2011-2012

There are several loan programs available to students and their parents to help pay for college. There are two basic categories of loans:

1. Need based
2. Non-need based

Need based loans include the Federal Perkins, Nursing, and Federal Direct Subsidized loans. Non-need based loans include the Federal Direct Unsubsidized, Direct Graduate PLUS and Direct PLUS loans, as well as private/alternative loans. When you apply for financial aid, you are automatically considered for Perkins, Nursing, and Direct loans - both subsidized and unsubsidized. The Direct Graduate PLUS, Direct PLUS loan and all private loans require separate applications.

The University of Virginia participates in the William D. Ford Federal Direct Student Loan Program. This program offers low-interest loans to dependent and independent, undergraduate and graduate students enrolled in school at least half-time (minimum of six credit hours per semester). Student Financial Services certifies private loans that come from a private lending institution such as a bank or credit union.

Entrance counseling is required for all first-time borrowers.

Loan Summary

General Information about Loans

Federal Perkins and Nursing Loan Program

Federal Direct Loan Program

Federal Direct Loan Maximums

Direct PLUS (Parent PLUS) Loan Program

Direct Graduate PLUS Loan Program

Private Loans

Loan Summary Sheet

Federal Perkins and Nursing Loans
The Federal Perkins and Nursing Loans are based on financial need. These loans must be repaid.

The Perkins Loan is awarded to students who demonstrate the greatest financial need. Preference is given to students who are eligible for the Federal Pell Grant. The University typically awards amounts ranging from $500 to $4,000 a year for undergraduates.

The Nursing Loan is awarded to students who demonstrate the greatest financial need and who are enrolled in the University's undergraduate Nursing Program. Annual award amounts range from $500 to $2,500 to first- and second-year students, and up to $4,000 to third- and fourth-year students.

Unlike other federal loan programs, origination fees are not deducted from Perkins and Nursing Loans. No interest is charged while students are enrolled in school (undergraduate or graduate) on at least a half-time basis.

Perkins Loan Promissory Notes: Students awarded a Perkins loan should go to pin.ed.gov to obtain a federal personal identification number (PIN) to use in signing their promissory note. This is the same PIN you would have used to electronically sign your FAFSA.   Once signed, this promissory note will serve for any future Perkins loans received at UVA. Students may complete the Master Promissory Note for their Perkins loan by going here.

Students who do not complete the Perkins Loan promissory note by October 1 will have their loan canceled for the academic year.

If you decline all or a portion of the Federal Perkins loan after your Official award is posted, you will not be eligible for a reinstatement of the loan except in the following circumstance.

• You were offered the maximum amount, but in the process of entering a lesser amount, you mistakenly entered an amount different from what you intended.
• You notify Student Financial Services within 2 business days of your error. Changes you make to your awards are time and date stamped by the SIS. Notification may be made by email, phone or in-person contact.
• You submit a “Financial Aid Change Form Increase” to request the reauthorization of the Federal Perkins loan.

Disbursement Procedures: One-half of the loan is applied directly to the student's account each semester, as long as the required Promissory Note is on file and entrance counseling has been completed.

Exit Interview: It is the Perkins and Nursing Loan student's responsibility to have an exit interview before leaving the University or in the event they register less than half-time (fewer than six credit hours). Exit Counseling information online


Repayment: Repayment begins nine months after the student leaves school or drops below half-time (six credit hours). At that time, interest will begin to accrue at a rate of 5% each year with a minimum yearly payment of $480 or minimum monthly payment of $40. The actually monthly repayment will depend on the amount of the student's debt. Repayment may be spread over a ten-year period from the date of the first payment, and loans can be consolidated for repayment.

Direct Loan Program
Direct Subsidized Loan
Students who demonstrate financial need are eligible for the Direct Subsidized Loan. The federal government will pay the interest while the student is enrolled at least half-time (minimum of six credit hours). Repayment of the loan principal begins six months after the student leaves school or is enrolled less than half-time (fewer than six credit hours). At that time, interest will begin to accrue at a fixed rate with a minimum monthly payment of $50.  Loans for undergraduate students for 2011-2012 will have a fixed rate of 3.40%, while loans for graduate/professional students will have a 6.80% fixed rate.

