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, 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.  Individual Federal Perkins Loan award amounts will be less at Simpson 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 required 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 student (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.

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.  The interest rate* is fixed at 3.86% for undergraduate Stafford Loans and 5.41% for graduate students.  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 1.072% 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 4)
  • 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.  Continuing and Graduate Program students must complete a 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 6.41% 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 4.288%  loan origination fee* which will be subtracted from the loan proceeds at disbursement.

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 Loan Request Form
  • 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 6.41% 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 4.288% loan origination fee* which will be subtracted from the loan proceeds at disbursement.

 

 

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

 

*Interest rates and origination fees are set annually by the federal government on July 1.  The interest rates and fees listed above were accurate at the time of publication.

 

Estimated Repayment Information for Federal Student Loans:  On average, undergraduate students at Simpson College borrowed $24,807 in Federal Direct Stafford Loans with an estimated $285 monthly payment. The chart below provides estimated monthly payment amounts based on levels of Stafford Loan indebtedness at a 3.86% 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.

 

Estimated Repayment Information for Federal Direct Loans:

   

3.86% Fixed Interest Rate

Balance at Repayment

Number of Payments

Estimated Payment Amount

$1,000

22

$50

$5,500

120

$55

$10,000

120

$101

                       $15,000

120

$151

$20,000

120

$201

$25,000

120

$251

$30,000

120

$302