Loans Are Money Students Or Parents May Borrow To Assist In Paying For College Costs.
Federal Loans
The Federal Financial Aid program is the largest lender of student loans. There are private/alternative lenders to consider as well. Student loan repayment usually begins after education is finished. It is helpful to look at loans as an investment in the future.
Federal Unsubsidized Direct Loans are are non credit based federal loans available to degree-seeking graduate students who are enrolled and participate at least half-time.
Half-time is defined as 3 credit hours per semester for graduate and doctoral students. The Unsubsidized Direct Loan is borrowed directly from the U.S. Department of Education as part of the William D. Ford Direct Loan Program. Please note that if a student requires multiple classes to meet the 3 credit mark, they must begin all 3 credits to remain eligible.
What is the interest rate for the Federal Unsubsidized Direct Loan?
The interest rate for the 2025-2026 Graduate Unsubsidized Direct Loan is fixed at 7.94% for the life of the loan. Interest on Unsubsidized Direct Loans will begin to accrue immediately from the time the loan is disbursed until it is paid in full. Students are permitted the option of paying the interest each quarter or deferring interest payments until they enter repayment. If the student allows the interest to accrue while they are in school or during other periods of nonpayment, it will be capitalized – that is, the interest will be added to the principal amount of the loan, and additional interest will be based on that higher amount.
Are there any fees associated with the loan?
Yes, Federal Unsubsidized Direct Loans carry an origination fee, currently the fee is 1.057%. The origination fee is deducted from the loan amount prior to its disbursal to the university.
What is the federal maximum amount a graduate student can borrow each year?
The federal maximum graduate students can borrow each academic year is $20,500. However, the total loan amount students can borrow could be limited by the costs of their program. Pharmacy students may borrow up to $33,000 each academic year.
What should I do if I want to accept or decline my Federal Unsubsidized Loan offer?
The first step is to log onto Hornet Hub and click on “Financial Aid”. On the Financial Aid page will be a checklist with a line that says “Review and accept your Financial Aid Award Package”. This is where you can accept or decline your loan offers. If accepting the loan offer, complete Loan Entrance Counseling and a Master Promissory Note which can be found on studentaid.gov
When do students pay back these loans?
After students graduate, leave school, or drop below half-time enrollment, they will have six months before they must begin repayment of their loans. This period of time is called a grace period. Students are granted one grace period. Students may have longer than six months if they are on active duty in the military.
What happens when I withdraw?
Per federal regulations, students who withdraw from the university undergo a calculation to determine how much of their financial aid is earned based on the percentage of the semester completed per a federal formula. Any unearned aid must be returned to the Department of Education per their regulation. It is possible this may result in a balance on the student’s account; we highly recommend any student considering a withdrawal discuss their concerns with the Office of Financial Aid prior to withdrawing to review options.
It is important to complete Loan Exit Counseling once you graduate, withdraw or drop below half time enrollment. The completion of the Exit Counseling will give you important information about your loans and repayment options.
Depending upon the cost of their academic program, graduate or doctoral students may need additional loan funds beyond the Federal Unsubsidized Direct Loan.
For these students, the Federal Graduate PLUS Loan may be an available option.
In order to be eligible for a Federal Graduate PLUS Loan, students must complete and submit the Free Application for Federal Student Aid (FAFSA) each year of their program. A Graduate PLUS loan borrower must not have an adverse credit history, which is determined by a credit check. If necessary, students may obtain an endorser. Students may borrow up to the Cost of Attendance for the period of enrollment, minus other estimated financial assistance such as a Direct Loan. This loan is available to degree-seeking graduate students who are enrolled and participate at least half-time.
What is the interest rate for Federal Graduate PLUS Loans?
The interest rate for the 2025 – 2026 Grad PLUS Loan is fixed at 8.94%
Are there any fees?
Yes, Graduate PLUS Loans carry an origination fee of 4.228%. The origination fee is deducted from the loan amount prior to its disbursal to the university.
How do I apply for the Grad PLUS Loan?
The application can be found on studentaid.gov under Loans and Grants. As this is a loan in the student’s name, the student would need to log into studentaid.gov with their own FSA Id and submit the application.
- If applying for a specific amount, one would need to factor in the 4.228% loan origination fee. This is a fee that the Department of Education takes prior to sending the funds to Shenandoah to put onto the student’s account.
- If applying for a specific term, adjust the loan period on the application to match the dates of that term. Example: The fall term would be August-December. The spring term would be January-May.
- If the loan is submitted for a “Maximum” request, a credit balance will be generated on the student account after the loan is processed. This credit will be issued after the add/drop period of each semester. We encourage all students to set up banking information under Refund Banking on their Hornet Hub. A Loan Adjustment form can be submitted to the Office of Financial Aid if it was not the intention to receive the excess loan funds.
- The completion of Loan Entrance Counseling and a Master Promissory Note for the Plus Loan is required before the loan can be processed onto the student’s account.
When should I apply for the Grad Plus Loan?
The application is available on studentaid.gov by April of each year. The Office of Financial Aid will review applications starting in May.
Who is my Federal Loan Servicer?
Approximately one month after your Grad Plus Loan funds disburse, your Federal Loan Servicer information will be updated on your Dashboard on your studentaid.gov account. It is recommended to set up an online account with your Loan Servicer so that you can review your loan information and get repayment updates.
When do students begin repaying a Graduate PLUS Loan?
