If you're like most students, you will probably need some type of student loan to help finance your college education. You should think of a student loan as an investment in your future - as long as you are prepared to meet your repayment responsibilities. All loans, including student loans, represent debts that must be repaid. The good news is that you do not have to start repaying most student loans until after you leave school or graduate.
In addition to delayed repayment, most student loans have relatively low interest rates, several repayment options from which to choose, circumstances under which repayment can be postponed, and other favorable terms and conditions. At Cal U, the federal government funds nearly 95% of all loans. Mandatory online loan counseling helps students understand the responsibilities that come with borrowing money for education. Stafford loan entrance counseling must be completed before loans can be disbursed. After a student graduates or drops below half time, exit counseling must be completed in order ensure compliance with federal regulations. Failure to repay your student loans will have serious adverse consequences.
New Information Regarding Federal Direct Loan Interest Rates:
Interest rates will be established each year for Direct Subsidized, Direct Unsubsidized, and direct Plus Loans for which the first disbursement is on or after July 1 through the following June 30. The rate will be the sum of a uniform "index rate" plus an "add-on" that varies depending on the type of loan (Subsidized/Unsubsidized or PLUS) and the borrower's grade level (undergraduate or graduate/professional.) Thus, interest rates will be the same for Direct Subsidized Loans and Direct Unsubsidized Loans taken out by an undergraduate student, with a different rate for Direct Unsubsidized Loans taken out by a graduate/professional student and for PLUS Loans taken out by parent borrowers or graduate /professional student borrowers.
Under the law, the index rate is determined each year as the "high yield of the 10-year treasury note" auctioned at the final auction held prior to the June 1 preceding the July 1 of the year for which the rate will be effective, plus a statutorily defined "add-on." As noted, the add-on will differ depending on the type of loan and the student's grade level. Each loan type also has a maximum interest rate (or cap.)
The interest rate for a loan, once established, will apply for the life of the loan - that is, the loan will be a fixed-rate loan. As a result, it is likely that many borrowers will have a set of fixed-rate loans, each with a different interest rate, including the 3.4% and/or 6.8% Direct Subsidized and Direct Unsubsudized loans made prior to July 1, 2013.
The rates shown in the Federal Student Loan Comparison Chart are less than what they would have been without these changes. The new rate for Direct Subsidized Loans for undergraduate students is only 0.46% higher than the rate that applied to those loans prior to July 1, 2013.
Find out more about the most common student loans
Common Student Loans
Federal Direct Stafford Loan Program
A new time limitation has been placed on direct subsidized loans for first-time borrowers. If you are a first-time borrower, we encourage you to review the following materials in order to better understand this information: Direct Subsidized Loan Limit
The Federal Direct Stafford Loan is a low-interest education loan designed for both undergraduate and graduate students. Because this is a "government loan," the money you borrow is guaranteed by the federal government. Stafford loans are an extremely popular and cost-effective way to finance your education. More than 50% of all financial aid awarded at California University comes from the Federal Stafford Loan Program.
In order to be eligible for the Federal Direct Stafford Loan, the student must be enrolled at least half-time (6 credits for undergraduate students and 5 credits for graduate students) in a degree-seeking program.
There are two types of Stafford loans: subsidized and unsubsidized. Subsidized loans are offered only to undergraduate students. Depending on your household income, you may be eligible for one or both loans. The type of Federal Stafford Loan that you receive is determined by your FAFSA results.
- A subsidized Federal Direct Stafford Loan is awarded on the basis of financial need. The government pays the interest while you are in school, during any deferment, and during the grace period before repayment begins.
- An unsubsidized Federal Direct Stafford Loan is available to all students regardless of income. As the borrower, you are responsible for all interest that accrues while you are in school, while the loan is in deferment, and during the grace period.
There is a limit to the amount you can borrow with a Federal Stafford Loan during any given year.
