Various loan programs are available to students attending Allen University. Unlike grants and scholarships, loans must be repaid. Outlined below are the various loan programs and their stipulations.
Subsidized Direct loans are based on demonstrated financial need. The interest and payments are deferred while the student is enrolled. Repayment begins 6 months after the student ceases to be enrolled at least a half-time. A student can borrow up to $3, 500 for his or her first year of attendance, $4,500 for the second year, and $5,500 the third and fourth years. A student can borrow an aggregate of $23,000 for his or her undergraduate study.
Federal Direct Unsubsidized Direct loans are non-need based loans. Interest on unsubsidized Direct loans accrues while the student is enrolled. Repayment begins 6 months after the student ceases to be enrolled at least half-time. If a dependent student does not qualify for a subsidized Direct loan, the dependent student may borrow from this program at the same loan limits as the Federal Subsidized Direct Loans. An independent or qualified dependent freshman or sophomore student may borrow up to $6,000 per academic year. The undergraduate loan limit for an independent or qualifying dependent student in his or her third year and beyond is $7,000 per academic year.
Parents of dependent children can borrow up to the difference between the student’s cost of attendance and financial aid awarded. Loans are made co-payable to the school and parent and have variable interest rates not to exceed 12%. Deferment options may be available depending on the lender.
Alternative loans are private loans offered through banks and other organizations. A private student loan is available for a student (at the age of majority), his or her parents or guardian, or related ”co-maker.” Individuals can borrow from $2,000 to $15,000 per academic year, based on cost of attendance minus other financial aid. Rates, repayment plans, and borrowing limits vary by lender.
All loans except the PLUS Loan are borrowed in the student’s name and are the student’s responsibility. Not repaying a student loan can seriously damage a student’s credit rating. Defaulted loans also endanger the availability of future financial aid at Allen University.