Undergraduate Loans

Loans are sources of financial assistance that allow you to spread the cost of education over time. All need-based financial aid awards will include loans. Students are not required to accept the loan portion of their financial aid packages. However, we will not offer additional grant or scholarship assistance to students who turn down their loans.

Loans are serious legal obligations. They must be repaid. We urge all first-time borrowers to spend some extra time learning about the loan process so that they can make informed choices throughout their education.

 In This Section:

Mandatory Loan Counseling | Perkins Loans | Subsidized Direct Loans | Unsubsidized Direct Loans | PLUS Loans | |Alternative Loan Programs | Promissory Notes| 

Mandatory Loan Counseling

Entrance loan counseling for first-time borrowers

All first-time Federal Direct Student Loan and  FederalPerkins Loan borrowers at Loyola must participate in loan entrance counseling, even if you have borrowed at a previous institution. Entrance counseling for Federal Direct Student loans can be completed online in the Entrance Loan Counseling section of our site.  Entrance counseling is not required for alternative loan borrowers. No loan funds will be credited to your account until you complete an entrance loan counseling session.

Exit loan counseling

All borrowers of Federal Direct Student Loan and Perkins Loan funds are required to have an exit interview during their final semester. Group sessions will be scheduled for graduating students. Students who have Federal Direct loans can also complete this requirement online in the Exit Loan Counseling section of our site.
 

 Federal Perkins Loans

The Federal Perkins Loan is a federally funded, low-interest loan program. Awards are based on calculated financial need as demonstrated by the information students provide on the FAFSA and the availability of funds. The current interest rate is 5%.  Interest does not accrue while the student is enrolled at least half-time in a degree-seeking program. Repayment begins nine months after the student leaves school or drops below half-time enrollment.  Schools are given a very limited amount of funding for this program. Preference is given to students with exceptional need who meet Loyola’s priority application deadline. Students must sign a promissory note before these funds can be credited to their account. Perkins Loans are administered through the Office of Student Finance. 

Federal Direct Student Loans (subsidized)

NOTE: On March 25, 2010, Congress passed legislation which mandates that all students borrow through the Federal Direct Loan Program starting with the 2010-2011 academic year. 

President Obama signed the bill into law on March 30, 2010.

  • Read more about these changes
    • First Time borrowers at Loyola University New Orleans will need to complete a loan entrance counseling session, even if you have borrowed at a previous institution. Entrance counseling for Stafford loans can be completed online from the the Entrance Loan Counseling section of our site. 
    • ALL Borrowers will need to complete a "Master Promissory Note" with the Direct Loan Program.
    • Borrowers will be able to complete BOTH steps on the new StudentLoans.gov  web site.

Students must complete the FAFSA application and demonstrate financial need according to the federal formulas in order to be eligible for subsidized Direct Loans . These loans are processed through the Department of Education. Under this program, the federal government will pay the interest  on behalf of qualified borrowers for as long as the borrower is enrolled at least half-time (6 credits per semester) in a degree-seeking program and for six months thereafter. Students must also maintain "satisfactory academic progress" towards completing their degree requirements.

A 1 to 1.5% default reduction fee and a 0.05% to 1% origination fee may be charged by the Department of Education and deducted from each Direct Loan disbursement. The annual maximum award is tied to the student’s academic class and ranges from $3,500 for freshmen to $5,500 for seniors.  The Deficit Reduction Act of 2005 mandated a change in this loan program so that interest will be charged at a fixed rate of 6.8% for all loans made on or after July 1, 2006.

The College Cost Reduction and Access Act (H.R. 2669) was signed into law on Sept. 27, 2007. This bill gradually cuts interest rates on subsidized Stafford loans for undergraduate students in half according to the following schedule:

  • 6% for loans first disbursed July 1, 2008 to July 1, 2009
  • 5.6% for loans first disbursed July 1, 2009 to July 1, 2010
  • 4.5% for loans first disbursed July 1, 2010 to July 1, 2011
  • 3.4% for loans first disbursed July 1, 2011 to July 1, 2012

Currently enrolled students who need to apply for additional Loan funds for the remainder of the 2010  summer sessions should contact their financial aid counselor for more information.

NOTE FOR GRADUATING SENIORS:

By law, we must pro-rate Direct Loans for graduating seniors who will be completing their undergraduate degree requirements during the fall semester.  Contact your assigned counselor for more information.

Federal Direct Loans (unsubsidized)

Eligibility for the Unsubsidized Direct Loan is not based on a family’s demonstrated need.  The Department of Education is the lender under this program. The government does not pay the interest on behalf of borrowers under the Unsubsidized Direct Loan Program. The student borrower can choose either to make periodic payments of the interest or to have the interest added back into the principal of each loan. A 1.0- 1.5% default reduction fee and a 0.05% to 1% loan origination fee may be charged by the Department of Education and deducted from each Direct Loan disbursement. Students must also maintain "satisfactory academic progress" towards completing their degree requirements.

Students must complete and submit the FAFSA in order to considered for the unsubsidized loan. The annual maximum award is tied to the student’s academic class and ranges from $3,500 for freshmen to $5,500 for seniors. The Deficit Reduction Act of 2005 mandated a change in this loan program so that interest will be charged at a fixed rate of 6.8% for all loans made on or after July 1, 2006.

NOTE FOR GRADUATING SENIORS:

By law, we must pro-rate  loans for graduating seniors who will be completing their undergraduate degree requirements during the fall semester.  Contact your assigned counselor for more information.

Federal PLUS Loans

A creditworthy parent of a dependent undergraduate can apply for Federal PLUS loan. Federal PLUS loans are not based on demonstrated need and may be used to replace all or portions of the calculated family contribution for students who completed a FAFSA.

We will not certify a PLUS loan until a student has been accepted and paid a commitment deposit to attend Loyola University New Orleans.

NOTE:  On March 25, 2010, Congress  passed legislation which mandates that all parents borrow through the Federal Direct Loan Program starting with the 2010-2011 academic year. 

  Alternative Loan Programs

If your family is not eligible for need-based financial assistance or chooses not to apply, these programs offer alternate loan resources.  Students who are receiving financial aid can also utilize these programs to finance all or part of their calculated expected family contribution. Borrowers must be creditworthy to participate in these programs. Students, who are not creditworthy by program guidelines, may still be eligible to participate IF they can find a creditworthy person to cosign their loan application. View a summary of the major programs.

 

Updated September 15, 2011