The U.S. federal government offers both Direct Student loans and Parent PLUS loans. These are loans for educationally related expenses to supplement your personal and family resources, scholarships, grants and work-study programs. There are also alternative private loan options but they tend to be more expensive than federal government loans.
Federal Direct Student Loans
Federal Direct Student Loans are loans made available to college students and are to be used for educationally related expenses to supplement personal and family resources, scholarships, grants, and work-study. They may be subsidized by the U.S. government or may be unsubsidized depending on the student’s financial need.
All students who submit a valid FAFSA are eligible.
Both subsidized and unsubsidized loans are guaranteed by the U.S. Department of Education directly and both types offer a grace period of six months, which means that no payments are due until six months after you graduate, leave school, or drop below half-time enrollment.
Both types have a fairly modest annual limit. The limit for the academic year is $3,500 per year for freshman undergraduate students, $4,500 for sophomore undergrads, and $5,500 per year for junior and senior undergrads. An increase in undergraduate loan limits due to new legislation H.R. 5715 “Ensuring Continued Access to Student Loans Act of 2008” raises the annual unsubsidized Direct Loan amount by an additional $2,000.
If you are an independent student as determined by the FAFSA, or a dependent undergraduate whose parents are unable to borrow under the Federal Direct Parent Loan for Undergraduate Students (PLUS) program, you may be eligible to borrow additional amounts under the unsubsidized Federal Direct Student Loan program.
The aggregate amount you can borrow for all undergraduate study for dependent students whose parents have not been denied a PLUS loan, is $31,000. Changes under H.R. 5715 are effective July 1, 2008. Contact the Office of Admissions and Financial Aid for additional information.
Subsidized federal student loans are offered to students with a demonstrated financial need. For these loans, the federal government makes interest payments while the student is in college. For example, those who borrow $10,000 during college will owe only the principal amount of $10,000 when they leave school.
Unsubsidized federal student loans are also guaranteed by the U.S. government, but the government does not pay interest for the student, rather the interest accrues during college. Those who borrow $10,000 during college will owe $10,000 plus interest upon graduation.
For example, those who have borrowed $10,000 and had $2,000 accrue in interest will owe $12,000. Upon graduation, interest will begin accruing on the $12,000. The accrued interest will be “capitalized” into the loan amount, and the borrower will begin making payments on the accumulated total. Students can choose to pay the interest while still in college.
The interest rate for new Federal Direct Subsidized and Unsubsidized loans first disbursed on or after July 1, 2022, and prior to July 1, 2023, for undergraduate students, is a fixed rate of 4.99%.
Origination FeesFor loans disbursed on or after October 1, 2020 and before October 1, 2023, the origination fee will be 1.057%.
To apply for a Direct Student Loan at New College, you must:
- Complete a FAFSA and submit it to New College using the code 039574.
- Complete and submit verification paperwork and supporting documents if selected.
- Complete the online Entrance Interview here if you have never borrowed a Direct Loan before.
- E-sign a Master Promissory Note (MPN) here with the U.S. Department of Education.
- Once you have registered and completed the requirements listed above, accept your loan offer on your student NEWcleis account. Loans are generally available to accept online starting one month prior to the beginning of the fall semester.
Your federal student loans from previous years should remain in deferment as long as you are enrolled at least half time. You are responsible for notifying your lender if your enrollment status changes. Many Federal Family Education Loan (FFEL) Program lenders have sold their loan portfolios to the Department of Education for servicing.
You will have the option of making separate payments to each agency/loan servicing company or you can also opt to consolidate all loans into one loan. You can find information about the servicers of federal loans at www.studentaid.gov. You will need your Federal Student Aid ID from the FAFSA to access this site.
Federal Parent PLUS Loans
One option to cover your student’s college expenses is the PLUS Loan. PLUS Loans are designed for parents of undergraduate dependent students to borrow funds to help pay for their student’s college education. You must be a U.S. citizen, or eligible noncitizen to qualify.
