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Financial Aid > Types of Aid > Loans
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Educational loans are available from a variety of sources, allowing students and/or parents to borrow funds that can pay some or all college costs. While the "best" loans are based on financial need and require the annual completion of the Free Application for Federal Student Aid ("FAFSA") there are programs for virtually every family, regardless of income. Many loans do not require repayment while the student is enrolled. Below you will find a brief description of the most common loan programs. If you intend to apply for a Federal PLUS Loan or an "alternative loan" be sure to review the page "How Much to Borrow?" You may need to complete our Loan Supplemental Statement. To learn more about these loans, visit our Ways to Pay page.
Federal Perkins Loan This low-interest loan is awarded to students who demonstrate significant financial need. The program is funded jointly by the federal government and the College, with the College serving as the lender. Most loans are in the range of $1000-$2500 and are offered to full-time students. The interest rate is fixed at 5%. No payment is required and no interest is charged until nine months after you are no longer enrolled at least half-time. Under some conditions, the Perkins Loan can be cancelled. Additional information and application forms are provided to borrowers prior to actually receiving the loan funds. Additional information is found here. If you are currently enrolled or have been offered admission, visit our Student Loan Process page to complete the steps required to obtain the loan.
Federal Stafford Loan There are two types of Stafford Loans: "subsidized" and "unsubsidized." Both loans are available to students enrolled at least half-time. The subsidized loan is awarded when you have financial need, while the unsubsidized is awarded if you do not have financial need, or if your need has already been met by other types of financial aid. For Lake Forest students, the Stafford Loan comes from a private lender. The nice thing is, you do not have to shop around for a good deal. We have already done the research for you, and will help you through the application process! New, May 2008: As an undergraduate you may borrow a combined total of $5500 (subsidized + unsubsidized) in your first year of study, $6500 in your second year, and $7500 in subsequent years. The total you may borrow for your undergraduate years is $31,000. Of the annual limits, at least $2000 must be from the unsubsidized Stafford Loan. Interest Rates. New, May 2008: Beginning with the 2008-2009 academic year, subsidized and unsubsidized loans will have different interest rates. For subsidized loans disbursed between 7/1/08 and 6/30/09, the interest rate is fixed at 6.0%. Unsubsidized loans will be fixed at 6.8%. Prior borrowers have a variable rate which changes each July 1, with a maximum of 8.25%.The bank will deduct a fee of up to 4% of the amount borrowed. As a result, the loan available to "pay your bill" will be less than the amount you request. Repayment of the entire approved amount, however - prior to the deduction of fees - is required. Additional information is found here. If you are currently enrolled or have been offered admission, visit our Student Loan Process page to complete the steps required to obtain the loan.
Federal PLUS (Parent Loan for Undergraduate Students) This is a loan specifically designed for parents of dependent students. The parent may borrow the difference between the "cost of attendance" and all financial aid the student has received. Please contact the Office of Financial Aid (847-735-5015 or -5010) to determine the maximum amount available, and/or the amount you will need. New, May 2008: Repayment can now be deferred while the student is enrolled, with the first payment due no more than six-months after the date the student ceases to be enrolled at least half-time. (Until now, payment was expected 60 days after the loan is disbursed.) Accrued interest can be paid monthly, quarterly, or capitalized quarterly. Once repayment begins, borrowers are given a period of up to 10 years to repay, depending on the amount borrowed. The interest rate for new borrowers is fixed at 8.5%. Prior borrowers have a variable rate which changes each July 1, with a maximum of 9%. If a parent's credit history prevents them from obtaining a loan -- the parent has been denied the PLUS -- the student can receive up to $6000 (freshmen and sophomores) or $7000 (juniors and seniors) from the Unsubsidized Federal Stafford Loan. Additional information and links to the application are found on our Ways to Pay page under Option #3. Parents will be advised of the application process (included recommended lenders) in early June.
Alternative Loans When a parent is unable to pay for college or borrow from the PLUS loan, students may be faced with the need to borrow money on their own. If all federal student loans have been exhausted, an "alternative loan" is the next option. There are literally dozens of private loan programs from which to choose. Students and parents will be advised of the application process (included recommended lenders) in early June. Interest rates vary from lender to lender, and are determined by the credit worthiness of the student and co-signor. In most cases, repayment begins after the student ceases to be enrolled at least half-time. Additional information and links to the application are found on our Ways to Pay page under Option #3. |
