for educational purposes and to repay the loan. The promissory note includes important information on repayment of your loan and how the interest rate is determined. The Master Promissory Note that you complete will allow you to borrow funds not only for this year but also for each year you attend Union Institute & University and borrow under the FFEL program. You are not required to borrow for subsequent years during which you attend UI&U. The entrance counseling requirement ensures that you understand your rights and responsibilities as a federal student loan borrower.
Online MPN and Entrance Counseling
If you have received your award letter from the Financial Aid Office and VSAC is not your lender, you may complete your MPN and entrance counseling online. Click here to complete your online MPN and entrance counseling. You will directed to the Sallie Mae Web site to register and set up an account. Follow the steps to complete entrance counseling. At the conclusion of the session, you will be presented with a confirmation screen that you should print for your records. Once you have completed the entrance counseling session, you will be directed to complete your Master Promissory Note (MPN).Once you have completed your Master Promissory Note, your MPN will be submitted to Sallie Mae for processing. The Office of Financial Aid will receive electronic notification that you have completed this process. Note: If you do not wish to complete your MPN and entrance counseling online, you may download and print a paper MPN and paper Entrance Counseling form from our Web site.
VSAC Borrowers – Entrance Counseling and the Master Promissory Note (MPN) Requirements
If your lender is the Vermont Student Assistance Corporation (VSAC), you may complete your entrance counseling online at Mapping Your Future. Online completion of the MPN is not currently available. You may download and print the MPN form from our Web site. You must complete and submit the MPN to the Office of Financial Aid for the continued processing of your Federal Stafford loan.
Exit Interview
Learners who borrow under the FFEL program are required to complete a loan exit interview when they withdraw or drop below half-time status. Learners who do not officially withdraw but who do not register for a subsequent term, those on an approved academic leave of absence, are considered withdrawn for financial aid purposes and are required to complete the loan exit interview.
Consolidation Loans
You can consolidate or combine multiple federal student loans with various repayment schedules into one loan called a Consolidation Loan, making a single monthly payment. With a consolidation loan, your monthly payments might be lower, you can take a longer time to repay (up to 30 years), and you will receive a fixed interest rate. There may be some disadvantages to obtaining a consolidation loan, such as the payment of more interest because you have a longer time to repay the loss of some borrower benefits such as interest rate discounts, principal rebates, and the loss of some discharge or cancellation benefits.
Talk to the holder of your loan(s) and carefully review your options before you consolidate. You will receive information about loan consolidation during your entrance and exit counseling sessions. Once a consolidation loan is made, it cannot be revoked for any reason because the underlying loans that were consolidated no longer exist. You can read more about loan consolidation in the publication Repaying Your Student Loans. You can also request a paper copy of this publication by contacting our office.
Private/Alternative Student Loans
There are many private or alternative student loan sources to help with your educational costs. Most private or alternative student loan programs consider your credit history and may require you to have a co-signer. The Sallie Mae Signature Loan is one such alternative loan program. You may apply for the Sallie Mae “Signature Loan ” and the “Tuition Answer ” loan on the Sallie Mae Web site; the “Advantage Loan ” from the Vermont Student Assistance Corporation (VSAC) Web site; and the “No Fee” loan from the US Bank Web site. You will find many, many more lenders in the private student loan arena by searching the Internet.
