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 also private lenders 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 Direct Loans are federal loans available to degree-seeking undergraduate students enrolled and participate at least half-time. Half-time at SU is defined as six credit hours for undergraduates. Direct Loans are can be subsidized and/or unsubsidized. These loans are not credit-based and carry a current origination fee of 1.057%. The origination fee is deducted from the loan amount prior to its disbursal to the university. The Direct Loan is borrowed directly from the U.S. Department of Education as part of the William D. Ford Direct Loan Program. There are two types of Direct Loans, subsidized and unsubsidized.
A Subsidized Direct Loan is awarded on the basis of financial need as determined by the FAFSA and SU. For Subsidized Direct Loans disbursed before July 1, 2012, no interest will accumulate for the student prior to repayment of the loan or during authorized periods of deferment. The federal government will pay the interest during these periods. For Subsidized Direct Loans disbursed after July 1, 2012, no interest will accumulate for the student while they are enrolled at least half-time or during authorized periods of deferment.
An Unsubsidized Direct Loan is not awarded on the basis of financial need. Unlike a subsidized loan, interest 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.
Depending on a student’s financial need, their Direct Loan could be a combination of both subsidized and unsubsidized.
What is the federal maximum an undergraduate student may borrow each academic year?
| Dependent Student | Maximum Direct Loan Amount |
|---|---|
| First Year | $5,500 (Up to $3,500 of this amount may be subsidized) |
| Sophomore | $6,500 (Up to $4,500 of this amount may be subsidized) |
| Junior or Senior | $7,500 (Up to $5,500 of this amount may be subsidized) |
| Independent Student | Maximum Direct Loan Amount |
|---|---|
| First Year | $9,500 (Up to $3,500 of this amount may be subsidized)* |
| Sophomore | $10,500 (Up to $4,500 of this amount may be subsidized)* |
| Junior or Senior | $12,500 (Up to $5,500 of this amount may be subsidized)* |
* Students whose parents are denied the Parent PLUS Loan are also able to borrow at this level.
What are the interest rates for Direct Loans?
The interest rate for all undergraduate Direct Loans for the 2025-2026 year will be fixed at 6.39% for the life of the loan. The interest rate for any Direct Loans borrowed in the subsequent years are subject to change by Department of Education.
When do students pay back Direct 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.
If I want to accept or decline my federal loans, what action steps do I need to take?
The first 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.
What documents do I need to complete if accepting the Federal Subsidized or Unsubsidized Loans?
If you are accepting your Subsidized or Unsubsidized loans, you will need to complete Loan Entrance Counseling and a Master Promissory Note. Both of these documents can be found on studentaid.gov under Loans and Grants. Completion of these documents is required before loans can be fully approved.
What is Loan Exit Counseling and who is required to complete it?
If a student graduates, withdraws or drops below halftime enrollment and if they have had federal loans during their time of enrollment at Shenandoah, completion of Exit Counseling is required and can be found on studentaid.gov. Completion of Exit Counseling will not affect your future borrowing of federal loans but will lead you to important information about your loans. Exit Counseling will guide you to your federal Loan Servicer contact information and loan repayment options. It will highlight the importance of on time student loan payments, setting up Autopay and updating your contact information with your Loan Servicer.
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.
Parent PLUS Loans are federal unsubsidized loans parents can take out to pay for their dependent student’s educational expenses. Students must be considered a dependent by the FAFSA, be a degree-seeking undergraduate, and be enrolled and participate at least half-time. Eligible parents who can borrow a PLUS Loan include a student’s biological parents, whether they were listed on the FAFSA or not, and stepparents whose income was reported on the FAFSA.
The Parent Plus Loan is a credit-based loan, to be approved, a parent must have a satisfactory credit history, though there are options if a parent has adverse credit, such as using an endorser or documenting extenuating circumstances.
Parent PLUS Loans currently have an origination fee of 4.228%. The PLUS Loan is borrowed directly from the U.S. Department of Education as part of the William D. Ford Direct Loan Program. Parents may borrow for each year of their student’s undergraduate career, though subsequent credit checks will be required.
What is the interest rate for Parent PLUS Loan?
The interest rate for the 2025 – 2026 Parent PLUS Loan is fixed at 8.94%
How do I apply for the Parent PLUS Loan?
