Direct Loans

Most students take advantage of various federal loan programs which are administered through the NNU Office of Financial Aid. We share your concern about college debt and are committed to counseling and educating students and their families about the best options available.

Federal Direct Loan Program

The Federal Direct Loan Program has been in existence since the early 1990's and provides two types of loans: Subsidized Loans and Unsubsidized Loans. A Subsidized loan means that the government pays the interest on your loan while you are in school, in your grace period, or in deferment. The interest rate is fixed at 3.86% for the 2013-2014 school year through June 30, 2014.

An Unsubsidized Loan accrues interest while you are in school and you are responsible for the interest payments. The interest payments can be made while you are in school or this amount will be added to the principal of the loan. The interest rate is a fixed rate of 3.86%. Both of these loans have a 1.072% processing fee for the 2013-2014 school year, this amount is taken out before funds are sent to the school on the student's behalf.

To qualify for a Subsidized Loan you must demonstrate financial need. This is done by taking the information on your FAFSA form and analyzing it compared with your other financial aid. To qualify for an Unsubsidized Loan you do not have to demonstrate financial need, but the costs of your education must exceed any other financial aid you have been awarded.

To receive this loan a student borrower must be either a U.S. Citizen, U.S. National or eligible non-citizen and not be in default on any education loan or owe a refund on any education grant. The student must be at least half-time (6 credits) during a semester to receive this loan. Please refer to the award letter sent to you by the NNU Financial Aid Office to determine the type(s) and amount of Direct student loan you are eligible to receive. Once you have this information, you can apply online for the Direct student loan.

Federal Direct Student Loan Limits 

 

Year in School

Dependent Students

Independent Students

Additional Unsubsidized Amount for Dependent / Independent Students

Freshman

$3,500

$3,500

$2,000 / $6,000

Sophomore

$4,500

$4,500

$2,000 / $6,000

Junior

$5,500

$5,500

$2,000 / $7,000

Senior

$5,500

$5,500

$2,000 / $7,000

 

 

Perkins Loan

The Federal Perkins Loan is a low-interest, long-term loan which is provided by the federal government and NNU. This loan is awarded on the basis of financial need as determined by the student's Free Application for Federal Student Aid (FAFSA) analysis.

NNU has very limited Perkins loans funds to offer its students in the coming year. The NNU Financial Aid Office will try to assist as many students as possible with the loan funds that are available, helping the neediest students and those who met the priority filing deadline (March 1st) for the FAFSA first. 

As mentioned above, the Perkins loan is subject to fund availability, up to $4,000 may be borrowed by an undergraduate student per award year. The maximum cumulative amount an eligible undergraduate student may borrow is $20,000. The current interest rate is 5.0%.  Interest begins accruing nine months after the student leaves school. Your monthly payment will depend on the size of your debt and the length of your repayment period as well as the interest rate. 

While eligibility is based on need and fund availability, student's must also be enrolled at least half-time and making satisfactory academic progress to receive this loan. First consideration is given to education, social work, and nursing program majors. 

For more information on the Perkins Loan repayment and credit click here

Parent PLUS Loan

The PLUS Loan is for parents borrowing on behalf of dependent students. The PLUS loan is in the parent's name and cannot be transferred to the student. A parent can apply for a Direct parent loan on the web at www.studentloans.gov using the parents PIN number.  

The amount you may borrow annually is determined by subtracting the financial aid awarded to the student (including any loans) from the total costs of attendance determined by the school. There are no annual borrowing limits set by the federal government. However, the amount you can borrow may be impacted by creditworthiness. Please refer to the award letter sent to your student by the NNU Office of Financial Aid to determine the amount of PLUS loan you may need to borrow.

Parent borrowers must:

  • Be borrowing on behalf of a dependent undergraduate student;
  • Be either a U.S. Citizen, U.S. National or eligible non-citizen;
  • Not be in default on any education loan or owe a refund on any education grant;
  • Not have an adverse credit history as defined by the Department of Education.

The PLUS loan interest rate is a fixed rate of 6.41%. With a PLUS loan, you pay a 4.288% origination fee. The origination fee goes to the federal government to offset program costs, the remaining amount is sent to the school. These loan funds are electronically disbursed in two disbursements (one in fall and one in spring) directly to the school and posted to the student's account. Even though a fee is deducted, parents are responsible for repaying the entire loan amount. Loan terms vary based on total amount borrowed. Re-payment of this loan begins within 60 days of the final disbursement unless the parent borrower has requested deferment. If a parent is denied the PLUS, limited additional Direct Unsubsidized student loan funds are made available to the student. 

Alternative Loans

If you need additional funding to supplement your financial aid package, alternative student loans are an option. Alternative loans are private loans offered by lending institutions. They are not part of the federal government’s Direct Loan program.

We encourage you to first file the Free Application for Federal Student Aid (FAFSA) to be considered for all other available aid programs before pursuing alternative loans. Our office strongly encourages you to first utilize any grants, scholarships, work study employment and federal student loan eligibility before considering alternative loans. The interest rates and repayment terms with alternative loans are generally less favorable than those of the federal student loan programs. 

Northwest Nazarene University does not recommend any specific lenders for private alternative loans. If you decide to utilize an alternative loan, we recommend comparing the loan products and lenders to find the best interest rate and repayment options for your situation. Please remember that you will have to pay back these loans with interest, so only borrow what you need.

NNU uses ELMSelect as an online, lender-neutral platform to display a historical list of lenders and education loan products that our students have used over previous years. These lenders have not been ranked and are presented in no particular order.

Visit ELMSelect to view some Alternative loan options. 

Repayment

For Federal Direct Student Loan Programs, loan repayment begins six months after you graduate, withdraw, or drop below half-time status for the loans you have borrowed while attending NNU. The exact schedule and amount of your repayment will not be known until your loan repayment begins. Check with the Department of Education for more information and loan repayment calculators to assist you in estimating your monthly payment. 

If you had student loans prior to attending NNU, please be aware that you may have already used your 6 month grace period for those loans. As soon as you graduate, withdraw, or drop below half-time status and even possibly with half-time status if you do not have a new loan for that year, you can enter repayment on those prior loans immediately.

For loan deferment options, it is best to contact the Department of Education. Please also contact the Department of Education regarding consolidation www.loanconsolidation.ed.gov. If you are unsure who your lender is, please contact the Financial Aid Office or log into www.nslds.ed.gov using your FAFSA pin number. This wesite will only show your federal student loan and grant history and does not include any alternative or outside loans you may have borrowed.