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Loan Funding Options for
Dependent & Independent Undergraduate Students

Dear Student:

After reviewing your financial aid award and your estimated eligibility for the Federal Stafford Loan, you may find it necessary to explore additional financial aid options. If you find that the funds offered to you from Jefferson and/or federal financial aid sources, are insufficient to meet your education costs, you and your parents may want to consider applying for a Federal Direct Parent PLUS loan or an alternative (private) educational loan.

Federal Direct Parent PLUS loans are non-need credit based loans borrowed by the parent on behalf of a dependent undergraduate student only. These loans may only be borrowed from the Federal Direct Loan Program. In addition to other financial aid, parents may borrow up to the student's cost of attendance through a PLUS loan. Payments may be deferred while the student is in school. The interest rate on this loan for loans disbursed between 7/1/13 and 6/30/14 is 6.41%. The interest rate assigned to the loan at disbursement is a variable rate based on the 10 year Treasury bill, but the calculated rate at disbursement will remain fixed for this disbursed loan until the loan is repaid. PLUS loans disbursed between 7/1/14 and 6/30/15 will be assigned a new variable rate based on that year's average auction price of the 10 year Treasury bill.

If for any reason this loan is denied, the Financial Aid Office may be able to process Federal Unsubsidized Stafford Loan funds in place of a denied PLUS loan (up to $7000) with proper documentation from the lender of the loan denial. This application will be available after May 1 for each new academic year.

Alternative loans are private, non-need, credit-based funds borrowed by the student to meet educational costs. However, the lender may require a cosigner. In addition to other financial aid, students may borrow up to their cost of attendance through an alternative loan. Please be advised that alternative loans will accrue interest while enrolled in school and do have a variable interest rate, changing as frequently as every 3 months. Currently, interest rates are between 3.25% and 12.5%, depending on lender and your credit history. Additionally, lending institutions will use credit scoring to determine your eligibility for an alternative loan. Therefore, a good credit status is absolutely necessary.

Both the PLUS and the Private Loan can be applied for online. The PLUS application can be completed at the Student Loans site. The PLUS loan must be borrowed with Direct Loans. Suggested private lenders Web sites are indicated below. Typically, only one of these sources is used for additional loan funds. The Financial Aid Office highly recommends using any of our suggested lenders for these private educational loan programs. This recommendation is based on their lower rates and excellent service to students and families. However, the choice of a lender always rests with the borrower. The Financial Aid Office will process private loans through any lender selected by a student.

If you or your parent(s) are concerned about eligibility for either of these loans based on an uncertain credit record, our office highly recommends you complete the pre-approval application process after May 15 with the lender you decide to use. You may also want to go to Annual Credit Report for a free copy of your credit report including all three credit bureaus or go to FICO to get a copy of your credit score. We suggest the following private lenders and their Web sites are as follows:

Citizens Bank (Private loan only)
Discover Student Loans
(Private loan only)
PNC Bank
(Private loan only)
SunTrust Bank
(Private loan only)
Union Federal (Private loan only)
Wells Fargo/Alternative Loan for Health Professions (Private loan only)

Once on the private lender's website, please follow the instructions on how to apply for the private alternative loan. Please use our school code, 01239302. If you have been pre-approved for the loan you applied for, the lender will automatically mail you a pre-printed application/promissory note for signature and return it per the instructions given by the lender. Private Alternative loan applications can be e-signed directly on the lender web page.

If you have any questions regarding this process or general financial aid questions, please do not hesitate to contact us at (215) 955-2867 or financial.aid@jefferson.edu.

Federal Parent PLUS and Private Loans: Which do you borrow? Which is best for you?

If after you have applied for a Federal Stafford Loan, you still need additional funds to cover your remaining educational expenses as included in your Student Expense Budget, you may want to consider either a Federal PLUS Loan or a Private Alternative Loan. Students/parents don't usually borrow both but instead choose one loan that they are most comfortable and feel that the terms better fit their borrowing preferences.

  Federal Parent PLUS Loan Private Loan
Borrower PARENT is borrower for dependent undergraduate student – Parents only Student is borrower.
Lender The Federal Direct Student Loan Program must be used to apply for the PLUS loan as mandated by new federal regulations. May choose any lender who offers Private Educational Loans. See our suggested list of lenders.
Credit check Eligibility based on approval of credit history (no accounts in default, collections status, charge off, write off, or 90-days past due status), not credit score; if credit requirement not met, a credit-worthy endorser is an option for eligibility (an endorser, unlike a co-signer, is not liable for repayment.) Credit approval based on credit score and history; a credit worthy co-signer, who agrees to be liable for the loan, may be required for best terms or eligibility.
Annual maximum Cost of attendance less financial aid. Generally, cost of attendance less financial aid.
Aggregate maximum None Varies by lender
Interest Rate Variable-fixed rate based on average auction price of the 10 year Treasury Bill. For loans disbursed between 7/1/13 and 6/30/14, the interest rate is 6.41% This rate will remain on this disbursed loan until the loan is repaid in full
Varies by lender, credit score, and co-signer status - Most lenders offer a variable interest rate that change as often at 4 times a year. Usually there is no ceiling on private loans.
Fees 4.288% origination fee as mandated by the federal government. Varies from 0%-5% for origination and/or repayment fees, according to the lender, student's credit score, and whether the loan is co-signed.
Deferment and forbearance In-school deferment and possible 6-month forbearance to align with other Federal Stafford loans that have a grace period. Generally, not available, but some lenders may offer forbearance.
Grace period None Varies by lender between 6-9 months.
Repayment terms Choice between standard, graduated, extended, and income-contingent terms. Varies by lender; sometimes interest-only payments allowed during early years.
Repayment period 10-25 years depending on repayment option chosen and amount owed. Varies 10-25 years, according to the lender and amount owed.
Eligible for federal consolidation Yes No
Death/disability Cancelled if borrower dies or becomes totally, permanently disabled. Most loans are insured against death or disability
Promissory note Master promissory note (MPN) covers multiple direct loans up to 10 years. However, a new application must be completed each year due to credit check requirements. New application and promissory note must be completed each year.

Need Help?

If you have any questions regarding these loan programs or completing your loan MPN or other loan application, please contact the University Office of Financial Aid at (215) 955-2867 or financial.aid @jefferson.edu.

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