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Loans and Lenders

Items to Consider Before Applying for a Loan

Loans are an integral part of financing a college education. Students and parents should borrow wisely, which means making sure you research and understand all of your possible options.

  • If you are not sure of your possible eligibility for need-based financial aid and college-funded student employment from Vassar College, follow the instructions found at Apply for Aid to apply for financial aid.
  • Eligibility for federal grants and other federal programs is determined by completing the Free Application for Federal Student Aid (FAFSA).
  • Applying for private scholarships and grants is a bit like playing your state lottery, but it may be worth the effort. Be sure to stay away from any scholarship/grant searches that require a fee. Look for free searches like fastweb.
  • Visit your state’s education department website to find out what grant or state-backed loans might be available to you. The latter is very important because some states do offer education loans for their residents that are less costly than alternative education loans from private lenders.
  • Federal student and parent loans are less costly than alternative private education loans, and most of these loans require a co-signer if you want to reduce the cost of the loan. The Federal Parent Loan (PLUS) has a provision for loan forgiveness in the event that either the parent or student dies or suffers 100% disability. This is not offered by private student loans where a co-signer is required for the student.

Types of Loans

Federal Loans for Students

Federal Direct Loans are available to eligible students who complete the Free Application for Federal Student Aid (FAFSA). There are two types. The subsidized loan does not accrue interest while the student is enrolled in school. The unsubsidized loan does accrue interest, beginning from the time the loan is disbursed. Eligibility is determined by the student's class year, level of financial need, and amount of other aid received.

  • Interest rate: 5.05% (fixed) for 2018-2019
  • Origination fee: 1.066%
  • Maximum annual limit: 1st year: $5,500, up to $3,500 can be subsidized; 2nd year: $6,500, up to $4,500 can be subsidized; 3rd/4th year: $7,500, up to $5,500 can be subsidized
  • Repayment begins: 6 months after graduating, leaving school, or dropping below half-time enrollment
  • Repayment period: varies depending on payment plan selected

Federal Loans for Parents

Direct Parent PLUS Loans are government loans made available to parents of dependent undergraduate students. To qualify, the parent must be a U.S. citizen or eligible non-citizen, and must not have an adverse credit history. A credit check is required as part of the application. If the credit is denied, the parent can reapply with an endorser, or the student may borrow an additional unsubsidized loan for $4,000-$5,000, depending on class year.

  • Interest rate: 7.6% (fixed) for 2018-2019
  • Origination fee:  4.264%
  • Maximum annual limit: total cost of attendance (budget) less any financial aid the student receives
  • Repayment begins: once loan is fully disbursed, option to request a deferment
  • Repayment period: varies depending on plan selected

Alternative/Private Loans

Private student loans are non-government loans from lenders such as banks, credit unions, and state agencies. Either the parent or the student can be the primary borrower, though with the latter, a co-signer is usually required. Before taking an alternative loan, we encourage families to exhaust all federal student loan options first. You may find this summary of the differences between federal and private student loans helpful.

Vassar College does not endorse or recommend any private lender in particular. Ultimately it is the family’s responsibility to research all options and select the one that best meets their needs. For a sampling of lenders used by Vassar students in recent years, visit ELM Select.

  • Interest rate: varies. A comparison of interest rates (prime rate versus 3 month Libor) can be found at Financial Forecast Center
  • Origination fee:  varies
  • Maximum annual limit: total cost of attendance (budget) less any financial aid the student receives
  • Repayment begins: varies
  • Repayment period: varies 

If you have any questions or concerns about the loan portion of your financial aid package, please call the Office of Financial aid at (845) 437-5320 or email finaid@vassar.edu.