Types of Loans

Federal Direct Loan

Funded by the federal government and administered by IUP.

There are two types: Subsidized loans are based on financial need, determined by taking the difference between the cost of education and the Expected Family Contribution. Unsubsidized loans may be awarded regardless of need.

Eligibility: Based on students’ cost of education, Expected Family Contribution (calculated from the FAFSA), and other aid resources. Students must be enrolled at least half-time in a given semester: 6 credits of undergraduate level coursework for undergraduate students and 4.5 credits of graduate level coursework for graduate students.

Amount: Undergraduate students are limited in the amount they can borrow each academic year based on grade level.

Important information for first-time undergraduate Direct loan borrowers. New federal regulations may limit the amount of time you are eligible to borrow Subsidized Direct loans. For more information, please read the U.S. Department of Education’s announcement. 

Graduate students are eligible to borrow up to $20,500 during an academic year, with an aggregate borrowing limit of $138,500.

Terms: Subsidized loan: requires no payment of principal and interest is fixed at 4.45 percent for the 2017–18 academic year. Unsubsidized loan: Interest accrues while the student is enrolled and during the six-month grace period before repayment begins. Interest is fixed at 4.45 percent for undergraduates and fixed at 6.00 percent for graduate students for the 2017–18 academic year.

To apply:

• Students are automatically considered for the Direct Loan when they file the FAFSA.
• Student data and loan information will be sent to the National Student Loan Data System (NSLDS) once the student has registered at least half-time for a term or academic year. This information will be accessible by guaranty agencies, lenders, and other institutions determined to be authorized users of the system.
• An electronic Master Promissory Note (eMPN) must be completed before any loan funds are disbursed. The Financial Aid Office will notify students via their IUP e-mail account or by letter to complete the eMPN.
• First-time Direct Loan borrowers must complete Direct Loan Entrance Counseling before any loan funds are disbursed.
• Each Federal Direct loan will have an origination fee deducted from the amount of the loan. The fee is taken from the U.S. Department of Education before funds are sent to the school. For loans first disbursed by September 30, 2017, origination fee is 1.069 percent. For loans first disbursed on October 1, 2017, origination fee is 1.066 percent.
  

Federal Direct PLUS Loans: Parent and Graduate Student

Eligibility: Parents of dependent undergraduate students and graduate students.

Amount: Amounts up to the cost of education minus other financial aid may be borrowed if the student is enrolled on at least a half-time basis (6 credits of undergraduate level coursework per term for undergraduates; 4.5 credits of graduate level coursework per term for graduate students).

Terms: Interest rate is fixed at 7.00 percent for the 2017–18 academic year. Repayment of principal and interest begins 60 days after the funds are fully disbursed for the loan period. Some limited deferment provisions are available. For graduate students, repayment can be deferred until after they graduate or drop below half-time enrollment (4.5 credits).

To apply:

• The 2017–18 PLUS application was made available on July 17, 2017.
• A FAFSA must be on file, and the parent or graduate student must complete the PLUS electronic application. To log in, you’ll need your FSA ID (the same FSA ID you used to sign the FAFSA electronically).
• You will be notified of the credit decision immediately. The Financial Aid Office receives electronic notification and will process the application within five to seven business days.
• A credit check is valid for 180 days, so you should not apply any earlier than 90 days before the start of a semester.
• If your credit is approved, you’ll be required to complete the electronic Master Promissory Note (eMPN) for the PLUS Loan.
• Credit approval is based on the absence of an adverse credit history, which is defined as being more than 90 days late on one or more debts greater than $2,085 as of the date of the credit report or having one or more debts placed in collection or charged off during the two years preceding the date of the report. Applicants with an adverse credit history who are subsequently approved by obtaining an endorser or appealing the credit denial are also required to complete PLUS Loan Counseling.
  
• Borrower data, student data, and loan information will be sent to the National Student Loan Data System (NSLDS) once the student has registered at least half-time for a term or academic year. This information will be accessible by guaranty agencies, lenders, and other institutions determined to be authorized users of the system.
• Graduate student borrowers (who have not previously had a PLUS Loan) must also complete Entrance Counseling.
• If credit is denied for parents of a dependent undergraduate student, the student may be eligible for additional funding in unsubsidized Direct Loan. The Financial Aid Office will automatically review a student’s record for eligibility. If credit is denied for a graduate student, he or she may appeal the credit decision or apply with an endorser/cosigner.
• Each PLUS loan will have an origination fee deducted from the amount of the loan. The fee is taken from the U.S. Department of Education before funds are sent to the school. For loans first disbursed by September 30, 2017, origination fee is 4.276 percent. For loans first disbursed on October 1, 2017, origination fee is 4.264 percent. 

Alternative/Private Loans

We strongly recommend that all students apply for federal funding each year by filing the FAFSA and consider borrowing from federal loan sources before they borrow from private student loans. The terms of the federal student loans are generally better.

See more information on alternative private loans.