Educational Loan Programs

Through the Federal Direct Loan Program, borrowers receive federal loan funds directly from the U.S. Department of Education. There are two types of Federal Direct Loans:

Subsidized: The federal government pays the interest on this loan while the student is enrolled at least half-time or during times of authorized deferment. Direct Subsidized Loans are awarded to undergraduate students based on financial need and grade level.

Unsubsidized: Students are responsible for paying the interest that accumulates after the loan has disbursed. The interest can be paid while in school or the accrued interest will be capitalized (added to the principal balance). Unsubsidized Stafford Loans are awarded based on grade level and financial need is not considered.

Important points to note:

• Repayment begins six months from the date of graduation, full withdrawal or enrollment less than half-time.
• A number of repayment plans are available.
• There is no prepayment penalty.
• Direct Loans are processed by the Office of Financial Aid for the maximum amount you are eligible to receive. If you wish to borrow less, you must indicate the reduced amount Office of Financial Aid.
• Funds are posted to the student’s account each semester following enrollment verification, which generally occurs after the second week of the semester.

New Direct Loan borrowers at Champlain College must complete a Master Promissory Note (MPN) and Entrance Counseling online at studentaid.gov.

Interest rates for all Federal Direct Loans

The Federal Direct Parent PLUS Loan program provides a borrowing option for parents of dependent undergraduate students to help finance their student’s education. The maximum amount a parent can borrow is the cost of attendance less other sources of financial aid.

Important points to note:

• A parent can apply for the Parent Plus Loan and complete the Parent Plus Master Promissory Note (MPN) at https://studentaid.gov/plus-app/.
• Repayment begins after the loan is fully disbursed; however, deferment options are available to delay repayment.
• This is a credit-based loan; parent must pass a credit check, which is valid for 180 days.
• Interest rate is fixed, and there is a fee deducted from every disbursement.
• Interest accrues from the first date of disbursement.
• There is no prepayment penalty.

Parents denied a Federal Direct Parent PLUS Loan will be offered the option to appeal or apply with a credit-approved endorser.

The Federal Direct Graduate PLUS Loan program provides a borrowing option for graduate students to help finance their education. The maximum amount a graduate student can borrow is the cost of attendance minus other sources of financial aid. The graduate student’s award letter will indicate the maximum amount eligible. This amount can be reduced or declined; no student is required to borrow a Federal Direct Graduate PLUS Loan.

Students intending to borrow a Graduate PLUS Loan will need to complete Graduate PLUS Application as well as the Graduate Plus Master Promissory Note (MPN)online at studentaid.gov. In subsequent years, only the Graduate PLUS Application will need to be completed. The MPN is valid for 10 years after a loan has been issued from it.

Important points to note:

• Repayment begins after the loan is fully disbursed; however, deferment options are available to delay repayment.
• This is a credit-based loan; students must pass a credit check, which is valid for 180 days.
• Interest rate is fixed, and there is a fee deducted from every disbursement.
• Interest accrues from the first date of disbursement.
• There is no prepayment penalty.

Students denied a Federal Direct Graduate PLUS Loan will be offered the option to appeal or apply with a credit-approved endorser.

Private loans are non-federal, credit-based education loans borrowed from a private lending institution that must be repaid. The loans are typically issued in the student’s name with a required cosigner. The maximum amount a student may borrow is the cost of attendance minus any other financial aid or the maximum limit established by the lender.

Given the interest rates and loan provisions, families are urged to fully explore federal loan options, (e.g. Direct Subsidized, Direct Unsubsidized and Direct Parent PLUS Loans), before securing a private loan. Funds are posted to the student’s account each semester following enrollment verification, which generally occurs after the second week of the semester.

Selecting a private education loan and lender is a personal decision. The Office of Financial Aid strongly recommends researching private education loans and lenders before completing a loan application online or signing any loan paperwork. Research should include: a comparison of interest rates, fees, repayment terms, and the level of customer service provided by the lender.

Private Loan Self-Certification Form