Purdue University Northwest / Financial Aid / Types of Financial Aid / Loans

Loans

Federal Direct Loans

Federal Direct Loans are federal student loans offered by the U.S. Department of Education when you complete your FAFSA and meet eligibility requirements.

Students may accept or decline Federal student loans. If you accept your loan, understand a loan is a legal obligation that you are responsible to repay with interest.

Federal student loans have fixed interest rates and offer fixed and income driven repayment plans as well as deferment options if you are having trouble making payments.

Make Informed Borrowing Choices

Debt & Borrowing Money Tutorial

The following resources and tips can help you make informed borrowing choices:

  • When you receive your Direct loan, your loan servicer will contact you (you repay your loan to the loan servicer).
    • Notify your loan servicer when you graduate, withdraw from school, drop below half-time enrollment, transfer to another school or change your name or address
    • Repayment begins once you graduate, drop below half-time or leave school after your grace period
    • Half-time enrollment is at least 6 credit hours for undergraduate students and at least 4 credit hours for most graduate students
  • Use the Federal Student Aid Loan Simulator to calculate your monthly loan payments.
  • View the Department of Education video Responsible Borrowing.
  • Use the U.S. Department of Labor’s Occupational Outlook Handbook to estimate salaries for different careers or research employment.
  • Your Direct Loan Master Promissory Note (MPN) will have the terms of your loan. First-time borrowers need to complete the MPN and loan entrance counseling. The MPN will have a Plain Language Disclosure to help you understand your obligations.
  • Your Federal Direct loans will be submitted to the National Student Loan Data System (NSLDS) and will be accessible by authorized users of the data system.

Loan Types

Federal Direct Subsidized and Unsubsidized Loans are loans for students.

Direct Subsidized Loans are available to undergraduate students with financial need. The Department of Education pays the interest on a subsidized loan

  • while you are in school at least half-time
  • for the first six months after you leave school
  • during a period of deferment

Always accept the full amount of subsidized loan offered to you before accepting your unsubsidized loan. 

Direct Unsubsidized Loans are available to undergraduate and graduate students; financial need is not required.

Direct Subsidized and Unsubsidized loans have an annual limit and an aggregate limit.

  • The annual limit is based on grade class and level – if you progress from one grade level to another during the award year, let Financial Aid know. You may be eligible for additional loan.
  • The aggregate limit is the total amount you may borrow as an undergraduate or graduate level student. Once you reach the aggregate limit, you may not borrow additional Direct Subsidized and/or Unsubsidized loans.

Federal Direct Parent PLUS (Parent Loan for Undergraduate Students) is for the parent of a dependent student. The amount offered is typically the cost of attendance minus all other aid and resources. A parent may borrow less than the amount offered if desired.

Federal Direct Graduate PLUS is for graduate and professional degree students.

What is Grad PLUS Loan?

Federal Perkins Loans are no longer available Purdue Northwest. If you had a Perkins loan in the past at Purdue Northwest, your Perkins loan is serviced by Educational Computer Systems Inc. (ECSI).

Federal Loan Requirements

Purdue University Northwest students may choose to borrow a private loan in addition to or in place of a Federal Direct Loan. The Office of Financial Aid does not recommend any particular lender. Students are encouraged to compare the differences between Federal and Private Loans and discuss federal student aid options before applying for a private loan.

It is important for prospective borrowers to note that you may qualify for Federal loans or other Federal financial aid and that the terms and conditions of a Federal loan may be more favorable than the provisions of private education loans.

See the Truth in Lending Act Section 1638(e) for terms and disclosure related to private education loans.

Applications for private education loans or alternative loans are made by the student through a lender. Prior to disbursing a private loan the lenders are required to obtain a Private Education Loan Applicant Self Certification Form from the applicant.

Private Education Loan Applicant Self-Certification Instructions

 

Resources and Guides