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Federal Direct Loans

The Federal Direct Loan is available to undergraduate students to assist with paying college costs. The type of Federal Direct Loan a student is awarded is based on results of the Free Application for Federal Student Aid (FAFSA).

Students must file the FAFSA prior to making a Federal Direct Loan. A student's loan eligibility is listed on his or her Award Notification from Augustana.

If subsidized, the loan is based on need, and interest is paid by the federal government while the student is enrolled at least half-time.

If unsubsidized, the student is responsible for the interest accumulated on the loan while still in school.

Repayment of the principal is deferred for either loan type. A federal origination fee of 1.073 percent will be charged for the 2015-2016 academic year.

For subsidized and unsubsidized loans disbursed after July 1, 2015, the interest rate is fixed at 4.66 percent.

Loan limits

First-year students - $5,500*
Sophomores - $6,500*
Juniors and seniors - $7,500*

* A minimum of $2,000 will be Unsubsidized Stafford Loan eligibility.

Loan repayment begins six months after graduation or when a student drops below half-time status. Loan eligibility will be provided on the student's Award Notification each year.

First-time Federal Direct Loan borrowers must complete the following items before the loan proceeds can bedisbursed to the student's Augustana account. (Note: The Direct Loan will not appear as a credit on the student account/tuition bill until both the Master Promissory Note (MPN) and entrance counseling have been completed.)

Federal Direct Loan Master Promissory Note (MPN)

All students wishing to borrow the Federal Direct Loan for 2015-2016 must complete a Master Promissory Note (MPN). By selecting the link below, students will be redirected to the Federal Direct Loans Master Promissory Note site to complete the MPN.

Students will need their federal PIN (personal identification number) to complete the MPN. (The PIN also is used to file the FAFSA).

If a student does not have a PIN, he or she should apply for one at before attempting to complete the MPN. Note: The Office of Financial Assistance does not have access to PINs.

The Office of Financial Assistance will be notified electronically when a student has have finished his or her MPN.

Complete a Direct Loan Master Promissory Note

Federal Direct Loan Entrance Counseling

First-time borrowers also must complete Federal Direct Loan Entrance Counseling.

By selecting the link below, you will be redirected to the Direct Loan Servicing website to complete entrance counseling. The Office of Financial Assistance will be notified when you have finished.

Complete Direct Loan Entrance Counseling

Time Limitation on Direct Subsidized Loan Eligibility

Alternative/private loans for students

Alternative/private loans are credit based loans offered by some banks and credit unions to students to help cover allowable educational expenses not covered by financial aid.  Alternative/private loans are not part of the federal loan program and not guaranteed by the federal government.  Typically, alternative/private loans:

     •  Require a credit worthy co-signer, with U.S. citizenship or permanent resident status
     •  Can have fixed or variable interest rates
     •  Have an interest rate based on a financial benchmark such as Prime or LIBOR plus a margin that is usually based on
         the creditworthiness of the borrower and cosigner
     •  Accrue interest while a student is in school
     •  May require repayment while you are still in school

Prior to borrowing alternative/private loans, you should:

     •  Apply for and be sure all federal, state and institutional funds have been utilized.
     •  Compare federal and alternative/private loans at the Federal Student Aid website.
     •  Know the amount that you really need to borrow and don't borrow more than you need.  Contact the Financial
         Assistance Office if you are unsure of the amount you need to borrow.

Because of the more favorable interest rates and repayment terms of the federal student loans, private loans should be considered after federal loans have been used, and the PLUS loan for parents has been considered.

While federal student loans should be a first choice, we understand that some students will choose to borrow from private lenders.  Augustana College does not have a preferred lender list or any type of preferred lender arrangement.  We have compiled a list of lenders that our students have used over the past three years.  Augustana does not promote, recommend or endorse any lender on the linked list below.  Augustana College will process private/alternative loans through any lender of your choice; you are not limited to the lenders on this list.

Lenders Used by Augustana Students Over the Past Three Years

If you are considering borrowing an alternative/private loan, we recommend applying by July 15 for ample processing time.

Private Education Loan Applicant Self-Certification Form

Students applying for alternative/private loans must complete and submit to their lender a Private Education Loan Self-Certification Form prior to the processing of the loan by the lender.  Please call the Office of Financial Assistance if you need additional help completing the form.

Code of Conduct for Education Loans

The Higher Education Opportunity Act of 2008 (HEOA) requires institutions of higher education to establish and follow a Code of Conduct with respect to student loans that prohibits conflicts of interest for any financial aid professional [HEOA § 487(a)(25)].  In accordance with this requirement, each staff member of the Office of Financial Aid at Augustana College signs the following conflict of interest policy and code of conduct on an annual basis.

Augustana College Code of Conduct for Education Loans