There are many loans available to students. The federal government provides federal student loans (i.e. direct loans) in the form of a subsidized loan or unsubsidized loan.
There are also PLUS loans (i.e. Graduate/Professional PLUS loan or Parent PLUS loan) to which the borrower would need to apply for the loan via Studentaid.gov, and must be creditworthy to receive it (per the federal government's credit check standard). Private loans are provided through a private bank or lender, and are not federal-based loans.
Qualifying for Federal Loans
As a parent or student borrower, your federal loan(s) will be submitted to the National Student Loan Data System (NSLDS), and will be accessible by guaranty agencies, lenders, and schools determined to be authorized users of the data system (HEOA 489 amended HEA Sec. 485B).
The Department of Education has developed a process called the Annual Student Loan Acknowledgement (formerly known as Informed Borrowing Confirmation) that can be completed during the Master Promissory Note confirmation process. The purpose of the acknowledgment is for federal loan borrowers to review and understand a summary of federal loan and grant information, cumulative outstanding loan balances, and general information about student loan borrowing. This process should be completed in addition to the completion of Entrance Counseling, PLUS Counseling, and/or the Master Promissory Note. The Annual Student Loan Acknowledgement may be completed online at studentaid.gov each year by student and parent federal loan borrowers.
To qualify for federal student loans, you must:
- Complete the FAFSA.
- Be a U.S. citizen or an eligible noncitizen.
- Have a valid Social Security number.
- Be registered with Selective Service, if you’re a male.
- Be enrolled or accepted for enrollment at least half-time in an eligible degree or certificate program.
- Maintain satisfactory academic progress in your degree program.
- Not be in default on a federal student loan.
- Not owe money on a federal student grant.
- Use federal student aid only for educational purposes.
- Have a high school diploma or recognized equivalent.
Federal Direct LoansMore
Your New York Institute of Technology (New York Tech) Financial Assistance Plan may include a combination of one or more of the following federal student loans, based on your eligibility as determined by your FAFSA. All are directly funded by and repayable to the U.S. Department of Education. Direct loan amounts are determined by your enrollment level and fall within corresponding maximum loan limits set by the federal government.
- Subsidized Direct Stafford Loan – Low-interest, fixed-rate loan available to undergraduate students with financial need as determined by the FAFSA. Interest that accrues on subsidized loans is paid by the government as long as you are registered for at least six credits in an academic program that leads to a degree. Repayment is deferred until six months after graduation. There is a limit on the maximum period of time (measured in academic years) that you can receive Direct Subsidized Loans. In general, you may not receive Direct Subsidized Loans for more than 150% of the published length of your program. This is called your "maximum eligibility period." Repayment is deferred until six months after graduation, if you drop below half-time status, or take classes as a non-matriculated student.
- Unsubsidized Direct Stafford Loan – Non-need-based, low-interest, fixed-rate loan available to undergraduate, graduate, or professional degree candidates registered for at least six credits in an academic program that leads to a degree. Repayment is deferred until six months after graduation, if you drop below half-time status, or take classes as a non-matriculated student. You may receive both subsidized and unsubsidized loans for the same enrollment period, but the total amount of these loans may not exceed the annual loan limit.
Although repayment of the principal is deferred while you are in school, you will be responsible for paying the interest that accrues on the loan from the time it is disbursed into your New York Tech account until it’s paid in full. You can pay the interest while you’re in school or during a period of deferment or forbearance. Or, you can allow the interest to accrue and have the interest added to the principal amount of your loan.
- Federal Parent PLUS Loan – This is a fixed-rate loan offered to parents of enrolled dependent students. Unlike Stafford loans, the Parent PLUS Loan requires annual credit approval and for the parent to complete a Parent PLUS application, accessible on studentaid.gov. A PLUS Loan applicant who has an adverse credit history may still be able to receive a loan by documenting existing extenuating circumstances or by obtaining an endorser who does not have an adverse credit history. An endorser is someone who agrees to repay the loan if the borrower fails to do so. Also, if a Parent PLUS applicant is denied the Parent PLUS loan, s/he must complete Credit Counseling on studentaid.gov. While the interest rates are slightly higher than those for Stafford loans, they are usually lower than those of private lenders. Other advantages include wider deferment privileges, more lenient credit approval, and federal insurance against death or disability. The maximum Parent PLUS loan amount is the difference between New York Tech's cost of attendance and all of the other aid the student has been awarded.
- Federal Graduate and Professional Student PLUS Loan – With terms nearly identical to the Parent PLUS loan, the “Grad PLUS” is also a credit-based, federally guaranteed loan awarded to students themselves who are registered for at least six credits in graduate or professional degree programs. Similar to the Parent PLUS loan, a Graduate/Professional student must complete Graduate PLUS application, accessible on studentaid.gov. A PLUS Loan applicant who has an adverse credit history may still be able to receive a loan by documenting existing extenuating circumstances or by obtaining an endorser who does not have an adverse credit history. An endorser is someone who agrees to repay the loan if the borrower fails to do so. Also, if a Graduate Student/Professional PLUS applicant is denied the PLUS loan, s/he must complete Credit Counseling on studentaid.gov. It will not reduce your eligibility for the Stafford Loan, but the amount of any Stafford loans you will affect the amount of your PLUS loan. The PLUS loan is limited to the cost of attendance minus other aid received, as certified by New York Tech.