Annual Stafford Loan Limits
Base Amount (Subsidized/Unsubsidized)
|Grade Level||Credit Hours||Annual Loan Amount|
|Up to $3,500|
|Up to $4,500|
60 or higher
Up to $5,500
Additional Unsubsidized Stafford Loan
|Grade Level||Credit Hours||Annual Loan Amount|
All Undergraduate Students
|Up to $2,000|
|Up to $20,500|
(Parents of Dependent Students Denied PLUS Loan)
|Credit Hours||Additional Unsubsidized Loan
(Parent PLUS Denial)
|Up to $4,000|
|Up to $5,000|
Please note- Stafford Base Amount*- can be subsidized and/or unsubsidized
Interest Rates and Fees for Federal Stafford Loans
The U.S. Department of Education charges fees of 1-2% on these loans.
Beginning July 1, 2012, the rate for the subsidized Stafford loans is 3.4% and unsubsidized Stafford loans is 6.8%. This may change beginning July 1, 2013 and updates will be provided via Email Announcements as well as on our website as we receive notification from the Department of Education on this matter.
Aggregate Loan Limits
This is the maximum amount of Federal Stafford Loans that a student can borrow for college.
Undergraduate dependent students may borrow a total of $31,000 in Federal Stafford Loans (no more than $23,000 of which can be subsidized).
Undergraduate independent students may borrow a total of $57,500 (no more than $23,000 of which can be subsidized).
Graduate students may borrow a total of $138,500.
Repayment Policy for Federal Stafford Loans
Once you graduate, withdraw or leave school, you will be granted a six-month grace period. During your grace period, your lender will provide you with a repayment disclosure statement containing your repayment terms, including the amount of your monthly payment and the due date of your first payment. Repayment of the Federal Stafford Loan begins at the end of this six-month grace period and usually extends up to 10 years. Generally, the minimum monthly payment is $50; however, you should talk to your lender to determine other flexible repayment terms that might be available.
Federal Direct PLUS Loan for Parents
The Federal Direct Parent PLUS Loan is a credit-worthy loan for the parent or legal guardian of a dependent student who has borrowed the maximum amount of Stafford Loan assistance. If you are a dependent student, your parent(s) can request up to your cost of education, less all other financial aid received.
A credit check is required to determine eligibility for this loan program. If the parent borrower is denied the Federal Direct PLUS Loan AND the parent has opted NOT to appeal the adverse credit decision OR seek an endorser, the financial aid office will automatically award the student additional unsubsidized Federal Stafford Loan funds.
The interest rate for Direct PLUS is fixed at 7.9%.
Repayment of the PLUS loan begins 60 days after the loan is fully disbursed for an academic year. However, an optional in-school deferment will delay payments on the PLUS loan until six months after the dependent student ceases to be enrolled at least half-time. To request an in-school deferment, please contact Direct Loan Borrower Services at 1-800-848-0979. Deferment must be requested on an annual basis, and may be requested 14 days after the loan has been disbursed to the student's account. Interest will continue to accrue on this loan during the deferment period.
Beginning with the 2010 Summer term, California University of Pennsylvania will process all Parent PLUS Loans through the Federal Direct Loan Program. Parents wishing to borrow to assist with their child's educational expenses will no longer borrow these funds from a bank, credit union or other lending institution. Your loan will be processed and funded directly with the US Department of Education. There are many advantages to this new program including lower interest rates, lower fees and faster processing.
1. Log onto https://studentloans.gov and complete a request for a Direct PLUS Loan. This application will initiate a credit check on the borrower.
2. If the loan is approved, complete your electronic Master Promissory Note (eMPN). This is also done at https://studentloans.gov. You will need your Federal Student Aid PIN to sign the promissory note.
3. If your application is not approved you will be given the option of appealing the decision or re-submitting the application with a credit-worthy endorser. If you elect to use an endorser, you can complete the Endorser Addendum online.
Federal Direct PLUS Loan for Graduate Students
Federal Direct Graduate PLUS Loan
(for graduate students only)
The Federal Direct Graduate PLUS Loan is a credit-worthy loan for a graduate student who has borrowed the maximum amount of Stafford Loan assistance. If you are a graduate student, you can request up to your cost of education, less all other financial aid received.
A credit check is required to determine eligibility for this loan program.
The interest rate for Direct PLUS is fixed at 7.9%.
