Federal Loans

Subsidized Federal Student Loans may be borrowed by students enrolled at least half-time at Simpson College. Students may borrow loan amounts based on their grade level – freshman: $3,500; sophomore: $4,500; junior and senior: $5,500.

Subsidized loans are need-based and do not accrue interest charges while the student is enrolled at least half-time. Repayment will begin six months after the student graduates or drops below half-time. The interest rate is fixed at 6.53%. Interest accrual begins at the end of the six-month grace period following graduation or less than half-time enrollment.

Unsubsidized Federal Student Loans may be borrowed by students enrolled at least half-time at Simpson College. Unsubsidized loans are not based on financial need, and therefore will begin to accrue interest charges at disbursement. The interest rate is fixed at 6.53%.

Students are packaged a base Unsubsidized Federal Direct Loan of $2,000 in addition to their Subsidized Federal Direct Loan eligibility. Independent students may borrow up to an additional $4,000 as a freshman and sophomore, or $5,000 as a junior and senior.

Federal Plus Loans enable parents to borrow a federal loan to help pay the student’s education expenses. Parents may borrow up to the cost of attendance minus other financial aid received.

Private Loans

Private education loans are available to help families fill the gap in paying for college. They should never be your primary funding source. Exhaust all of your other options including our no interest payment plan, savings, summer work, work-study and outside scholarships before you borrow any type of private education loan.

Parents, before borrowing or co-signing a private student loan, please consider the Federal Direct Parent Loan for Undergraduate Students (PLUS) as an option.

Federal Aid First
You should utilize your maximum federal financial aid eligibility before borrowing a private student loan. Simpson College has offered you the Title IV loan and grant assistance that you are eligible to receive, except the Parent PLUS Loan. Private student loans should not be the primary source of funding. The terms and conditions of federal grant and loan programs may be more favorable than those of private student loans. Federal Title IV aid programs and maximum award amounts include:

PELL Grant – $740 to $7,395 Federal SEOG –$125 to $4,000 TEACH Grant –$1,000 to $4,000 Iraq and Afghanistan Service Grants – award amount can be equal to the maximum Federal Pell Grant amount for the year, but cannot exceed your cost of attendance.  Children of Fallen Heroes Grant – award amount equal to the maximum Pell grant, unless you are receiving the maximum Pell grant based on your EFC from the FAFSA.   Federal Direct Loan – $5,500 (first year); $6,500 (second year); $7,500 (third through fifth year); Independent students may be eligible to receive an additional $4,000 (first and second year) or $5,000 (third through fifth year); graduate students may borrow up to $20,500 per year Parent PLUS Loan – A parent may borrow up to the cost of attendance minus other aid received

Some Questions to Consider Before Selecting a Private Loan

The following are some of the questions that should be considered as you research private loan options.

1. When should I apply for a private loan? It is recommended that you apply for a private loan four to six weeks before payment is due. Be sure to follow-up with the lender to ensure that you have completed all necessary paperwork. It is important to read all correspondence that is received from the lender as they often request additional information to fully underwrite a loan.
2. What is the interest rate and how often does that rate change? Interest rates on private student loans can be fixed or variable. Variable rates can change monthly or quarterly. Most rates are determined by using a financial standard such as Prime or LIBOR plus a margin that is usually based on the creditworthiness of a borrower and cosigner.
3. Is the lender charging fees for processing the loan? Some lenders charge up-front origination fees that are a percentage of the loan, while others may charge repayment fees. If fees are taken out of the loan proceeds, you are still responsible for paying back the full loan amount including the fees.
4. Do I need a cosigner on the private loan? Most loans require a credit-worthy cosigner. Even if a cosigner is optional, one is recommended as it will usually yield a lower interest rate for the borrower.
5. How often is interest capitalized on the loan? Capitalization is adding accrued interest to the principal balance. The more frequently a loan is capitalized, the costlier it will be to the borrower.
6. Am I required to make interest payments on the loan while I’m in school? Some lenders do require interest only payments while the borrower is in school. Making these payments will reduce the overall cost of the loan and can be done even if the lender does not require it. If the lender is requiring these payments, it is important that you have the ability to make those payments.
7. Does the lender have a yearly or cumulative (aggregate) borrowing limit? As you evaluate what you need to borrow over your four years, keep these limits in mind.
8. Can I borrow from more than one lender? If possible, it is recommended that you stay with one private lender throughout your college career. This should make the process of repaying loans more efficient.
9. Are there any borrower benefits associated with the loan? Many lenders offer benefits for a certain number of on-time payments, payments received through electronic funds transfer and even graduation. Some lenders also offer possible release of cosigners after making a certain number of on-time payments.
10. What are the repayment terms on the loan? Generally, most loans have a six-month grace period after graduation before repayment begins. The length of repayment period varies by lender and usually ranges from 10 to 20 years.
11. Can this loan be deferred while in graduate school? This will vary by lender, but most often they can be if the borrower is enrolled at least half time. Some lenders do have caps on the maximum number of months loans can be deferred.

Private Student Loan Preferred Lender List
A Simpson College education is one of the best investments you can make. Wise borrowing of federal and private student loans will enable you to pay for the education and living expenses necessary to become a college graduate. The office of financial aid has entered into a preferred lender arrangement (PLA) in order to better serve our students and families. Federal and state regulations require Simpson College to provide the following disclosures:

• Students may borrow from the lender of their choice and are not required to borrow from a lender on the preferred lender list. The office of financial aid will process your loan application without delay regardless of your choice of lender.
• A great deal of care was taken in the selection of these preferred lenders. Each lender was evaluated through a formal request for information.
• The lenders on the preferred lender list were evaluated and selected based on favorable loan terms including interest rate, fees and benefits. Additional criteria include the use by current and former students and a record of excellent customer service to the school and students.
• The lenders selected on the preferred lender list are not affiliated.
• Simpson College adheres to a Code of Conduct which can be found here.

Philanthropic Contributions from Preferred Lenders
Simpson College has not received philanthropic contributions from lenders on the preferred lender list.

Other Loan Programs
In addition to these loan options, Simpson College has two very specialized loan products available to students studying abroad or studying for the ministry. Interested candidates should contact the Simpson College Office of Financial Aid.

View the  Preferred Lender List

Next Steps
After completing the loan application, your lender may require you to submit income and tax documentation. Federal regulations also require you to view and accept additional disclosures after the loan is approved.

Your loan funds will not be sent to the school and your loan will be canceled if the additional steps listed below are not completed in a timely manner.

• View and accept your Approval Disclosure
• View your Final Disclosure
• Complete a Private Loan Self-Certification Form