Direct Unsubsidized Loan
Students who do not demonstrate financial need, in whole or in part, are eligible for the Direct Unsubsidized Loan. Under this program, students may still borrow, but will be required to pay all the interest on the loan. Repayment of the interest on the unsubsidized loan begins within 60 days after disbursement unless interest capitalization is requested. Interest on an unsubsidized loan is fixed at 6.80% for 2011-2012. Students whose parents are unwilling to provide information to complete the FAFSA can apply for unsubsidized loans with the proper supporting documentation.

Additional Direct Unsubsidized Loans
Through the Direct Loan Program, independent undergraduate students and students whose parents were denied the PLUS loan may borrow up to the following additional amounts:

First and Second Year Students--$4,000
Third and Fourth Year Students--$5,000
Preparatory Coursework--$7,000

Master Promissory Note: All borrowers are required to complete a Master Promissory Note (MPN) the first time they borrow as a University of Virginia student. The MPN does not show loan amounts because it can serve as the student's promissory note for future years. The amount of the subsidized and unsubsidized loans will be included in the student's financial aid award notification. To sign the MPN, click here.

Students will receive their Loan Disclosure Statement for each new loan borrowed. The disclosure statements provide information about the types and amounts of loans borrowed, the loan period, and the anticipated disbursement dates. Students should maintain the statements for their records.

Students initially accept, decline, or reduce loan amounts in the Student Information System (SIS). After a loan is accepted in SIS, any other changes require completion of a Financial Aid Change Form Increase or a Financial Aid Change Form Decrease. Note that increases are subject to annual maximums. If you have borrowed more than you need, excess funds must be returned to U.Va. within 120 days of disbursement. The loan fee will be reduced or eliminated in proportion to the amount of the disbursement returned.

Disbursement Procedure: The financial aid award indicates the total loan amount of the Direct Loan the student is awarded. The net amount disbursed will be the gross amount of the loan less fees.

The Direct Student Loan is normally payable in two disbursements, one-half of the total in each semester. Loan funds cannot be credited to the student's account until approved by the Lender and the student has enrolled in sufficient credit hours.

Students will receive an email once their loan has been disbursed to their University Student Account (billing account statement). The disbursement will first pay outstanding tuition, fees, and room and board due to the University of Virginia for the current semester, and the remaining funds will be sent to the student by check to their local address or direct deposit to their own personal bank account.

In the case of an over-award, one or both of the loan disbursements may be reduced or canceled. Similarly, if tuition charges are reduced because of a change in enrollment or additional departmental or non-university awards, one or both of the loan disbursements may need to be adjusted or canceled.

If a student fails to enroll in sufficient credit hours, their loan will be canceled, typically within 30 days of the start of classes.

Entrance Counseling: All first-time borrowers of federal loans must be informed of their borrower obligations before their first loan disbursement can be credited to their University account. Loan entrance counseling information online.

Exit Counseling: It is the student's responsibility to undergo exit counseling before leaving the University or in the event he or she registers for less than half-time basis (minimum six credit hours). Student loan history can be found at www.nslds.ed.gov; use your Federal PIN (available at pin.ed.gov) to access the data. It is the student's responsibility to contact Student Financial Services in the event they withdraw from the University or enroll less than half-time (minimum six credit hours) to obtain exit counseling information. Exit counseling information online.

Exit  Counseling session covers the following federal student loan types:

William D. Ford Direct Loan (Direct Loan) Program loans

• Direct Subsidized Loans
• Direct Unsubsidized Loans
• Direct PLUS Loans (for graduate/professional students)

Federal Family Education Loan (FFEL) Program loans

• Subsidized Federal Stafford Loans
• Unsubsidized Federal Stafford Loans
• Federal PLUS Loans (for graduate/professional students)

Direct Loan Maximums

*Additional Direct loans are available only for Independent students and Dependent students whose parents have been denied a Direct PLUS (Parent PLUS) loan.

