What is a student loan?
A loan is borrowed money that must be repaid with interest. Student loans are financial aid that you and, in some cases, your parents borrow and repay with interest. Some student loans require that you demonstrate financial need, which is determined by subtracting your Expected Family Contribution (EFC) from your estimated cost of attendance at UNT Dallas, while other student loans do not require you to have financial need. There are two major categories of student loans: federal loans and private loans.
Loans can be used by the student to supplement educational expenses that were not covered by grants, or to assist students that were not eligible for grants. When a student is awarded a loan they are not required to accept it. Students also have an option of reducing the loans that they were offered. In order to be eligible for loans, the student must be enrolled at least half-time. Students will need to contact the financial aid office and lender if they graduate, withdraw, or drop below half-time. A six month grace period begins once the student falls into any of these categories before the first payment is required. Below is information to assist students in the decision making process.
Direct Loans are low-interest loans that are lent to the student and parent (Direct Parent PLUS Loan) from the U.S. Department of Education rather than a bank or other financial institution. As with other federal student aid, Direct Loans are applied for by filling out the FAFSA. Undergraduate students that are eligible for loans in their award package are considered for subsidized, unsubsidized, and an estimate of the Parent PLUS loan. Graduate students are awarded unsubsidized loans. A request must be made to the financial aid office to see if the student is eligible to receive the Graduate PLUS Loan.
Direct Loan Program
The University of North Texas at Dallas participates in the William D. Ford Federal Direct Loan program which allows you to borrow loan funds directly from the U.S. Department of Education. This program will give you and your parents a more stable, streamlined, and predictable borrowing experience. Read the FAQ's about the Direct Loan program.
Federal Direct Loans
- Direct Subsidized Loan – This loan is based on need. No interest is charged on the loan while the student is enrolled in school at least half-time, during the grace period, and during deferment periods.
- Direct Unsubsidized Loan – This loan is not based on need. Interest on this loan is charged during all periods, even during the time a student is in school and during grace and deferment periods.
- Direct Loan Parent (PLUS) – This is an unsubsidized loan for the parent of dependent students. PLUS loans assist in the educational expenses up to the cost of attendance minus all other financial assistance that is awarded to the student. Interest on this loan is charged during all periods. Payment begins 60 days after disbursement of the loan. Parents can request a deferment on this loan by contacting the lender. This loan is based on credit.
- Direct Loan Grad (PLUS) – This is an unsubsidized loan for the student. Plus loans assist in the educational expenses up to the cost of attendance minus all other financial assistance that is awarded to the student. Interest on this loan is charged during all periods. Payments can be deferred for this loan.
Private Student Loans
- Alternative or private loans are initiated by the borrower through a private lender. Interest rates on these loans can vary depending on the lender and the credit history of the borrower. Repayment terms can also vary depending on the lender. Once the credit is approved and the promissory note is received by the lender they will send a certification request to UNT at Dallas. Private loan funds will be released to the students account only if all loan eligibility requirements are met at the time of disbursement. This loan cannot be consolidated with Direct Loans.
Required Documents Before the Direct Loan Will Disburse
Federal Regulations require that an entrance counseling and Master Promissory Note be completed for all first time borrowers. The entrance counseling is used to educate the student of the entire borrowing process and their repayment options. The only Direct Loan that does not require entrance counseling is the Direct PLUS Loan for parents. UNT Dallas requires all new borrowers to complete an entrance counseling if they are borrowing from UNT Dallas for the first time to ensure that they understand the rights and responsibilities that the student will incur when they accept their loan. This can be completed after the student has accepted their loan by visiting www.studentloans.gov.
Federal Regulations also require borrowers to complete a Master Promissory Note (MPN). The MPN is a legal document in which the student/parent promises to repay the loan and any interest or fees that have accrued on the loan. This document also explains the terms and conditions of the loan. An MPN is good for 10 years from the date that it was endorsed. The MPN can be completed at www.studentloans.gov approximately one day after the loan has been accepted. The FSA ID that was used to sign the FAFSA is also used to sign the MPN.
Direct Loan Aggregate Limits
The federal government has an annual and lifetime limit on subsidized and unsubsidized loans. Parent PLUS and Grad PLUS loans currently do not have a lifetime aggregate limit. Below are the yearly and lifetime aggregate limits for students.
|Dependent Student||Independent Student|
|Year of Education||Loan Amount (per academic year)||Year of Educations||Loan Amount (per academic year)|
|Freshman||$5,500 (maximum $3,500 subsidized)||Freshman||$9,500 (maximum $3,500 subsidized)|
|Sophmore||$6,500 (maximum $4,500 subsidized)||Sophmore||$10,500 (maximum $4,500 subsidized)|
|Junior/Senior||$7,500 (maximum $5,500 subsidized)||Junior/Senior||$12,500 (maximum $5,500 subsidized)|
|Lifetime Aggregate||$31,000 (maximum $23,000 subsidized)||Lifetime Aggregate||$57,500 (maximum $23,000 subsidized)|