Federal Perkins LoanMore
Per Dear Colleague Letter GEN-17-10, the Carl D. Perkins Federal Loan is currently not being offered to any students (e.g. undergraduate, graduate, and professional students). When this program was in existence, the fund was offered to students who demonstrated the greatest economic need. Unlike Direct Loans, which are borrowed from the U.S. Department of Education, Perkins loans were awarded, partially funded, and administered by New York Tech. The interest rate is fixed at 5%, and the grace period before repayment begins is nine months. The Perkins Loan annual limit is currently $5,500 for undergraduate and $8,000 for graduate students, but individual awards depend on availability of funds. Perkins loans are repaid to New York Tech. New government provisions have a limit to new loans to undergraduates who have remaining need after accounting for all Direct Loan eligibility (both Subsidized and Unsubsidized). No Perkins Loan disbursements are permitted after June 30, 2018, under any circumstances. The progress of these federal provisions will be monitored. Contact the Office of Financial Aid for further information.
Mandatory Master Promissory NoteMore
First-time Direct Loan Borrowers must complete a Direct Subsidized/Unsubsidized Stafford Loan Master Promissory Note (MPN) and/or PLUS Loan Master Promissory Note (MPN). The Master Promissory Note (MPN) is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the U.S. Department of Education. It also explains the terms and conditions of your loan(s); for instance, it will include information on how interest is calculated and what deferment and cancellation provisions are available to you. Federal regulations regarding completion of Perkins Loan MPNs are being monitored and any changes will be updated.
Mandatory Loan CounselingMore
Entrance Loan Counseling
All first-time Federal Direct Student Loan and Federal Perkins Loan borrowers at New York Tech must participate in loan entrance counseling, even if you have borrowed at a previous institution. Entrance counseling for Federal Direct Student loans may be completed online at studentaid.gov. Federal regulations regarding completion of Perkins Loan MPNs are being monitored and any changes will be updated. Entrance counseling is not required for alternative loan borrowers. No loan funds will be credited to your account until you complete an entrance loan counseling session.
Your entrance loan counseling session will cover topics including the federal loan process, managing your education expenses, alternative financial resources, and your rights and responsibilities as a borrower.
Exit Loan Counseling
Exit Counseling is required when you graduate, leave school, or drop below half-time enrollment. All borrowers of Federal Direct Student Loan and Perkins Loan funds are required to complete Exit Counseling. The Office of Financial Aid typically schedules group sessions for graduating students. The Office of Financial Aid also sends an Exit Counseling folder to students with directions on where to complete Exit Counseling.
You should always exhaust all federal loan borrowing before borrowing private student loans. Federal student loans typically offer a fixed interest rate, more flexible repayment terms, and other options. If you still need funds to cover the cost of attendance, you may want to consider applying for a private education loan, also called alternative loans. These are credit-based loans issued in the student's name by banks, credit unions, and other non-federal lenders. Most require a cosigner. Because these loans generally charge higher interest and fees (often non-tax deductible), and offer fewer benefits than federal loans, it is wise to carefully research your options to find the loan and lender that best serves your needs.
Before borrowing private loans, read the Truth in Lending Act Disclosure.
If you are taking six or more credits during the summer session at New York Tech, you may be eligible for federal and/or private loans to cover that typically “off season” of enrollment. The Office of Financial Aid packages these seasonal loans along with your aid for either the fall or spring semester. Any federal loans you receive for summer sessions still count toward your total aggregate loan limits, which may result in you using most of your eligibility more quickly than a student would in a traditional two semester year. Be sure to complete the correct FAFSA year because it is possible that you may need two different FAFSA years on file.
To apply, complete and submit a Seasonal Loan Request Form to the Office of Financial Aid.
Upon initiating any Federal Direct Loans or Perkins loans, you will be contacted by the loan servicer assigned to your account—the company that will handle your loan billing and work with you when and if you need to ask questions, resolve problems, or make changes to your repayment plan.
All Federal Loans
As you enter repayment, you should check your records on the National Student Loan Data System (NSLDS) to make sure you have an accurate record of all of the federal student loans you have received and to find contact information for the loan servicer or lender for your loans. To find the best repayment plan for you, please view the federal student loan repayment option diagram. For alternative loans, please contact your lender to ensure accurate records and to both discuss and review repayment options.
Federal Direct Loans
There are many payment plans available for Direct Loans, offering different benefits to accommodate different needs. You may choose any of the plans for which you qualify at any time, by contacting your loan servicer.
Federal Perkins Loan
Your lender for your Perkins Loan is New York Tech. The Office of Financial Aid will contact you about making Perkins Loan payments.
Private or Alternative Loans
Repayment terms will vary and be determined by each lender. Contact your lender or the lender’s loan servicer directly for information.
There is a limit on the maximum period of time (measured in academic years) that you can receive Direct Subsidized Loans. In general, you may not receive Direct Subsidized Loans for more than 150% of the published length of your program. This is called your "maximum eligibility period." For example, for a four-year full-time bachelor’s degree program, the maximum period you can receive subsidized loans is six years (150% of four years = six years); the period used will be reduced for less than full-time study.
If you continue to be enrolled in an undergraduate program after your maximum eligibility period, you will have to pay (with certain exceptions) the interest that accrues on your Direct Subsidized Loans during all periods. This is called losing interest subsidy.