Repayment of the PLUS loan begins 60 days after the loan is fully disbursed for an academic year. However, an optional in-school deferment will delay payments on the PLUS loan until six months after the student ceases to be enrolled at least half-time. To request an in-school deferment, please contact Direct Loan Borrower Services at 1-800-848-0979. Deferment must be requested on an annual basis, and may be requested 14 days after the loan has been disbursed to the student's account.
Beginning with the 2010 Summer term, California University of Pennsylvania will process all Graduate PLUS Loans through the Federal Direct Loan Program. Graduate students wishing to borrow to assist with their educational expenses will no longer borrow these funds from a bank, credit union or other lending institution. Your loan will be processed and funded directly with the US Department of Education. There are many advantages to this new program including lower interest rates, lower fees and faster processing.
In order to apply for a Graduate PLUS loan, borrowers will need to complete the steps below.
- 1. Log onto https://studentloans.gov and complete a request for a Direct PLUS Loan. This application will initiate a credit check on the borrower.
- 2. If the loan is approved, complete your electronic Master Promissory Note (eMPN). This is also done at https://studentloans.gov. You will need your Federal Student Aid PIN to sign the promissory note.
- 3. If your application is not approved you will be given the option of appealing the decision or re-submitting the application with a credit-worthy endorser. If you elect to use an endorser, you can complete the Endorser Addendum online.
Federal Perkins Loan
The Federal Perkins Loan is a federally funded low-interest loan usually reserved for the neediest students. California University of Pennsylvania is the lender, using funds from the federal government and/or payments collected from previous borrowers. The interest rate on the Perkins Loan is fixed at 5%, and repayment starts nine months after you leave school or graduate.
In order to apply for the Perkins Loan, you must complete the Free Application for Federal Student Aid (FAFSA) or the Renewal FAFSA for the appropriate school year. California University must receive the results of your FAFSA by our first-priority deadline of May 1. You must submit your FAFSA by April 1 to allow time for processing to meet this deadline.
California University usually awards Perkins Loans that range from $1,000 to $2,000 per year. The loan will be disbursed equally between the fall and spring semesters.
If you are awarded a Perkins Loan, you must complete a promissory note and entrance loan counseling online with ECSI. You will be able to complete, review and even print your promissory note on this site. https://www.ecsi.net/prom19/
When you graduate or leave school for other reasons, you must complete a Perkins Loan exit interview at Educational Computer Systems Inc.(ECSI), the Perkins Loan servicer. This exit interview will give you more information about your repayment options, deferments, cancellation provisions and more. You will be mailed a Perkins Loan exit interview packet after you apply for graduation. You must complete and return the forms in the packet in order to meet your exit interview requirement. Failure to do so will result in a "hold" being placed on your grades, diploma, etc. If you are leaving school for other reasons, such as transferring to a different school, you should contact the Bursar's Office at 724-938-4431 to make arrangements to complete your Perkins Loan exit interview.
Note: Exit interviews for Perkins Loans must be done through ECSI. The school code for California University of Pennsylvania is 19.
Private Alternative Loans
Before applying for a private or alternative education loan, you may qualify for grants and/or other assistance under Title IV of the Higher Education Act. Loans under Title IV include the Federal Stafford and the Federal PLUS loan. These Title IV loans may have terms and conditions that are more favorable than the terms and conditions of private education loans. The more favorable terms of Federal loans generally include the interest rate, fees, and repayment options such as deferments and forbearances. In addition, Federal loans may be eligible for loan repayment, loan forgiveness, or discharges due, for example, to total and permanent disability or to death.
All students are strongly encouraged to complete the Free Application for Federal Student Aid (FAFSA) each year. By completing the FAFSA, you are applying for federal and state aid including Pell grants, Stafford Loans, and other federally funded campus need and/or merit based aid. Parents of dependent students, as well as Graduate students, may also apply for Parent Plus or Graduate Plus loans.
In addition to the federal student loan programs, there are private, non-need-based loans that you and your parents can use to help pay for educational expenses. Since these loans are not subsidized by the federal government, they usually have a higher interest rate to the borrower and should only be considered as a last resort after all other financial aid options have been explored.
