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Understanding student loans

Loans are financial instruments that provide students and their families with funds to cover the costs associated with attending college or university, including tuition, fees, and living expenses. Unlike grants or scholarships, loans must be repaid over time, often with interest. They come in various forms, including federal student loans and private student loans, each with its own terms and conditions. While loans can be a valuable resource for financing education, borrowers should be mindful of their long-term financial implications and strive to borrow responsibly to avoid excessive debt burdens after graduation.

Financing your education is a significant step in achieving your academic goals. At USW, we are dedicated to assisting you in navigating the complex world of student loans. This comprehensive guide will provide you with an in-depth understanding of the types of loans available, how to apply for them, how to accept loans, and crucial considerations for responsible borrowing.​

Types of Student Loans

Federal Loans

Direct Subsidized Loans

*Undergraduates Only*

Direct Unsubsidized Loans

*Undergraduates & Graduates*

Direct PLUS Loans

*Parents & Graduates*

Other Loans

Private Student Loans

Lenders: Offered by private banks, credit unions, and other financial institutions.

  • Interest Rates: Fixed or variable rates, often based on creditworthiness.

  • Credit Requirements: Typically require a good credit history or a co-signer.

  • Repayment Terms: Vary by lender, with some offering in-school deferment options.

State-Sponsored Loans

Availability: Residents of specific states may qualify for state-sponsored loan programs.

  • Interest Rates: Competitive rates, often with benefits for in-state residents.

  • Eligibility: State-specific eligibility criteria; research your state's programs.

Applying for Student Loans

Federal Student Loans

To apply for federal student loans, complete the Free Application for Federal Student Aid (FAFSA). The FAFSA determines your eligibility for federal aid, including grants and loans. Ensure you meet application deadlines.

Private & State-Sponsored Student Loans

When considering private or state-sponsored loans, research and compare lenders to find the best fit for your needs. Apply directly through the lender's website. Be prepared to provide personal and financial information for credit evaluation.

Accepting Student loans

​Once a student's FAFSA has been reviewed, any awarded financial aid will be available in their student portal ("Self-Service"). For any loans to be applied to a student's account, they must individually accept or deny each loan. This can be done in Self-Service under the "Financial Aid" section. If accepted, awards will be divided equally between semesters, unless otherwise indicated.

If a student elects to accept any loans, they must then complete the loan process by 1.) participating in Loan Entrance Counseling; and 2.) completing a Master Promissory Note (MPN). These steps are available in Self Service under the "Financial Aid" checklist for each academic year to be completed with your FAFSA login.

Students and/or parents who enter into a loan agreement with Federal Direct Loans will have their loan information submitted to the National Student Loans Data System (NSLDS), which is accessible by authorized agencies, lenders, and institutions.

Loan Considerations

  • Interest Rates: Understand whether your loan has fixed or variable rates, as this affects future payments.

  • Repayment Plans: Federal loans offer flexible repayment options, including income-driven plans. Use this Loan Simulator to see your federal student loan repayment options.

  • Loan Forgiveness: Federal programs may offer forgiveness for public service or nonprofit work.

  • Loan Limits: Be aware of borrowing limits to avoid excessive debt.

  • Credit Requirements: Maintain good credit for private loan eligibility and favorable rates.

Note: When a student leaves/completes school or drops below half-time enrollment, they must complete Loan Exit Counseling.

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