Payment is deferred as long as the student is enrolled at least half-time. Similar to an Unsubsidized Direct Loan, the Graduate PLUS Loan does accrue interest while the loan is in deferment. This interest can either be paid or be capitalized. Repayment begins immediately upon graduation or less than half-time enrollment. Unlike the Federal Direct Loan, Graduate PLUS Loans do not have a grace period. However, students are eligible for a six month post-enrollment deferment after the student drops below half-time.
What happens when I withdraw?
Per federal regulations, students who withdraw from the university undergo a calculation to determine how much of their financial aid is earned based on the percentage of the semester completed per a federal formula. Any unearned aid must be returned to the Department of Education per their regulation. It is possible this may result in a balance on the student’s account; we highly recommend any student considering a withdrawal discuss their concerns with the Office of Financial Aid prior to withdrawing to review options.
It is important to complete Loan Exit Counseling once you graduate, withdraw or drop below half time enrollment. The completion of the Exit Counseling will give you important information about your loans and repayment options.
Alternative/Private Loans
Alternative/private student loans are loan funds from banks, credit unions or other lending institutions and are not part of the Federal Student Aid Program. Therefore, a FAFSA is not required to receive these loans. However, we do recommend submitting a FAFSA to allow the opportunity to explore all federal loan options.
Although these are non-federal loans, federal financial aid regulations require Shenandoah University to include private educational loans as part of a student’s financial aid package. Accordingly, we will not certify a private loan which exceeds our estimate for the student’s educational expenses.
Private Student Loans do require a loan application and borrowers should apply directly with their chosen lender. Since every lender is different, be sure to compare interest rates and unique terms and benefits before signing the loan disclosures.
Key Considerations
When comparing private lenders, pay close attention to the following details to ensure an understanding of the best rates, etc. for the loan:
- Fixed vs. Variable Rates: A fixed rate stays the same for the life of the loan, providing predictable payments. A variable rate may start lower but can fluctuate based on market conditions, potentially increasing costs over time.
- The Power of a Cosigner: Most students will need a credit-worthy cosigner to qualify or to secure a lower interest rate. Note that a cosigner does not have to be a parent.
- Credit Checks: Be aware of the difference between a soft credit pull (often used for pre-qualification to see the estimated rate without affecting borrower credit score) and a hard credit pull (required for the final application, which may temporarily impact the credit score).
Borrowing Smart
- Borrow Only What Is Needed: Determine the amount of loan that pays remaining tuition, fees, housing, etc. and consider borrowing only what is needed – not more.
- Apply for the Full Year: To avoid multiple “hard” credit checks, it is often better to apply for the full academic year rather than one semester at a time.
- Multi-Year Options: Some lenders offer “multi-year” plans that simplify the process for future years of study. Borrowers will still need to confirm the loan amount each year and it will also require a credit check each year.
- Cosigner Release: Some lenders offer a “release” option, where the cosigner is removed from the legal obligation of the loan after the student makes a specific number of consecutive, on-time payments.
- Interest Only Payments: Many lenders offer interest-only payments while the borrower is enrolled in school. By paying just the interest now, what needs to be repaid will be less.
- Making On Time Payments: If a borrower elects to make interest only payments or a monthly payment on the loan, ensure payments are made on time. If payments are missed, future loan disbursements may not be released. Setting up Autopay is strongly recommended.
- Servicer Forbearance: Some servicers may offer a temporary postponement of payments due to financial hardship.
Loan Terms
- Deferment/Grace Periods: A period, usually while enrolled at least part-time in school or six months after graduation, where borrowers are not required to make payments.
- Delinquent: The status of a loan the very first day a payment is missed.
- Default: Failure to repay the loan according to the agreed-upon terms, which severely damages credit for both the student and cosigner.
Looking for a Private Lender? FastChoice provides information about private loans in an easy-to-understand format to help students determine which private student loan best meets their needs.
What if I want to make an adjustment to my loan(s)?
Students have the ability to lower their loan amount (this can be to cover only tuition and fees or to a requested amount), cancel loans entirely, and reinstate loans that were previously cancelled/rejected. To do this, students will need to complete a Loan Adjustment Form (see below) and submit to finaid@su.edu.
Important information regarding loan adjustments:
- Loan Adjustment requests need to be submitted promptly and preferably prior to the start of each term in which the adjustment is needed.
- Loan adjustments may take 5-7 business days to process.
- Once an adjustment is made you will need to log into your Hornet Hub to review the adjustment and may be required to take action on the adjusted loan offer.
- A maximum of 2 adjustments per term are permitted. Additional adjustments would need to be reviewed on a case by case basis.
- Undergraduate students will have their federal loans divided evenly between the fall and spring semesters.
- If requesting a loan adjustment for a specific amount please factor in the federal loan origination fee. (1.057% for the Federal Subsidized and Unsubsidized Loan and 4.228% for the Plus Loan).
- If a financial aid refund has been issued and the student no longer wants the loan, the loan funds would need to be returned to our office along with the Loan Adjustment Form prior to the loan being canceled.
- All loan adjustments will be reviewed, certain adjustments may not be approved as loan limits, eligibility and disbursement regulations apply.
Loan Adjustment Forms:
Questions?
At Shenandoah we understand that Financial Aid is an important, and sometimes confusing, factor in your college search process. We are here to help you understand your Shenandoah University financial aid package and financial options. Contact the Office of Financial Aid.