A private alternative loan is typically issued in the student's name and most often requires a credit worthy cosigner, who is a US citizen or permanent resident. Maximum loan amounts, loan terms, borrower qualification, repayment schedules, and interest rates vary among lenders. Repayment of principal and interest may be deferred in most cases. Having a credit worthy co-signer will likely reduce the cost of the loan (interest rate, up-front and back-end fees, etc.) Be aware that the co-signer is fully responsible for repaying the loan should the borrower stop making payments. There are some alternative loan products that offer a co-signer release option after a specified number of on-time payments are made and the borrower is credit-worthy.
Private Alternative Loan Considerations
- Apply with a credit worthy cosigner- Applying with a cosigner may provide you with an increased chance of approval and more competitive rates.
- Borrow only what you need to meet your educational costs.
- Do your research. Ask questions of your lender and find out which loan will benefit you the most.
- Be aware of interest rates, fees, and repayment terms before completing the application and promissory note.
- Monitor your total indebtedness to be sure you will be able to repay with interest.
- Cosigners are equally responsible for repayment of the loan and their credit is equally affected.
As part of the application process, students will be required to complete the Private Education Loan Applicant Self-Certification Form available through their lender's website. Students may also download and print a copy of the form online. Information needed to complete this form, such as cost of attendance and estimated financial assistance may be obtained via the Vulcan Information Portal.
Per HEOA regulations, lenders are required to provide borrowers with a three business day right-to-cancel period after the final disclosure of a private student loan. In addition, lenders are required to add an additional three business days for a borrower to receive the final disclosure. In most cases the disbursement process, which in itself may be another three day process, will begin on the eighth day. Borrowers should keep this timeline in mind if they are planning to use loan proceeds for other educational purposes.
You have the right to select the alternative lender of your choice. We have developed a list of participating Alternative/Private Education loan lenders for students who would like guidance in selecting loans. The list of lenders used by California University of PA students. Neither California University nor the Financial Aid Office intends any specific endorsement, recommendation, or promotion of these products by including lenders on this list. We encourage you to compare borrower benefits offered by any participating lender before deciding which lender to use. An alternative loan is an agreement between the borrower, co-signer (if any) and the lender. California University of PA cannot be held liable if the borrower is dissatisfied with the interest rates, other terms and/or service provided by the lender.
Below in an alphabetically arranged, comprehensive list of Alternative loan products that California University of PA students have utilized within the past three years. If you plan to apply for any alternative loan, please be sure to contact the lender directly. California University of PA and the Financial Aid Office do not endorse, promote, or recommend any of the loan products listed and their inclusion on this page is strictly informational.
Borrowers are encouraged to review the terms and conditions of each program prior to selecting a lender. You are not required to borrow from one of the loan programs listed below. Your choice of a lender other than those listed will not result in the denial or a delay of processing. Upon application, the lender of your choice will forward a certification request to the Financial Aid Office.
Credit Union Student Choice - lenders are credit unions nationwide and membership is required. Contact and Interest Rate disclosure information are available at the lender's site.
Credit Union Student Loans - lenders are credit unions nationwide and membership is required. Contact and Interest Rate disclosure information are available at the lender's site.
Sample Interest Rate Disclosure
Interest Rate Disclosure Information - Undergraduate Fixed
Interest Rate Disclosure Information - Undergraduate Variable
Interest Rate Disclosure Information - Graduate Fixed
Interest Rate Disclosure Information - Graduate Variable
New Jersey Class Loan - This is for students who are residents of New Jersey.
(If you are a resident of a different state, contact your home state higher education agency to see if it offers a private alternative loan option.)
Interest Rate Disclosure Information
Smart Option Lenders
(Partners include Dollar Bank, Fifth Third Bank, M&T Bank, Regions Bank, Sallie Mae, Commerce Bank , Erie Federal Credit Union , Pennsylvania State Employees Federal Credit Union, and State Employees Credit Union of Maryland)
Interest Rate Disclosure Information
Interest Rate Disclosure Information
California University of PA adheres to the Financial Aid Code of Conduct based on the Higher Education Opportunity Act of 2008.