Loans

Federal and private loans are used to supplement personal and family resources, scholarships, grants and work-study. Loans accrue interest and must be repaid.

To be considered for any federal loan at Virginia Commonwealth University, students must file the Free Application for Federal Student Aid and have the results sent to the VCU Office of Financial Aid. Information provided on the FAFSA must be complete and accurate. Failure to resolve any problems with the processing of the application, or delays in resolving the problems, may preclude the student from being considered for these loans.

If a student uses loans to pay for university charges and then reduces expected credit hours during the drop period, any refund due from this reduction in charges may go to repay the loans. If a student withdraws from all classes or drops below half time, any refund may also go to repay the loans.

Loans are not automatically renewed. Borrowers must apply annually and continue to meet eligibility requirements, including satisfactory academic progress.

Federal direct subsidized and unsubsidized loans are undergraduate and graduate loans funded by the federal government.

Federal direct subsidized loans are based on financial need. The federal government pays the interest during in-school, grace and deferment periods.

Federal direct unsubsidized loans are not based on financial need, and the federal government does not pay the interest for these loans. Students may choose to defer interest payments until repayment begins; however, the student is responsible for all interest that accrues. The accrued interest automatically capitalizes to the loan principal.

To be considered for an award, the student must:

  • Be enrolled at least half time (six or more credit hours each semester for undergraduates, five or more credit hours each semester for graduates)
  • Be a U.S. citizen or eligible noncitizen
  • Demonstrate financial need (subsidized loans only)
  • Maintain satisfactory academic progress (SAP)
  • Not owe a refund on a federal student grant or be in default on a federal student loan

Entrance and exit counseling

The federal government requires students to participate in entrance counseling prior to receiving a federal direct loan for the first time. This must be satisfied prior to loan disbursement.

Students receiving federal loans must also complete an exit counseling session once they graduate or drop below half-time enrollment. Failure to complete exit counseling will prevent students from receiving a diploma, obtaining transcripts or registering for classes in future terms.

Master promissory note

In order to receive your federal direct loan funds, you must complete a Master Promissory Note (MPN).

Current regulations allow students to sign one promissory note that will be used for all subsidized and unsubsidized loans borrowed for up to 10 years. Therefore, returning students who received federal direct subsidized or unsubsidized loans at VCU beginning with the 2006-07 academic year may not be required to sign another loan promissory note.

Award amounts

Award amounts are initially offered based on full-year, full-time enrollment and are prorated for students who enroll less than full year, full time. Students in a second bachelor’s degree program may borrow at undergraduate maximum loan limits.

 

Dependent (as defined by the FAFSA)

Independent

 

Annual maximum loan amount

Total lifetime loan limit

Annual maximum loan amount

Total lifetime loan limit

Freshmen (less than 24 earned hours)

$3,500 + $2,000

$31,000

$9,500

$57,500

Sophomore (24 to 53.9 earned hours)

$4,500 + $2,000

$31,000

$10,500

$57,500

Junior/Senior (54 or more earned hours)

$5,500 + $2,000

$31,000

$12,500

$57,500

Graduate

   

$20,500

$138,500

Professional-
Medical/Dental

   

$44,944

$224,000

Professional-
Pharmacy

   

$33,000

$224,000

Professional-
Health Administration

   

$33,000

$224,000

Professional-
all other

   

$20,500

$138,500

  • The more federal direct loan funds borrowed during fall and spring, the fewer loan funds will be available for the following summer.
  • The graduate debt limit includes outstanding loans from undergraduate programs.
  • Dependent students whose parents’ have been denied PLUS loans due to adverse credit history may be eligible to borrow additional unsubsidized funds.

Interest rates and Loan Fees

The Interest Rates and Loan Fees on Direct Loans are determined by the Department of Education. Please visit https://studentaid.ed.gov/sa/types/loans/interest-rates for current Interest Rates and Loan Fees.

Loan disclosure

Students will receive their loan disclosure statement from the federal Loan Origination Center 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.

In order for the funds to be disbursed, students MUST accept the amount of loans that they wish to borrow in eServices. Students may decline or reduce the amount of their 2019-2020 loans by filling out the Financial Aid Award Change Form, or by notifying the VCU Office of Financial Aid in writing. 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.

Disbursement

Federal regulations require two disbursements of all federal direct subsidized and unsubsidized loans. If all necessary documents have been received and there are no changes in expected enrollment status, the first disbursement should be made during the first week of classes and the second disbursement should be made during the first week of classes of the second semester for fall/spring loans.

Refunds are deposited directly to the student’s designated bank account. If a student does not specify a bank account, a refund check will be mailed to the student’s permanent address on file.

Federal Direct PLUS loans are low-interest loans that graduate and professional students and parents of dependent undergraduate students can use to pay education costs not covered by other aid. These loans are not based on financial need, and the federal government does not pay the interest.

To be considered for these loans, students must:

  • Complete the FAFSA
  • Be enrolled at least half time
  • Be a U.S. citizen or eligible noncitizen
  • Be enrolled in a degree or certificate-granting program

Additionally, parent and graduate borrowers must complete the PLUS Loan application online at studentloans.gov. Applications for summer aid (part of the 2018-19 academic year) will be available online in mid-March and 2019-2020 applications will be available in mid-May.

