Student Loan Information
Federal Perkins Loans
EMU is the lender. The interest rate is 5%; repayment of principal and interest are deferred until nine months after graduation or enrollment status is less than half-time. There are numerous Federal Perkins Loan Teacher Cancellation provisions. These funds are awarded to students with exceptional financial need. No separate application is required. A student accepts the loan by signing a promissory note following enrollment.
Federal Direct Student Loans
A Federal Direct Student Loan is either subsidized or unsubsidized. Loan funds are disbursed from the federal government to the school. Interest rates are determined by the government and usually differ between the two types of loans. The annual rates are “fixed” and cannot exceed 8.25%. Loan fees are automatically deducted before disbursement of funds.
A subsidized loan is awarded based on financial need. The federal government pays the interest on behalf of the student until graduation or student drops below half time enrollment.
An unsubsidized loan is not based on financial need. The student is charged interest from the time the loan is disbursed until it is paid in full. If the student opts not to pay the interest during enrollment and allows the interest to accumulate, it will be capitalized, which means the interest will be added to the principal amount of the loan and will increase the amount the student will need to repay.
Students may borrow up to:
- $5,500/yr as a freshman, 0-23 credits, $3500 may be subsidized if eligible
- $6,500/yr as a sophomore, 24-55 credits, $4500 may be subsidized if eligible
- $7,500/yr as a junior/senior, 56 or more credits, $5500 may be subsidized if eligible
The total debt from all outstanding Stafford Loans (for undergraduate degrees) cannot exceed $31,000 of which no more than $23,000 can be subsidized.
Repayment on the full amount begins six months after a student ceases to be enrolled at least half-time. There are Federal Stafford Loan Cancellation provisions up to $5,000. See also the Federal Loan Information page.
Additional Unsubsidized Direct Loans
Additional unsubsidized Stafford Loan funds are available to independent students and to students whose parents are denied access to the Federal Direct Parent PLUS Loan. Annual loan limit is $4,000 for freshman and sophomore years, and $5,000 for remaining undergraduate years.
Federal Direct PLUS Loans
Federal PLUS Loans enable a parent with a good credit history to borrow to pay the educational expenses of a dependent undergraduate student who is enrolled at least half-time. The interest rate on a PLUS Loan is fixed at 7.9%. A processing fee of four percent is automatically deducted from each disbursement.
Repayment of the total amount borrowed (including fees) generally begins within 60 days after the second disbursement. However, a parent may request deferment of repayment.