Eligibility is not based on financial need, however credit guidelines will apply in determining your eligibility. A parent with an adverse credit history who is denied a PLUS Loan will be notified of that denial. In the case of a denial, there is an option of obtaining an endorser. More information on this option is available at www.studentaid.gov. In the event that your credit is denied and the endorser option is not used, please contact the Financial Aid staff to request additional unsubsidized Direct Student Loan for the student.
Parents may borrow an amount equal to the cost of attendance minus any other aid. Consider your other loan payments when determining your borrowed amount and do not overextend your ability to repay your total indebtedness. If the PLUS Loan will be borrowed each year that the student is enrolled, please include those future loan amounts when determining your total indebtedness.
A credit review is required by the Department of Education as part of the PLUS application process. The credit review is valid for a period of 180 days, during which a Master Promissory Note (MPN) must be activated.
New College does not certify loans until mid-August before the start of the academic year. If we certify your loan after the credit review expires, the Department of Education is required to do another. A new MPN may also be required.
Your Federal Student Aid ID (FSAID). Information on creating, using, or unlocking your FSAID can be found here.
PERSONAL INFORMATION- Permanent address
- Mailing address (if different from permanent address)
- Telephone Number
- Email Address
- Alien Registration Number (if you are an eligible noncitizen)
- Social Security Number
- Employer Name
- Employer Address
Student Information
- Student first name, middle initial and last name
- Student Social Security number
- Student date of birth
- Student address
- Student telephone number
Reference Information for two people with U.S. address who have known you for at least 3 years. Do not list the Direct PLUS Loan borrower or the dependent undergraduate student as a reference.
- Reference Names
- Reference Addresses
- Reference Telephone Number
The student on whose behalf you will complete the PLUS loan application must have submitted a FAFSA for the current academic year. If selected, verification paperwork and supporting documents must be finalized. The student must also accept or decline their offered federal student loans before a PLUS loan can be certified and processed.
Click here to apply for a PLUS loan.
Please contact the Financial Aid staff once an application has been made. All new and continuing borrowers will be required to complete a Federal Direct Parent PLUS Loan Master Promissory Note (MPN); this is required, even if you have borrowed from the Federal PLUS Loans in the past.
Interest Rate For Direct PLUS Loans first disbursed on or after July 1, 2022, and before July 1, 2023, the interest rate is 7.54%.
Origination Fees There is a loan fee on all Direct PLUS Loans. The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement. The percentage varies depending on when the loan is first disbursed:
— For a Direct PLUS Loan with a first disbursement date on or after Oct. 1, 2020, and before Oct. 1, 2023, the loan fee is 4.228%.
Loan Disbursements The loan funds will be electronically sent to New College. The loan will be disbursed in two installments, half in the Fall semester and half in the Spring semester.
Repayment Repayment begins within 60 days after the final loan disbursement. There is no grace period for these loans. However, you may request a deferment in certain circumstances. In order to find out more information about repayment, please visit https://studentaid.ed.gov/sa/repay-loans/understand.
Alternative Private Loans
Alternative loans are loans from a lending institution; they are not a part of the federal government guaranteed loan programs. Alternative loans are typically more expensive than federal government loans and should only be used when all other options have been exhausted.
It is important for you to check with the Financial Aid staff for all federal loan programs and possibilities before you borrow from an alternative loan program. Most alternative loans require a good credit history and/or a credit worthy co-signer. An alternative loan is not based on need, but it cannot exceed the difference between the cost of attendance and all other financial aid for the academic year. If you need an alternative loan, choose the loan that best meets your needs and remember – borrow only what you need!
- Apply early!
- Research alternative loans. Each lender offers different borrower benefits.
- Title IV school code is 039574.
- As soon as you apply for an alternative loan, contact Financial Aid staff so they can certify the application.
- Borrow wisely! You may borrow an amount equal to the cost of attendance minus any other aid. Consider your other loan payments when determining your borrowed amount and do not overextend your ability to repay your total indebtedness.
- The loan funds will be sent to New College. In most cases, the loan will be disbursed in at least two installments, one in the Fall semester and one in the Spring semester.
A wide and growing array of alternative loan products are now in the marketplace. New College of Florida processes loans for more than 10 different alternative loan lenders annually. For information about how to choose a private alternative loan lender visit www.finaid.org/loans/privatestudentloans.phtml.
