Office of University Financial Aid
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.
|
Type of Loan |
Borrower |
Fees |
Make Payments while in School? |
Interest Rate |
Years to Repay |
Bethel's Advice |
|
Federal Perkins Loan |
Student |
None |
No |
5.0% fixed |
10 years |
1st Choice |
|
Subsidized Federal Stafford Loan |
Student |
2.0% |
No |
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. |
(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.
(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.
(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).
(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.
(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.
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.
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:
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 |