Non-Need Based Federal, State and Alternative Loan Information
Private Educational Loans are now required to disclose certain information that is intended to protect your rights and interests. These disclosures may delay the processing of your loan if you do not respond to requests promptly. These additional requests clarify your responsibilities, provide specific information about repayment and allow a time to refuse the loan if you change your mind. You should read all disclosure information carefully before accepting any loan. In addition, prompt responses will allow loans to be processed more quickly.
Some loans will ask you to complete a Self-Certification form to report your cost of attendance and the aid you currently receive. That information can be retrieved on the Carleton Hub and reported to your lender. If your lender does not provide you with a Self-Certification form, one can be obtained here.
Private Loans can also be referred to as Alternative Loans. Carleton has a recommend lender list which includes the Minnesota Office of Higher Education and Wells Fargo. Even though Carleton has a recommended lender list, we will process loans from any lender you choose. Please note that in many cases, Carleton’s involvement in the completion of private loan applications is minimal and specific questions about a loan should be made directly to the lender.
FEDERAL DIRECT STAFFORD UNSUBSIDIZED LOAN
Federal Direct Stafford Unsubsidized loans are available to students (U.S. citizens and eligible non-citizens) who do not demonstrate financial need. To be eligible, students must complete the Free Application for Federal Student Aid (FAFSA). Students are responsible for paying the interest that accrues on the loan from the time the loan is disbursed until it is paid in full. Or, students may allow the interest to accrue and have the interest added to the principal amount of the loan (capitalized) at repayment. The Federal Direct Stafford Unsubsidized loan has a fixed rate of 4.29% for loans disbursed in 2015-16 with flexible repayment terms. You can find more detailed information about Federal Direct Stafford Unsubsidized loans here. You can begin the applications process here.
FEDERAL DIRECT PLUS LOANS
Federal Direct Parent Loans for Undergraduate Students (PLUS Loans) are federally funded loans made available to parents (and stepparents listed on the FAFSA) to assist with meeting their family contribution. A completed FAFSA is required to process a Federal Direct PLUS Loan application. Federal Direct PLUS Loans are low interest rate loans that allow parents to annually fund the entire cost of their dependent, undergraduate student’s education (less any scholarships or other financial aid). The educational expenses that can be financed with a Federal Direct PLUS Loan include tuition, fees, room and board, books, supplies, transportation and personal expenses. Federal Direct PLUS Loans are not based on income or assets and Federal Direct PLUS borrowers do not need collateral. 2015-16 Federal Direct PLUS Loans have a fixed interest rate of 6.84% and have up to a 10 year repayment schedule with no penalty for pre-payment. Interest may be tax deductible for families who fall within certain income levels. You can find more detailed information about Federal Direct PLUS loans here. You can begin the applications process here.
PRIVATE ALTERNATIVE LOANS
Private alternative loans provide another way to help students finance a Carleton education. There are many private alternative loans available to students through a variety of lenders. Carleton does not endorse or promote any private alternative loan program or lender, and borrowers are encouraged to review the federal loan options before considering private alternative loans since federal loans may have more favorable terms and conditions. If a Carleton student elects to borrow a private alternative loan, the student may choose any private alternative loan program or lender.
As a service to our students, Carleton's Student Financial Services Office evaluated a number of lenders and determined the lenders on the Carleton Alternative Lender List as offering good terms. Carleton does not endorse any particular lender(s) and receives no benefits from the lenders listed:
Minnesota Office of Higher Education (MOHE)
You can compare the loans above and find applications here.
Before applying for any loan, be sure you understand the repayment terms, conditions, and payment amounts. The payment amount is affected by the interest rate, the amount borrowed and the length of repayment. Common loan characteristics to be aware of when researching loan options include:
- Usually loan is made in student’s name
- Many require a co-signer
- Having a co-signer may result in a better interest rate
- Credit check usually required of student and co-signer
- Interest rates vary and typically are determined by results of credit check
- Interest rates are usually variable, adjusting quarterly, monthly, or annually, and are based on current LIBOR or Prime rates
- Interest begins to accrue once loan is disbursed
- Some require payments while student is in college
If you are interested in exploring alternative loans other than the ones listed on Carleton's Alternative Lender List, you can also inquire about private alternative loans from your state higher education department or your local banks and credit unions. Carleton does not endorse any lender and provides this information only as a courtesy for our students. As with any borrowing decision, make sure you understand all the loan terms before signing.
Once you decide on a loan program and lender, you can also find a useful calculator to calculate monthly payments and determine the cost of your loan at Finaid.org.