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Loans
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Student loans have long been a part of the array of federal financial aid programs and continue today as one important component of financing a higher education. There are several federally-funded programs, as well as privately funded programs, available to families. Loans represent financial aid that must be repaid over time and interest rates vary from program to program. Eligibility for borrowing through most of these programs is determined by filing the FAFSA on an annual basis and require at least half-time enrollment for all students. See the charts below that describe annual and aggregate borrowing limits and interest rates. Students should only borrow what they absolutely need to cover mandatory expenses.
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Types of Loans Available to Students

  • *Please note under HEOA Sec. 489, amended HEA Sec. 485B (d) (4) (20 U.S.C. 1092b), all potential students or parents of a student borrowing a Federal Student Loan will have their information submitted to the National Student Loan Data System (NSLDS), and that information will be accessible by guaranty agencies, lenders, and institutions determined to be authorized users of the data.*

    Direct Loans are in the student's name. Completion of the FAFSA is required. There are two types of Federal Direct Loans; subsidized and unsubsidized. Subsidized means the federal government pays the interest on the loan for the student as long as the student is enrolled at least half-time. Unsubsidized means the student must pay the interest that accrues during their college career or defer the interest payments until they graduate.

    More information on subsidized and unsubsidized loans

    First time Direct Loan borrowers are required to complete Entrance Counseling and a Master Promissory Note (MPN). A MPN is a contract under which a borrower receives federally funded loans. These items can be completed electronically at studentaid.gov.

    Direct Loan Interest Rates and Aggregate Borrowing Limits

    Year Dependent Students Independent Students**
    First-Year Undergraduate (0-29 credits) $5,500—No more than $3,500 of this amount may be in subsidized* loans. $9,500—No more than $3,500 of this amount may be in subsidized* loans.
    Second-Year Undergraduate (30-59 credits) $6,500—No more than $4,500 of this amount may be in subsidized* loans. $10,500—No more than $4,500 of this amount may be in subsidized* loans.
    Third-Year and Beyond Undergraduate (60 or more credits) $7,500 per year—No more than $5,500 of this amount may be in subsidized* loans. $12,500 per year—No more than $5,500 of this amount may be in subsidized* loans.
    Graduate or Professional Degree Students Not Applicable $20,500 – all unsubsidized*
    Maximum Total Debt from Direct Loans $31,000—No more than $23,000 of this amount may be in subsidized* loans. $57,500 for undergraduates—No more than $23,000 of this amount may be in subsidized* loans.

    $138,500 for graduate or professional students—No more than $65,500 of this amount may be in subsidized* loans. The graduate debt limit includes all federal loans received for undergraduate study.

    *Interest rates are set every July 1st by Congress; More information on current interest rates and origination fees

    **Includes dependent students whose parents are unable to qualify for a PLUS Loan

  • PLUS Loan is a federal loan designed for graduate students or parents of undergraduate students to help finance their or their child’s college education. Completion of the FAFSA by the student is required. Payments of principal and interest typically begin after the loan has fully paid to the bill for the academic year. These payments may be deferred until the student graduates or is enrolled less than half-time. In some cases, an undergraduate student may borrow additional “unsubsidized” Direct Loans if a parent doesn't qualify for the PLUS.

    Additional information about PLUS

    Families should consider their eligibility for Federal Direct Loans before considering borrowing a PLUS.

  • Direct Consolidation Loan provides the opportunity for students who have separated from school and have from multiple federal programs to combine these loans into one loan with a single interest rate, payment plan and loan servicer. This option may not be in the best interest of everyone. Check with your loan provider for details.

  • Alternative (Private) Loans are privately-funded loans in the student name with varying repayment options, interest rates, etc. We strongly encourage students to compare loans before making a selection. One place to start your search is with ELM Select.

    In all cases, students and parents should consider their eligibility for Federal Direct Loans before borrowing a private loan.

  • Federal Undergraduate Loan Exit Counseling Requirement

    IMPORTANT: All students who have received Federal Direct Loans (both Subsidized and Unsubsidized) and/or Perkins Loans while attending Eastern Connecticut State University MUST fulfill the federal requirement of completing Exit Loan Counseling before leaving our institution. Therefore, if you have had federal loans and are graduating, you will need to electronically complete your counseling at the following sites:
    • Federal Direct Student Loan borrowers can complete their exit counseling session at www.studentaid.gov/exit-counseling/.
    • Federal Perkins Loan borrowers will need to complete exit counseling, and will be notified through a separate process when you can complete this requirement at www.myloancounseling.com/.
    Note: students will not be able to obtain an official academic transcript until they complete Exit
    Counseling. Even students going directly into a graduate program must complete exit loan counseling.

