Federal Stafford Loan
A Stafford Loan is a federal student loan with a fixed interest rate.
There are two types of Stafford Loans: subsidized and unsubsidized. Eligibility for the loan is determined through the FAFSA (Free Application for Federal Student Aid). The Financial Aid office notifies students of the specific amounts for which they qualify. Repayment begins six months after the student graduates or drops below half-time enrollment.
Subsidized Stafford Loan
A Subsidized Stafford Loan is need-based loan program with a fixed interest rate of 4.53% for 2019-20. Both principle and interest are deferred while the student is enrolled at least half-time (5 hours or less).
Unsubsidized Stafford Loan
Students who do not qualify for all or part of the need-based Subsidized Stafford Loan may borrow through the Unsubsidized Stafford Loan. The fixed interest rate is 6.08%. The federal government does not make the interest payments on the unsubsidized loan. The student may choose to make interest payments on the loan or allow the interest to accrue. However, the principle of the Unsubsidized Stafford Loan is deferred while the student is enrolled at least half-time (5 hours or less).
For more information concerning Stafford loans and Plus loans please click here.
Federal Parent Plus Loan
With this Federal loan program, parents are able to apply for a loan up to the cost of attendance minus any financial aid the student is receiving. The interest rate is fixed at 7.9% with an origination fee of 4%. Approval is based on a credit check. Standard repayment begins 60 days after the loan is fully disbursed and parents have up to 10 years to repay the loan. Parents also have the option to request a deferment of repayment while the student is enrolled at least half-time.
For more information please visit studentaid.ed.gov.
To apply for a Parent Plus Loan please visit https://studentloans.gov/myDirectLoan/index.action
Private Loans
Alternative Student Loans are available for families seeking additional financing options.
Alternative Loans are non-Federal loans that are in the student's name and, in most cases, require a cosigner. Boston Baptist College encourages parents and students to first consider the Federal Direct Parent PLUS Loan to cover any outstanding educational expenses prior to considering an alternative loan. In general, a Direct PLUS Loan provides preferable interest rates and more flexible repayment options as well as options for loan cancellation that are not offered by most alternative loan products. If you choose to pursue an alternative loan, make sure to compare the costs associated with various loans before completing an application. Interest rates, fees, repayment periods, and other benefits can vary significantly between loans. While many educational loans are available with no fees and interest rates less than 10%, other programs exist with fees of over 5% and interest rates over 14%.
To aid students and families in the process of choosing a private lender, Boston Baptist College has compiled a Preferred Private Lender List.To help you compare the various alternative loans, consider asking the following questions of potential lenders:
Loan Terms
What is the interest rate? Is it fixed or variable, and how is it determined?
How often is the interest rate adjusted?
How much are the origination fees and how are they charged?
Will I be required to pay the interest while enrolled in school?
When does the interest rate start to accrue and will it be capitalized?
Repayment
When does repayment start?
Is there a grace period before repayment begins?
What is the monthly minimum payment?
What is the maximum repayment period?
Am I allowed to pay on the interest while I'm in school?
Are there any loan repayment benefits or reductions? If so, will they remain if a future payment is late?
Can I defer repayment of the loan if I go to graduate school?
Do you apply any penalties or charges for prepayments or early payoff?
Please note: Lenders may have several different kinds of loans that you can choose from. If the loan proceeds are being paid directly to the student rather than the school, then this is a "Direct to Consumer Loan." Generally, these are not the best loans for you.They often charge higher interest rates and/or higher up front fees. They are inviting because they are often easier to apply for and disbursement is sooner. They often do not have the normal protections and payment provisions of a regular school loan certified and disbursed to the school. Be very careful if you are choosing this type of loan. They were created for non-degree seeking students who cannot get regular school loans.You will find more information about Alternative Loans here.