Direct PLUS (Parent PLUS) Loan
The Direct PLUS (Parent PLUS) Loan is made to parents of dependent undergraduate students enrolled in school at least half-time (minimum six credit hours per semester). Parents must be U.S. citizens or registered permanent residents to apply for the PLUS. Eligibility for the PLUS is not based on demonstrated financial need. Parents with adverse credit history or who have filed bankruptcy in the past may be denied the PLUS.  Students whose parents have been denied the PLUS loan may receive an additional unsubsidized Direct loan (see chart above for eligible amount).

Eligible parents may borrow up to the cost of attendance less any financial assistance. The interest rate is fixed at 7.90% with a 2.50% net origination fee.  Repayment begins within 60 days after the full disbursement of the loan, but parents may request a deferment while the student is in school.

Please note that PLUS proceeds are applied to tuition charges before any other financial assistance. Unless parents request otherwise, credit balances are refunded to them rather than to the student. Also, it is important to note that we cannot award the PLUS loan until the student has either accepted or declined any other loans that are part of the financial aid award.

PLUS Application and Promissory Note: First, a FAFSA must be completed for each student for whom a parent intends to take out a PLUS loan. We recommend that partents not apply for this loan until the Official Financial Aid Award has been created for the student. Parent credit checks are only good for 120 days, and applying too early could result in the requirement of a second credit check.

All parent borrowers will also be required to complete the Direct PLUS Loan Application and first-time borrowers will have to sign a Master Promissory Note (MPN) at studentloans.gov. Current regulations allow a parent to sign one promissory note (Master Promissory Note) that will be used for future PLUS loans borrowed. The PLUS MPN does not show loan amounts because it can serve as a parent's promissory note for future years. The amount of the PLUS loan eligibility will be included in the most recent financial aid award notification. Please note that every application for the PLUS loan will result in a credit history inquiry. A FAFSA must be on file for the student whose parent(s) are taking out the PLUS loan.

Parent borrowers will receive their PLUS Disclosure Statement for each new loan borrowed. The disclosure statements provide information about the amount of money borrowed, the loan period, and the anticipated disbursement dates. Parents should maintain the statements for their records.

Parents may decline or reduce the amount of their loan(s) by completing a Financial Aid Change Form Decrease and submitting it to Student Financial Services. If you have borrowed more than you need, excess funds must be returned to U.Va. within 120 days of disbursement. The loan fee will be reduced or eliminated in proportion to the amount of the disbursement returned. The loan fee will be reduced or eliminated in proportion to the amount of the disbursement returned.

Please note that parents who do not submit a signed promissory note by October 1 will have their loan canceled for the academic year. If your PLUS loan application is denied, you will receive information about the Endorser Plan from the federal government.

Disbursement Procedure: The PLUS is normally payable in two disbursements, one-half of the total in each semester. Loan funds cannot be credited to the student's account until approved by the lender and the student has enrolled in sufficient credit hours. All undergraduates at the University must be enrolled full-time (at least 12 credit hours).

The total loan amount of the PLUS awarded can be found in the Finances section of the Student Center in the SIS. The actual amount disbursed will be less due to origination fees.

In the case of an over-award, one or both of the loan disbursements may be reduced or canceled.  Similarly, if tuition charges are reduced because of a change in enrollment, one or both of the disbursements may need to be adjusted.

Repayment: Under the PLUS program, repayment must begin within 60 days after full disbursement of the loan. There is no grace period for the PLUS loan. Parents must repay both principal and interest on the loan even while the student is enrolled in school, or parents may request a deferment of principal as long as the student remains enrolled as a full-time student. Parents can choose the Standard, Extended, or Graduated Repayment Plan. The Income Contingent repayment plan is not an option for the PLUS.

Direct Graduate PLUS Loan

The Federal Graduate PLUS Program is a low-interest loan made to graduate students enrolled in school at least half-time (minimum of six credit hours per semester).  Graduate students must be U.S. citizens or registered permanent residents to apply for the PLUS loan. Eligibility for the PLUS is not based on demonstrated financial need. Graduate students with adverse credit history or who have filed bankruptcy in the past may be denied the PLUS.

Eligible graduate students may borrow up to the cost of attendance less any financial assistance. The interest rate is a fixed 7.90% with a net origination fee of 2.50%.  Repayment begins within 60 days of the full disbursement of the loan, but students may request deferment of payments while enrolled in school at least half-time.

