A loan is financial assistance that enables students and/or parents to borrow money from the federal government or a private lender. These loans must be repaid. Borrowers are responsible for signing a Master Promissory Note for each loan program. When signed, the Master Promissory Note is a binding, legal document through which the borrower agrees to repay the loan. The promissory note should be read carefully and a copy retained for the borrower’s records. Please note students who are non-degree seeking or do not quality for federal assistance are only eligible for alternative loans in most cases.
Students must be enrolled at least half-time (6 undergraduate hours, 4.5 graduate hours) each term to qualify for federal loans. If you request a loan, we will always recommend the best loan program for which you are eligible. Not all students are eligible to borrow from all loan programs.
Federal Direct Stafford Loans
The federal Direct Stafford Loan Program is the most widely-used loan for college students and is available to both graduate and undergraduate students. There are two types of federal Direct Stafford loans and your eligibility for both is determined using the results of your financial aid application (FAFSA).
- Direct subsidized loans are interest-free while you are enrolled in college at least half-time, and are only available while you are an undergraduate student.
- Direct unsubsidized loans accrue interest while you are enrolled. You can choose to pay the interest each month while in school, or allow the interest to accumulate.
Borrowing limits for each academic year depend on your class level:
- $5,500 Freshmen (maximum $3,500 may be subsidized)
- $6,500 Sophomores (maximum $4,500 may be subsidized)
- $7,500 Juniors/Seniors (maximum $5,500 may be subsidized)
- $20,500 Graduate Students—unsubsidized only
Interest rates and fee
- 0% interest rate while you are enrolled at least half-time
- 3.4% interest rate during a six-month grace period after you leave school and during repayment
- 1.0% origination fee will be deducted from each disbursement
6.8% interest rate while you are enrolled at least half-time, during a six-month grace period after you leave school, and during repayment
1.0% origination fee will be deducted from each disbursement
No credit check required. If you are not in default on a prior educational loan, do not owe a repayment of federal grant funds, and meet federal aid eligibility requirements, you will be approved to borrow the Direct Stafford loan.
No payments required while you are enrolled at least half-time. Repayment begins six months after you graduate or drop below half-time enrollment. The standard repayment period is ten years. You can apply with Direct Loans for temporary deferment of payments if you enroll in graduate school at least half-time, become unemployed, experience economic hardship, or meet other approved criteria.
Loan Disbursement Rules
Loan funds will be disbursed directly to your AUM student account. However, loan funds for first-time, first-year undergraduate student borrowers may not be released until 30 days after the first day of classes for their first semester. Undergraduate borrowers must be enrolled for at least 6 hours for the loan funds to be disbursed. Graduate borrowers must be enrolled at least 4.5 hours of graduate coursework for loan funds to be disbursed.
A promissory note or agreement to repay the loan must be completed and signed prior to the loan approval and disbursement process.
Students must also complete online Federal Direct Stafford Loan Entrance Counseling before funds can be disbursed by Direct Lending.
Loans approved for a single semester are disbursed in two equal payments: the first payment is disbursed at the beginning of the term or loan period, and the second payment is disbursed at the midpoint of the term or loan period.
Federal Perkins Loan
The student loan program with the best available terms is the federal Perkins loan. If your aid application (FAFSA) shows that you have sufficient computed financial need, we may offer you a Perkins loan as part of your financial aid package. The pool of available Perkins loan funds is limited, so not all eligible aid applicants can be offered a Perkins loan.
Here are some of the attributes of federal Perkins loans at AUM:
5.0% fixed interest rate during repayment. No interest is charged while you are enrolled in college at least half-time or during the nine-month grace period after you leave school.
No credit check required. If you are not in default on a prior educational loan, do not owe a repayment of federal grant funds, and meet federal aid eligibility requirements, you will be approved to borrow the Perkins loan.
No payments required while in school. Repayment begins nine months after you graduate or drop below half-time enrollment and lasts up to ten years, with a minimum monthly payment of $50. You can apply for deferment of your repayment while enrolled in a graduate or professional program or if you become unemployed.
Federal Direct PLUS Loans
The federal Direct PLUS program is a popular financing option for graduate students, and parents of undergraduate students.
- Borrow any loan amount up to the total student budget determined by AUM, less any other resources or aid awarded.
- 7.9% fixed interest rate
- An origination fee of 4.0% will be deducted from each disbursement.
- A credit check is conducted when you begin the loan application process. For more information about the credit check please visit the FAQ section of Studentloans.gov.
- Undergraduate students are required to complete the Free Application for Federal Student Aid (FAFSA) in order for their parents to use the Direct PLUS loan program.
- Undergraduates whose parents do not qualify for a Direct PLUS loan can borrow additional federal Direct Stafford loan funds.
For graduate students, repayment begins 60 days after the loan is fully disbursed and lasts ten years. You can postpone payments of your Direct PLUS Loan while you are in school with an in-school deferment.
For parents of undergraduate students, repayment begins within 60 days after your loan is fully disbursed and lasts ten years. Parent borrowers may contact the Direct Loan Servicing Center to request deferment of monthly payments while the student is in school.
Private Student Loans
Private student loans should be considered "last resort" opportunities. You should utilize all other financing options before applying for a private product. Remember, federal student loan programs are less expensive that private loans and should be considered first. Private loan interest typically begins accruing immediately and fluctuates with market rates. Undergraduate private loan borrowers will typically be required to have a cosigner.
The lender, not AUM, determines eligibility for a private student loan. However, the university is required to certify your enrollment and calculate the amount you can borrow. The total loan amount is limited to cost of education minus financial assistance. Private student loan checks are mailed directly to the AUM Cashier Office, and require both the university and student must endorse the check for the funds to be applied to the student AUM account.
The university does not endorse or recommend any specific private loan lenders or products. To link to a nonprofit, independent website than provides information about private student loan programs and offers a comparison calculator, click here.