     

    Federal Direct Unsubsidized Loans

    These loans are not need-based. They are:
    • Available to all eligible students regardless of how much financial information is reported on the FAFSA. Students are responsible for the interest on a Federal Direct Unsubsidized Loan. Students can choose to pay the interest while they are still in school or defer interest payments until they drop below half-time status.
    • If a student chooses the second option, the interest that accrues while they are in school will capitalize (e.g. added to the principle balance) upon entering repayment.
    • Federal loans taken as an undergraduate should be automatically deferred once you are enrolled at least part-time in a Graduate Level program.
    • Graduate students may be offered up to $20,500 annually in a Federal Direct Unsubsidized loan.

    Federal Direct (Graduate) PLUS Loans

    Unlike most other federal programs, Federal Direct (Graduate) PLUS Loans are not awarded when a student applies for aid by completing the Free Application for Federal Student Aid (FAFSA). Interested students may apply separately for the loan at www.studentaid.gov.

    Students have the option of beginning repayment on a Federal Direct (Graduate) PLUS Loan at any time after disbursement. Students may postpone interest and principal payments until six (6) months after they cease to be enrolled at least half-time. In most cases, Graduate PLUS Loans will be automatically deferred while students are in school.

    A credit check will be performed during the application process. If you have an adverse credit history, you may still receive a grad PLUS loan through one of these two options:
    1. Obtaining an endorser who does not have an adverse credit history. An endorser is someone who agrees to repay the grad PLUS loan if you do not repay it.
    2. Documenting to the satisfaction of the U.S. Department of Education that there are extenuating
    circumstances relating to your adverse credit history.
    With either option 1 or option 2, you also must complete credit counseling for PLUS loan borrowers.

     

    Click here for a PDF flyer with information on Graduate Student Loan options.

Helpful Federal Loan Information

  • All students must complete Entrance Counseling and sign a Master Promissory Note (MPN) for a Federal Direct Student Loan or PLUS Loan. The material in the counseling sessions will be tailored to the borrower type – undergraduate or graduate – and only one counseling session is required for each student borrower. Parents are not required to complete Entrance Counseling.

    Step-by-step instructions on how to complete your MPN & Entrance Counseling

  • Exit Counseling is mandatory for all Federal Direct Loans, and provides important information you need to prepare to repay your federal student loans. Topics include understanding your loans, plans for repayment, avoiding default, and making finances a priority.

    Subsidized, Unsubsidized & PLUS Loans

    Upon ceasing enrollment and prior to beginning loan repayment, Federal Direct Subsidized, Unsubsidized and PLUS Loan borrowers are required to complete an online exit counseling session. The session provides information about borrower rights and responsibilities regarding loan repayment. This exit counseling session meets the exit requirement for both prior FFELP and current Direct Loan borrowers.

    Complete Exit Counseling

  • On October 28, 2009, the U.S. Department of Education published in the Federal Register the regulations enacted by the Higher Education Opportunity Act of 2009 that will govern the calculation of cohort default rates. Under the new provisions, an institution's cohort default rate is calculated as the percentage of borrowers in the cohort who default before the end of the second fiscal year following the fiscal year in which the borrowers entered repayment. This extends the length of time in which a student can default from two to three years.
    A 3-year cohort default rate is the percentage of a school's borrowers who enter repayment on certain Federal Family Education Loan (FFEL) Program or William D. Ford Federal Direct Loan (Direct Loan) Program loans during a particular federal fiscal year (FY), October 1 to September 30, and default or meet other specified conditions prior to the end of the second following fiscal year.


    The U.S Department of Education releases official cohort default rates once per year. The FY 2021 official 3-year cohort default rates were delivered to schools in September (2024). For more information, visit: https://fsapartners.ed.gov/knowledge-center/topics/default-management/official-cohort-default-rates-schools

    Eastern
    3-Year Cohort Default Rate*    		 State of Connecticut
    3-Year Cohort Default Rate*    		 National
    3-Year Cohort Default Rate*
    FY 2021 FY 2021 FY 2021
    0.00% 0.00% 0.00%

    *These rates are due to the pandemic pause on student loan payments.

     For Eastern undergraduate students enrolled in FY 2021, the average amount of student debt among those who took out loan was $28,741(including Federal, PLUS and private loans).