Graduate students must complete the Free Application for Federal Student Aid (FAFSA), www.fafsa.ed.gov, the University Financial Aid Application, and have exhausted their Direct loan annual eligibility in order to qualify for the Graduate PLUS loan.  Graduate students must also complete the UVA Graduate PLUS Loan application.

PLUS Promissory Note: All Graduate student borrowers will be required to complete the UVA Graduate PLUS Loan Application and sign a Master Promissory Note (MPN) here. Current regulations allow a graduate student to complete one promissory note (Master Promissory Note) that will be used for future PLUS loans borrowed. The PLUS MPN does not show loan amounts because it can serve as a graduate student's promissory note for future years. The amount of the Graduate PLUS loan eligibility will be included in the most recent financial aid award notification. Please note that every application for the PLUS loan will result in a credit history inquiry.

Graduate borrowers will receive their PLUS Disclosure Statement for each new loan borrowed. The disclosure statements provide information about the amount of money borrowed, the loan period, and the anticipated disbursement dates. Graduate students should maintain the statements for their records.

Graduate students may decline or reduce the amount of their loan(s) by completing a Financial Aid Change Form Decrease and submitting it to Student Financial Services. To avoid incurring interest charges and loan fees, funds must be returned within 120 days of disbursement. The loan fee will be reduced or eliminated in proportion to the amount of the disbursement returned.

Please note that graduate students who do not have a signed promissory note on file by October 1 will have their loan canceled for the academic year.

Disbursement Procedure: The Graduate PLUS is normally payable in two disbursements, one-half of the total in each semester. Loan funds cannot be credited to the student's account until approved by the lender, and the student has enrolled in sufficient credit hours. All graduates at the University must be enrolled at least half time (6 hours) in a degree or certificate program.

The financial aid award indicates the total loan amount of the Graduate PLUS awarded. The actual amount disbursed will be less due to origination fees.

In the case of an over-award, one or both of the loan disbursements may be reduced or canceled.  Similarly, if tuition charges are reduced because of a change in enrollment, departmental or non-university awards, one or both of the disbursements may need to be adjusted or canceled.

Repayment: Under the Graduate PLUS program, repayment must begin within 60 days after full disbursement of the loan. There is no grace period for the Graduate PLUS loan.  Deferments may be available.

Private Loan Programs

Many private lending institutions offer credit-based loan programs to students.  Students should carefully consider the interest rates, loan fees, and terms of the program before making a selection.  Most institutions have an on-line application followed by a credit check.  Once the school is notified, the school will certify the loan amount.  The student most likely will then be required to complete either an on-line or paper promissory note.  Most lenders will require a credit-worthy co-signer who is a United States citizen. Below is some information to consider before selecting a private loan. It is important to note that we cannot award a privtate loan until the student has either accepted or declined any other loans that are part of the financial aid award.

Know Your Score—Most private loans are based on the creditworthiness of the borrower and/or co-signer.  Students need to know their credit score.  The higher the credit score, the better the interest rate.  Students can get their credit score at http://www.annualcreditreport.com/.  This site has been created by the three crediting bureaus and allows students to get a copy of their free credit report and to buy a copy of their credit score.

LIBOR—London Interbank Offered Rate.  The interest rate on some private loans is based on the LIBOR 3 month rate or the LIBOR 1 month rate.  The interest rate for the loan is probably variable and will change based on the rate.

Prepayment Fee—Make sure the private loan does not have a prepayment fee for early repayment.

Deferment—Most private loans offer a deferred payment option.  If loan payments are deferred, interest will accrue.  Our recommendation is to pay the interest if at all possible so that your principal will not increase.  Some interest rates for deferment may be different than the repayment interest rate.

Repayment Fee—A few lenders actually charge a fee for going into repayment.  Shop around to avoid this fee.

Late Payment—Find out from the lender at what point a payment will be considered late.

Credit Worthy Borrower—A borrower or co-signer who has sufficient credit to borrow or co-sign for a loan and who is a United States citizen.

Credit Ready Borrower—A borrower who does not have any credit history but is ready to establish credit.

Repayment—Read the terms and conditions of your loan as some plans require immediate repayment while other provide terms for deferment.