Loans for Undergraduate Students

 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% and a fixed interest at 8.94% for 2025-26. 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.

Parent PLUS Loan Tips & Common Mistakes to Avoid

Applying for a Parent PLUS Loan can be straightforward, but small errors can delay processing. Use these tips to ensure your application is submitted correctly the first time.

Make Sure the Correct Borrower Applies

• The parent must log into studentaid.gov using their own FSA ID to apply
• The parent must be listed as the borrower, not the student
• If a stepparent is applying, that parent’s information would also need to be on the FAFSA.

Select the Correct Academic/Award Year

• Choose the academic year that matches the student’s enrollment
  • Example: Fall 2026 start = 2026/2027 academic year
  • The application may display this as “2027”

Use the Correct Loan Period (Award Date Range)

• Federal regulations do not allow loans to span multiple academic years.
• Use one of the following approved date ranges:

Fall & Spring: 08/2026 – 05/2027

Fall Only: 08/2026 – 12/2026

Spring Only: 01/2027 – 05/2027

Factor in the Loan Origination Fee

• Parent PLUS Loans include a 4.228% origination fee. This fee is deducted from the loan before disbursement.
  • Example: Request: $10,000 Receive: $9,577
• Borrow slightly more if you need a specific net amount

What happens once the application is submitted?

The processing of Parent Plus Loans for the next academic year will begin in May and loans will be processed in the order received. (Estimated timeline is 2-3 weeks)

A confirmation email will be sent once the loan is processed.

To ensure the seamless processing of your loan, please make sure that the following action steps have been completed: 

• Complete the Master Promissory Note for the Parent Plus Loan. This document can be found at https://studentaid.gov/mpn/. The MPN remains active for 10 years.
• When completing the Master Promissory Note for the Plus Loan make sure that you log into studentaid.gov using your parent FSA login.
• Connect the correct dependent to the Master Promissory Note (MPN) and select Shenandoah University as the college. 
• Review your MPN prior to submission. If an error was made, you can submit a new MPN.
• Make sure that your dependent has taken action on their federal loan and work study offers on their Hornet Hub.
• If accepting the loans, your dependent will need to complete Loan Entrance Counseling and a Master Promissory Note which can be found on studentaid.gov under Grants and Loans.

The Parent Plus Loan will be processed according to the loan period specified on the application. If you submitted a Parent Plus Loan with a loan period of 08/2026-05/2027, the loan will be split evenly between the fall and spring semester. 

Please submit a Loan Adjustment Form if you need to make adjustments to your Parent Plus Loan. Acceptable adjustments include:

•  Loan decrease to a specific amount (factor in the 4.228% loan origination fee)
•  Loan decrease to cover only remaining Tuition and Fees.
•  Request for the loan to be split differently to the application, example- make a note on the loan adjustment form requesting for the loan to be only for the fall semester.
• Cancel the loan entirely

If a loan increase is needed, a new Parent Plus Loan application would need to be submitted. 

For new Parent Plus Loan borrowers there are new loan limits:

• $20,000 per dependent student, per year (annual limit)
• $65,000 per dependent student, in total (aggregate limit)
• PLAN accordingly. If $20,000 is borrowed for the first three years, there will be limited access to the Parent Plus Loan in the fourth year. You may opt to borrow $16,250 per academic year to span the total eligibility evenly over 4 years. 

For current Parent Plus Loan borrowers who have students currently enrolled (prior to July 1st, 2026), the new loan limits do not apply if your dependent student remains continuously enrolled in the same program of study at the same institution. 

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.

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?

*

Shenandoah University Cohort Default Rate

National Average Cohort Default Rate

Shenandoah University Loan Borrowers

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:

• 2025-26 Loan Adjustment Form
• 2026-27 Loan Adjustment Form