College of Arts & Sciences

Educational Loans

Most students borrow to pay a portion of their school bill. Loans must be repaid; therefore, students are encouraged to borrow only what they need and only what they can afford to repay. Refer to your Financial Aid Award Letter to see what loans you are eligible to borrow.The following chart identifies some of the differences between educational loan programs.

Which loan should you use?

Type of Loan

Borrower

Fees

Make Payments while in School?

Interest Rate

Years to Repay

Bethel's Advice

Federal Perkins Loan

Student

None

5.0% fixed

10 years

1st Choice

Subsidized Federal Stafford Loan

Student

2.0%

6.0% fixed

10 years

2nd Choice

Unsubsidized Federal Stafford Loan

Student

2.0%

Interest accrues. Optional in-school payment.

6.8% fixed

10 years

3rd Choice

Federal Parent Loan for Undergraduate Students (PLUS)

Parent

4.0%

Yes

8.5% fixed

10 years

Compare the features and benefits.

Minnesota Student Education Loan Fund (SELF)

Student (and credit-worthy co-signer)

None

Pay quarterly interest

Variable (7.0% on February 1, 2008)

10 years

Compare the features and benefits.

Private Loans

Student (often requires credit-worthy co-signer)

Varies

Interest accrues. Optional in-school payment.

Varies based on market conditions and credit score.

Varies (10+ years)

Compare the features and benefits.

Federal Stafford Loan

(See the Stafford Loan webpage for more information, Bethel's list of preferred lenders, and the application procedure.)

Eligibility: The federal government pays the interest for students demonstrating financial need (Subsidized Federal Stafford Loan) until students enter repayment (six months after graduation or dropping below half time). Students who do not qualify for the interest subsidy may borrow an Unsubsidized Federal Stafford Loan (the government does not pay the interest). Student must be enrolled at least half time.

2008-2009 Maximum Annual Loan Limits:

	Dependent Student	Independent Student
1st Year	$5,500 - No more than $3,500 of this amount may be subsidized	$9,500 - No more than $3,500 of this amount may be subsidized
2nd Year	$6,500 - No more than $4,500 of this amount may be subsidized	$10,500 - No more than $4,500 of this amount may be subsidized
3rd and 4th Years (each)	$7,500 - No more than $5,500 of this amount may be subsidized	$12,500 - No more than $5,500 of this amount may be subsidized
Maximum Total Stafford Loan Debt When You Graduate	$31,000 - No more than $23,000 of this amount may be in subsidized loans	$57,500 - No more than $23,000 of this amount may be in subsidized loans

Features: Stafford Loans disbursed after July 1, 2006 have a fixed interest rate for the life of the loan. The interest rate for undergraduate students for loans disbursed from July 1, 2008 to June 30, 2009 is 6.0% for subsidized and 6.8% for unsubsidized Stafford loans. Stafford Loans are made through a bank, savings and loan, or credit union.

Federal Perkins Loan

(See the Perkins Loan webpage for more information and the application procedure.)

Amount: Bethel awards eligible freshmen up to $2,000 and sophomores up to $1,000.
Eligibility: Must demonstrate financial need. Due to limited Perkins Loan funds, Bethel gives priority to freshmen and sophomores who meet the April 15 financial aid application deadline.
Features: Federal government pays the interest until repayment begins nine months after student graduates, withdraws, or drops below half time. Five percent interest with up to 10 years for repayment.

Federal PLUS Loan

(Parent Loan for Undergraduate Students)

(See the PLUS Loan webpage for more information, Bethel's list of preferred lenders, and the application procedure.)

Amount: Cost of attendance minus other aid
Eligibility: Parent of dependent student(s). Student must be enrolled at least half time.
Features: Since July 1, 2006, PLUS (Parent) Loans have an 8.5% fixed interest rate. Repayment of principal and interest begins 60 days after loan is fully disbursed (approximately April 1).

Private Student Loans

(See the Private Loan webpage for more information, Bethel's list of preferred lenders, and the application procedure.)

Amount: Cost of attendance minus other aid
Features: Variable interest rates. Repayment generally begins after student graduates. Student responsible for interest while enrolled. Fees and interest rates vary depending on lenders and credit check. Co-signer required by some lenders.

Supplemental Education Loan Fund (SELF)

(See the SELF Loan webpage for more information and the application procedure.)

Amount limits: The minimum loan amount is $500. Undergraduates may borrow up to $7,500 each year. In addition, students may not borrow beyond the sum of their annual loan limits.

Eligibility: The SELF Loan is available to students enrolled at least half time, pursuing a degree or certificate. Students must have a credit-worthy co-signer.
Features: Students are required to make quarterly interest payments on their SELF loan while enrolled. The interest rate is variable, adjusted quarterly. SELF Loans are provided through the Minnesota Office of Higher Education.

Emergency Loan

Amount: Up to $500
Eligibility: Any currently enrolled Bethel student, for qualifying emergencies
Features: Must be repaid in 60 days. A service charge is applied.

Choosing a Lender

To assist students in selecting a lender, the financial aid office conducts an annual evaluation of potential lenders. All preferred lenders must satisfy the following expectations:

Provide cost-saving benefits for borrowers. Examples may include payment or rebate of loan fees, rebates of principal, and interest rate reductions.
Demonstrate a commitment to helping borrowers avoid going into default (e.g., proactively contacting borrowers who are late on payments, providing resources that help borrowers manage their money and avoid borrowing too much).
The lender representatives are actively involved in the Minnesota Association of Financial Aid Administrators. This provides a clear indication of the lender's commitment to advance higher education in Minnesota, and to cultivate productive, healthy relationships with Minnesota's financial aid administrators.
Does not sell or share borrower information without the prior consent of the borrower.
Demonstrate the commitment and ability to provide educational loans for the long term.
Clearly communicate the terms and conditions of their educational loans.
Provide high levels of customer service, including, but not limited to, online loan applications, access to loan status online, disbursement of loan funds via electronic funds transfer, online loan information tailored specifically for Bethel borrowers, and prompt response to any loan processing issues identified by our borrowers or our staff.

In addition, we have a strong preference for working with lenders that are familiar to our borrowers (name recognition), partner with guarantee agencies located in Minnesota, service all their educational loan products at one location, provide full-service banking options, and are recommended by our students.

Students are free to select any lender for their educational loans. However, after a thorough review of lender data, we encourage borrowers to strongly consider one of the following lenders to ensure that they receive the highest level of customer service, avoid delays in processing loans, and have access to the best borrower benefits available to Bethel students.

2008-2009 Preferred Lenders

Citibank	800.967.2400	www.bethel.edu/finaid/citibank
U.S. Bank	800.242.1200	www.bethel.edu/finaid/usbank
Wachovia Education Finance	800.338.2243	www.bethel.edu/finaid/wachovia
Wells Fargo	800.658.3567	www.bethel.edu/finaid/wellsfargo