The application can be found on studentaid.gov under Loans and Grants. As this is a loan in the parents name, the parent 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 students 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 and will be issued to the student unless a parents bank account information is added in the 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 a Master Promissory Note for the Plus Loan is required before the loan can be processed onto the students account.
When should I apply for the Parent 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.
When do parents begin repaying a Parent PLUS Loan?
Parents are given two options in repaying the Parent PLUS Loan. Typically, repayment begins within sixty days after the final loan disbursement for the academic year the loan was borrowed. Alternatively, parents can choose to defer loan repayment until their student graduates or drops below half-time enrollment. Interest will still accrue and parents will be given the option of paying or capitalizing the interest. Regardless of the repayment option the parent selects, interest begins to accumulate at the time the first disbursement is made.
Who is my Federal Loan Servicer?
Approximately one month after your Parent 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.
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.
A Federal Nursing Student Loan is a 5% interest loan for students who are enrolled at least half-time in the Bachelor’s in Nursing program who demonstrate exceptional financial need. Please contact the Office of Financial Aid for more information.
When do students pay back Nursing Student Loans?
If a student is attending school at least half-time, they have nine months after they graduate, leave school or drop below half-time status before they must begin repayment. Students may have longer than nine months if they are on active duty in the military. At the end of the grace period, students must begin repaying their loans. Students may be allowed up to 10 years to repay.
What is the federal maximum an undergraduate student may borrow each academic year?
|
Years |
Limit for first Two Years 0 – 53.99 credits |
Limit for Final Two Years 53.99+ credits |
Aggregate Loan Limit |
|
2020-21 |
$4,816 |
$7,576 |
$24,768 |
|
2021-22 |
$5,022 |
$7,899 |
$24,768 |
|
2022-23 |
$5,236 |
$8,237 |
$25,825 |
|
2023-24 |
$5,460 |
$8,588 |
$26,928 |
|
2024-25 |
$5,693 |
$8,955 |
$28,078 |
|
2025-26 |
$5,936 |
$9,338 |
$29,227 |
|
2026-27 |
$6,189 |
$9,736 |
$30,527 |
|
2027-28 |
$6,454 |
$10,152 |
$31,830 |
|
2029-30 |
$6,729 |
$10,586 |
$33,189 |
*
Alternative/Private Loans
Alternative/private student loans are outside funds borrowed from a bank or lending institution and not part of the Federal Student Aid Program. Accordingly, it is not necessary to file a FAFSA or other federal forms in order to receive these loans. Many students and parents opt for these loans when they are looking for more flexible repayment options than those available with federal loans, such as placing the loan in the student’s name. Though these are non-federal loans, most lenders will require the Office of Financial Aid to certify the student’s enrollment and eligibility. Accordingly, we will not certify a private loan which exceeds our estimate for the student’s educational expenses. Federal financial aid regulations also require Shenandoah University to include private educational loans as part of a student’s financial aid package. As a result, a private loan may reduce the amount a student or parent could receive in other forms of financial aid, regardless if Shenandoah University certified the loan or not. Conversely, the amount Shenandoah University could certify for a private loan could be limited by the other aid the student is receiving. Some things to keep in mind when considering a private loan:
Borrower/Cosigner Responsibility: In borrowing a private loan, the student is often responsible for repayment; as opposed to the Parent PLUS Loan, where it is the parent’s responsibility to repay the loan. However, lenders of private loans will often require a parent or another party to cosign the loan for their student, making that individual responsible for repayment if the student defaults on the loan. Cosigning also means the loan will appear on the cosigner’s credit history in addition to the student’s
Interest Rate: The interest rates on private loans are typically based on the current prime/LIBOR rates and are variable. Often the lender will base the interest rate upon the credit score and history of the borrower or 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 – FastChoice
Private Loan Resources:
Guide to private college loans: Student Loan Resources: Tips, Tools, and Guidance from Abe (abestudentloans.com)
A Deeper Dive into Private Student Loans:
- Student Loan Manager | Student Loan Relief | Earnest
- Funding U’s Blog – Info, resources, and no cosigner student loans. (funding-u.com)
- Financial Resources | LendKey
International Financial and College Guide for Students: International Students Guide to Studying in the U.S. | MPOWER Financing
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.
Complete the Free Application for Federal Student Aid (FAFSA)