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Loans

Students may apply for federal and / or private education loans and must meet all eligibility requirements. International students may borrow private (non-federal) loans and must have a  credit-worthy cosigner, who is a US Citizen or permanent resident of the US. Total education loans must not exceed the cost of attendance less financial aid from all sources.

Federal Perkins Loans

The Perkins Loan program is a federal loan program that provides low interest (5%) loans to eligible students who demonstrate exceptional financial need. No interest accrues on the loan while the student is enrolled on at least a half time basis, during the nine-month grace period, and during periods of deferment. Repayment begins nine months after the student graduates or is no longer enrolled on at least a half time basis. Perkins loans are administered through the Tepper School of Business and funds are limited. The maximum annual award amount is $8,000. There are no loan origination fees for Perkins Loans. Highest consideration is given to the most exceptionally needy students who complete the financial aid application process by the suggested deadline. A separate loan application is not required but students must complete a Perkins Loan Promissory Note and Federal Perkins Loan entrance counseling (separate from Federal Direct Loan Promissory Notes and entrance counseling).

Prior to the semester in which students first borrow a Perkins loan while attending Carnegie Mellon, the university's HUB contacts Perkins awardees to request that borrowers sign the Perkins Loan Promissory Note and complete Perkins Loan Entrance Counseling via our Perkins Loan servicer website, ECSI.net. Students generally are able to access these documents shortly before the start of their first semester as a Perkins borrower and only after being contacted by the HUB to do so. Continuing students must meet the satisfactory academic progress requirements in order to be eligible for Federal Perkins Loans.

Federal Direct Loans

A Federal Direct Loan is an education loan provided by the U.S. Department of Education. There are two types of Federal Direct Loans for graduate students: Federal Direct Stafford Loans and Federal Direct Grad Plus Loans.

Federal loan borrowers must meet citizenship and all federal aid eligibility requirements and be enrolled in an eligible program on at least a half time basis (18 or more units). There is no credit check performed for Stafford Loan borrowers however Grad Plus Loan borrowers are subject to a credit check during the loan application process. Students who do not meet credit guidelines for the Grad Plus Loan may apply with a credit worthy cosigner. Please also refer to the steps to apply for financial aid.

Federal Direct Loan Rates

Interest rates on Federal Direct Loans are fixed for the life of the loan. Interest rates are established each year for new federal Direct Unsubsidized and new Federal Direct Grad Plus Loans for which the first disbursement is on or after July 1st through the following June 30th. The rate is equal to the sum of a uniform "index rate" plus and "add-on" of 3.60% for Stafford Loans and 4.60% for Grad Plus. The index rate is determined each year as the "high yield of the 10-year US Treasury note" auctioned at the final auction held prior to the June 1st preceding the July 1st of the year for which the rate is to become effective, plus the statutorily defined "add-on". The interest rate for a Federal Direct Loan, once established, will apply for the life of the loan. Actual rates and fees for 2013-2014 Direct Loans are shown in the next section.

2013-2014 Federal Direct Loan Rates and Fees

The interest rate for graduate Stafford Loans first disbursed between July 1, 2013 and June 30, 2014 is fixed at 5.41%. Federal Direct Stafford Loans first disbursed on or after December 1, 2013 have a 1.072% origination fee, which is deducted from the gross amount of the loan at disbursement. Between July 1, 2013 and November 30, 2013, the Stafford loan origination fee was 1.051%.

The interest rate for Grad Plus Loans first disbursed between July 1, 2013 and June 30, 2014 is fixed at 6.41%. Federal Direct Grad Plus Loans first disbursed on or after December 1, 2013 have a 4.288% origination fee deducted from the loan at disbursement. Between July 1, 2013 and November 30, 2013, the Grad Plus loan origination fee was 4.204%. Please note that students are advised to borrow their full Federal Direct Stafford Loan eligibility before borrowing a Federal Direct Grad Plus Loan. See loan comparison chart shown below.

Federal Direct Loan Repayment

Payment of principle and interest is deferred as long as the student meets the above enrollment requirements. Additionally, the Stafford Loan provides a 6-month grace period for loan repayment after graduation or ceasing half time enrollment (18 or more units).  Repayment of Grad Plus begins within 45 days of the end of the in-school deferment, however you may defer payment for 6 months after you cease to be enrolled on at least a half-time basis. Students have the option of making in-school payments, including interest-only payments. Any unpaid interest that accrues while the borrower is in an in-school deferment period is capitalized when repayment begins (added to the principle balance on the loan).

There is no prepayment penalty on Federal Direct Loans. Federal Direct Loans offer liberal repayment options including in-school deferments, unemployment deferments once in repayment, military deferments, economic hardship forbearance, loan forgiveness for certain public service employees, etc.

Stafford & Grad Plus Loan Comparison

Federal Direct Loan Type Loan Origination Fees Interest Rate Grace Period Interest Subsidy Maximum Academic Year Eligibility Requires Credit Check In School Deferment
Stafford 1.072% 5.41% fixed for the life of the loan for loans first disbursed July 1, 2013-June 30, 2014 6 mo. No $20,500

No

Yes

Grad Plus 4.288%

6.41% fixed for the life of the loan for loans first disbursed July 1, 2013-June 30, 2014

none* No Cost of attendance less other financial aid from all sources

Yes

Yes

*repayment of Grad Plus begins within 45 days of the end of the in-school deferment, however you may defer payment for 6 months after you cease to be enrolled on at least a half-time basis (18 or more units).

