Terms and Conditions of Federal Student Loans

Federal Perkins Loan:  The Federal Perkins Loan is available to eligible undergraduate and graduate students.  To qualify for Federal Perkins Loans the student must file a FAFSA, be admitted into a degree program, be enrolled at least half-time, and demonstrate financial need.  The annual maximum Federal Perkins Loan award is $5,500 for a maximum of $27,500 as an undergraduate student, or $8,000 per year with a maximum of $60,000 for graduate students.  Federal Perkins Loan award amounts will likely be less due to federal funding.  The interest rate is fixed at 5% with interest accrual beginning nine months after graduation or less than half-time enrollment.  Full principal and interest repayment begins after the nine month grace period.  Certain deferments and cancelations may be available and will be explained fully during entrance and exit counseling.
If a Federal Perkins Loan has been included in the financial assistance award, the following items must be completed before the funds will be credited to the student account.  Instructions will be provided to the student.

  • Federal Perkins Entrance Counseling
  • Federal Perkins Master Promissory Note

William D. Ford Federal Direct Stafford Loan:  The Federal Direct Stafford Loan program is available to undergraduate and graduate students.  To qualify for Federal Direct Stafford Loans the student must file a FAFSA, be admitted into a degree program, and be enrolled at least half-time.  Dependent undergraduate students may be eligible to borrow up to:

  • $5,500 as a first-year student (less than 29.01 credits)
  • $6,500 as a second-year students (29.01 to 61.0 credits)
  • $7,500 as a third through fifth year student (61.01 credits or more).

Independent undergraduate students may be eligible to borrow up to $4,000 more during the first and second years and $5,000 more during the third through fifth years.  Graduate and professional students may borrow up to $20,500 per year, if the student cost of attendance allows.

For information regarding aggregate borrowing limits, interest rates and other loan information, contact Simpson’s loan coordinator in the office of financial assistance.  The Federal Direct Stafford Loan program includes Subsidized (need based) and Unsubsidized (non-need based) loans.  The financial assistance award will indicate eligibility for either loan type or a combination of the two loan types depending on the results of the FAFSA.  Federal Direct Stafford Loans begin repayment of principal and interest at the end of the six month grace period.  Interest accrual begins at graduation or less than half-time enrollment for Subsidized Stafford Loans and interest accrual begins at disbursement for Unsubsidized Stafford Loans.  The U.S. Department of Education charges a loan origination fee which will be subtracted from the loan proceeds at disbursement.

If a Federal Direct Stafford Loan has been included in the financial assistance award, the following items must be completed before the funds will be credited to the student account:

  • Federal Direct Stafford Loan Request Form (form 5)
  • Federal Direct Stafford Entrance Counseling online at www.studentloans.gov
  • Federal Direct Stafford Master Promissory Note online at www.studentloans.gov

Returning Simpson College students who previously borrowed under the Federal Direct Stafford Loan program will have their loans processed automatically for the amount indicated on the financial assistance award.  Evening,  weekend and graduate students must also complete an Evening & Weekend Loan Request Form each year.

William D. Ford Federal Direct Graduate PLUS Loan (for graduate students):  The Federal Direct Grad PLUS Loan is available to graduate students who file a FAFSA.  Graduate students may borrow up to the cost of attendance minus other financial assistance received.  Approval of a Graduate PLUS Loan is contingent upon credit approval by U.S. Department of Education.  Graduate students are encouraged to utilize their Federal Direct Stafford Loan eligibility prior to borrowing Federal Direct Grad PLUS Loans.  The interest rate is fixed at 7.9% with interest accrual beginning at disbursement.   Repayment of principal and interest begins after the six month grace period.  The U.S. Department of Education charges a 4.0% loan origination fee which will be subtracted from the loan proceeds at disbursement.  Interest rates and origination fee are set by the Federal Government each July 1st.  The rates above were correct at the time of publication.

If a Federal Direct Graduate PLUS Loan has been included in the financial assistance award, the following items must be completed before the funds will be credited to the student account:

  • Federal Direct Graduate PLUS entrance counseling online at www.studentloans.gov
  • Federal Direct Graduate PLUS Master Promissory Note online at www.studentloans.gov

William D. Ford Federal Direct Parent Loan for Undergraduate Students (PLUS):  The Federal Direct Parent PLUS Loan is available to parents of dependent undergraduate students.  The student must file a FAFSA.  Approval of a PLUS Loan is contingent upon credit approval by the U.S. Department of Education.  The parent may borrow up to the cost of attendance minus other aid received.  The interest rate is fixed at 7.9% with interest accrual beginning at disbursement.  Repayment of principal and interest begins within 60 days of full disbursement, or a deferment may be available to postpone repayment until 6 months after the student graduates or drops below part-time enrollment.  The U.S. Department of Education charges a 4.0% loan origination fee which will be subtracted from the loan proceeds at disbursement.  Interest rates and origination fee are set by the Federal Government each July 1st.  The rates above were correct at the time of publication.

To apply for the Federal Direct Parent PLUS Loan, the parent borrower must complete:

  • Federal Direct Parent PLUS Loan Request  online at www.studentloans.gov
  • Federal Direct Parent PLUS Master Promissory Note online at www.studentloans.gov

Estimated Repayment Information for Federal Student Loans:  On average, undergraduate students at Simpson College borrowed $24,555 in Federal Direct Stafford Loans.  The charts below provide estimated monthly interest charges and estimated monthly payment amounts based on this level of Stafford Loan indebtedness at a 6.8% fixed interest rate.  The minimum monthly payment amount is $50 under the 10-year Standard Repayment Plan, but may be more depending on how much you borrow.

               Approximate Monthly Interest Charges                         Estimated Monthly Payments (10-Year Term)                 

Amount

3.4%

4.5%

5.0%

5.6%

6.0%

6.8%

Amount

3.4%

4.5%

5.0%

5.6%

6.0%

6.8%

$3,500

$12

$13

$14

$16

$18

$20

$3,500

$50

$50

$50

$50

$50

$50

$4,500

$15

$17

$19

$21

$23

$26

$4,500

$50

$50

$50

$50

$50

$52

$5,500

$18

$21

$23

$26

$28

$31

$5,500

$56

$57

$58

$60

$61

$63

$7,000

$23

$26

$29

$33

$35

$40

$7,000

$71

$73

$74

$76

$78

$81

$8,500

$28

$32

$36

$40

$43

$48

$8,500

$86

$88

$90

$93

$94

$98

$15,000

$50

$56

$60

$70

$75

$85

$15,000

$152

$155

$159

$164

$167

$173

$20,000

$67

$75

$82

$93

$100

$113

$20,000

$202

$207

$212

$218

$222

$230

$23,000

$77

$86

$95

$107

$115

$130

$23,000

$233

$238

$244

$251

$255

$265

$25,500

$85

$96

$107

$119

$128

$145

$25,500

$258

$264

$270

$278

$283

$293