Federal Perkins Loan
The Federal Perkins Loan allows a student with financial need to borrow up to $16,000 during her or his undergraduate study at Shimer College. The maximum loan per semester at Shimer College is $2,000 or the amount of need, whichever is less. No interest is charged while the student is in school. Repayment of the loan at 5% interest begins nine months after the student leaves school. The minimum monthly payment is $40 and the entire loan must be paid within a ten-year period. Some circumstances provide you with an opportunity to cancel all or part of your Perkins Loan debt for certain types of employment or service. Under the Perkins Loan program, the school is the lender. Shimer’s Perkins Loans are managed by University Accounting Services, LLC (UAS). For more information on Perkins Loans see UAS’s FAQ.
Federal Direct Subsidized and/or Unsubsidized Loans
(Formerly, Stafford Loans) & PLUS Loans
The William D. Ford Federal Direct Loan (Direct Loan) Program is the largest federal student loan program. Under this program, the U.S. Department of Education is your lender. There are three types of Direct Loans available to you as an undeergraduate:
- Direct Subsidized Loans are loans made to eligible undergraduate students who demonstrate financial need to help cover the costs of higher education. The U.S. Department of Education pays the interest on a Direct Subsidized Loan while you’re in school at least half-time, for the first six months after you leave school (referred to as a grace period), and during a period of deferment (a postponement of loan payments).
- Direct Unsubsidized Loans are similar to Direct Subsidized Loans, but you are responsible for paying the interest on a Direct Unsubsidized Loan during all periods. If you choose not to pay the interest while you are in school and during grace periods and deferment or forbearance periods, your interest will accrue (accumulate) and be capitalized (that is, your interest will be added to the principal amount of your loan).
- Direct PLUS Loans are loans made to parents of dependent undergraduate students to help pay for education expenses not covered by other financial aid.
Accepting and Managing your Direct Loans - If you are a student taking out a Direct Subsidized Loan or a Direct Unsubsidized Loan, you must sign a Master Promissory Note (MPN) before you can receive your loan funds. An MPN is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the U.S. Department of Education. It also explains the terms and conditions of your loan(s); for instance, it will include information on how interest is calculated and what deferment and cancellation provisions are available to you. You will likely only need to sign an MPN once for all Stafford Loans you take out at Shimer. You can access your MPN at the Federal Governments Student Loan website using the same Personal Identification Number (PIN) you used for the FAFSA. Before you can receive your loan funds, you will also be required to complete entrance counseling, a tool to ensure you understand your obligation to repay the loan. Shimer also requires exit counseling for borrowers before they can graduate.
PLUS Loans - Parents of dependent students enrolled at Shimer may apply for a Direct PLUS Loan to help pay education expenses. The U.S. Department of Education makes Direct PLUS Loans to eligible borrowers. The borrower must not have an adverse credit history. The maximum loan amount is the student’s cost of attendance minus any other financial aid received. If a parent borrower is unable to secure a PLUS loan, the dependent Shimer student may be eligible for additional unsubsidized loans to help pay for his or her education.
Alternative Private Education Loans
As a general rule, students should only consider obtaining a private education loan if they have maxed out Federal Direct Loan borrowing. Students should also compare costs with the Federal PLUS Loan, as the PLUS loan is usually much less expensive and has better repayment terms. You can fins a comparison chart of alternative private education loans here.
After you graduate
Federal Direct Consolidation Loans allow you to combine all of your eligible federal student loans into a single loan with a single loan servicer. You can apply for a Direct Consolidation Loan at the Department of Education website.