Federal Direct Loan Disbursement

Federal Direct Loans disburse to the student's university account electronically, generally in 2 equal payments, one at the beginning of each semester covered by the loan, with each disbursement occurring no sooner than 7 days prior to the start of each semester. Students who borrow in excess of allowable student account charges receive a student account "refund" that may be used to cover living expenses and other allowable education-related costs. Refunds are generally available within 10 days after the first day of each semester covered by the loan. Students are encouraged to sign up for e-refund via Student Information Online in order to avoid paper processing delays during the refund process.

Federal Loan Counseling

ENTRANCE COUNSELING

All  first-time federal loan borrowers at the Tepper School are required to complete one or more entrance counseling sessions as part of their federal loan application process. Entrance counseling provides information about your rights and responsibilities as a federal loan borrower and requires you to correctly answer related questions at the end of the session. Federal funds are not disbursed until after completion of the required loan entrance counseling.

Entrance Counseling for Federal Direct Loan Borrowers (Stafford and/or Grad Plus Loans)

Complete Federal Loan Entrance Counseling via www.studentloans.gov using your federal PIN (the PIN used to complete the FAFSA). Be sure to indicate that you are a graduate/professional student and include Tepper's federal school code, E00074.

Entrance Counseling for Federal Perkins Loan Borrowers

First-time Perkins Loan borrowers must complete Perkins Loan Entrance Counseling (in addition to Federal Direct Loan Entrance Counseling). Perkins Loan entrance counseling is done via our servicer's website, www.ECSI.net, using school code Z9, but only after being contacted by the HUB to do so, generally around the start of classes in the semester in which you are first offered a Perkins loan. These documents are not available to students prior to being contacted by the HUB.

EXIT COUNSELING

Upon graduating, ceasing enrollment, or dropping below half time status (less than 18 units), all Federal Loan borrowers are required by federal regulations to complete online exit counseling. The session provides information about your rights and responsibilities as a federal loan borrower and requires you to answer related questions at the end of the session. Students do not need to notify The Tepper School upon completion of their exit counseling requirement, but are welcome to contact The HUB with any follow-up questions.

Exit Counseling for Federal Direct Loan Borrowers (Staford and/or Grad Plus)

Federal Direct Loan borrowers complete exit counseling via The National Student Loan Data System (NSLDS).

Exit Counseling for Federal Perkins Loan Borrowers

Perkins Loan borrowers are required to complete a separate exit counseling session (in addition to Federal Direct Loan Exit Counseling) via our Perkins Loan servicer website, Educational Computer Systems, Inc. (ECSI).

Private Education Loans

Private education loans (also called alternative or non-federal education loans) may be available to students who do not qualify for federal loans, such as international students, or to students who wish to borrow private loans in lieu of federal loans. It is important to note that there is no income limit on borrowing some types of federal education loans, therefore, eligible borrowers are always encouraged to review and understand the costs, loan features and the many benefits of federal student loans and compare those costs and benefits to those of alternative loans before opting to borrow non-federal loans.

The interest rates on private education loans may be variable or fixed and the credit requirements, loan terms, loan fees, applicable grace period, application requirements, in-school payment requirements, etc. vary from lender to lender. Some lenders provide loans to international students who have a credit worthy cosigner who is a US citizen or permanent resident of the US. Contact individual lenders for details.

The maximum eligibility for private education loans is the average cost of attendance less financial aid from all sources. Individual lenders may have additional limits on the amount of private education loans that a student may borrow. Borrowers need to apply annually for each year in which they plan to borrow a private/alternative education loan.

Historical List of Private Loan Lenders

The Tepper School provides an historical list of private loan lenders from whom our students have borrowed education loans during the past 3-4 years. Students may choose any lender they wish, even lenders not shown on our historical list.

Applying For Federal Education Loans

April 16th is the suggested deadline for federal loan borrowers to submit the FAFSA and Tepper School Financial Aid Application. Students who do not meet the suggested deadline may still apply. The deadline is set to ensure that students have time to file their federal income tax returns before applying for financial aid and to ensure timely disbursement of loans for the Fall semester.

Learn more about applying for Federal Loans and begin the application process

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Applying For Private Education Loans

The private loan application process takes several weeks to complete. Students are advised to apply for private loans no sooner than 90 days before the start of classes for the first enrollment period for which the loan is intended but soon enough to allow 45-60 days for your loan process. The loan application process is a proactive process between you and your lender so borrowers should keep in close contact with their lender to make sure that the application process is progressing as expected.

International students who wish to apply for education loans to cover costs for tuition, living expenses, and other education-related costs may apply for a private education loan with a cosigner who is a US citizen or permanent resident of the US. Private loans generally disburse in equal payments at the beginning of each semester covered by the loan.

Learn more about applying for Private Loans and begin the application process

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Federal Loan Consolidation

Federal loan borrowers may want to consolidate their federal student loans into one new loan as a matter of convenience or for other reasons. Consolidation is not for everyone. For example, a student looking to lower payments through consolidation "may" be able to achieve that without consolidation through the extended repayment option.   Whether or not to consolidate your federal student loans is a very individual decision. Review the information on http://loanconsolidation.ed.gov/help/faq.html before deciding whether or not to consolidate your federal student loans.

Loan Deferment & Verification of Enrollment

Loan deferment requests and verification of enrollment are handled by The HUB. You may be eligible for an "in-school" loan deferment if you are a regular student enrolled in an eligible program on at least a half time basis (18 or more units). Your lender may request that you complete an enrollment verification or loan deferment request. At the start of each semester, and once your account is paid in full, you may request an enrollment verification to be sent to your lender online via Student Information Online (SIO). Once you are logged into SIO, select "Academic Information" then select "Verification" and complete the required information. If you prefer to have a paper loan deferment form completed, please fax the form to The HUB at 412-268-8084.

 

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