To borrow a PLUS loan for a student, the parent must be the student’s biological or adoptive mother or father. A stepparent is also eligible to borrow a PLUS loan if his or her income and assets would be taken into account when calculating the dependent student’s expected family contribution (EFC). A legal guardian is not considered a parent for federal student aid purposes.

Graduate students and parent borrowers will be required to pass a credit check. Borrowers with adverse credit history or who have filed bankruptcy in the past may be denied the PLUS loan. Borrowers who do not pass the credit check may still be able to receive a loan with a creditworthy co-signer. Additionally, if a borrower does not pass the credit check, the student may be eligible for a federal direct unsubsidized loan.

Promissory notes

In order to receive federal Direct PLUS loan funds, the borrower must complete an electronic Master Promissory Note (MPN).

Borrowers will receive their PLUS disclosure statement from the federal Loan Origination Center for each new loan borrowed. The disclosure statements provide information about the amount of money borrowed, the loan period and the anticipated disbursement dates. Borrowers should maintain the statements for their records.

If a co-signer is used on a PLUS loan, the borrower must complete a new MPN each year the co-signer is needed.

In order for the funds to be disbursed, students MUST accept the amount of loans that they wish to borrow in eServices. Borrowers may decline or reduce the amount of their original 2019-2020 loan request by filling out a Financial Aid Award Change Form, or by notifying the VCU Office of Financial Aid in writing. 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.

Award amounts

The yearly limit on a federal Direct PLUS loan is equal to cost of attendance (COA) minus any other available financial aid. For example, if the COA is $10,000 and the student is eligible for $8,000 in other financial aid, parents could borrow up to $2,000. Please check studentaid.ed.gov to see current interest rates and origination fees

There is a fee deducted from each disbursement of a federal Direct Graduate PLUS loan. This fee goes to the federal government to help reduce the cost of this loan.

Disbursement

Federal regulations require two disbursements of all federal Direct PLUS loans borrowed within an academic year. If the loan is approved and all necessary documents have been received, the first disbursement should be made during the first week of classes, and the second disbursement should be made during the first week of classes at the beginning of the second semester for fall/spring loans.

Refunds are mailed to the loan borrower. Parent borrowers can request to have refunds released to the student by indicating this option on the loan request form.

Alternative loans are designed to help students and their families cover costs not included in their federal financial aid package.

Interest rates, repayment terms, loan limits, eligibility and co-signer requirements and loan fees vary by lender. Loan approval is generally based on creditworthiness and ability to repay. Interest rates are typically higher than federal direct loans.

When applying for an alternative loan, students should understand the terms of each loan and ensure that they are applying for an alternative loan, not a federal student loan. Students are automatically considered for federal direct subsidized and unsubsidized loans when submitting the FAFSA.

The VCU Office of Financial Aid recommends that students explore all federal student aid options prior to applying for private loans.

Applications for alternative loans are submitted electronically through the lender’s website. ELMSelect provides students and families with information on frequently used private loan lenders.

The Virginia Commonwealth University Office of Financial Aid is committed to helping students achieve their educational goals by providing them with appropriate resources and guidance. VCU prides itself in providing students and their families with a professional and unbiased approach to making the dream of higher education a reality. Our objectives include helping students by providing as much student aid as is available from all sources of federal and state assistance, institutional grants/scholarships and private scholarships offered outside sources and student loans. As such, we believe strongly in Statement of Ethical Principles and the Code of Conduct provided by NASFAA.

Lender selection

Virginia Commonwealth University does not have a preferred lender list. VCU offers a historical list of lenders that students have used in prior years. Compliant to the Higher Education Opportunity Act (HEOA), which was signed into Federal law Aug. 14, 2008, VCU has established the following provisions for maintaining a recommended/preferred lender list. It is intended to ensure that VCU complies fully with the federal law governing student lending and that all decisions concerning student loans are made ethically, free from conflicts of interest and in the best interests of the borrowers, students and parents.

VCU believes it is important to give students and parents a starting point for beginning the student loan search. It is our goal to provide a historical lender list for borrowers to present them with lenders who offer good service and benefits. VCU does not recommend any particular lender to our students. VCU utilizes the ELM Resources platform to display our historical lender list to students and families.

The following information is available upon request or on VCU's website: Lender selection process; statement that borrowers are not limited to borrow from the lenders on the historical list and that VCU will process loans through any lender they select; comparative information regarding interest rates and other benefits offered by lenders.

Students have the right to choose the lender of their choice. We will process any loan application received, regardless of the lender chosen. VCU will continue the following practice per the Student Loan Sunshine Act (H.R. 890):

  • Establish and maintain a process for selecting lenders based on benefits to borrowers and disclose the rationale for selecting lenders included on the historical list. VCU will disclose this information to students and lenders.
  • Disclose the criteria and process used to select lenders on this historical list.
  • Continue to indicate to students that they have the right to choose the lender of their choice.
  • Continue to provide a large sampling of lenders to choose from (minimum of three non-affiliated lenders).
  • Identify to students if lenders on list are affiliated with other lenders.
  • Employees will not serve on lender advisory boards.
  • The university will not enter into a risk-sharing agreement with a lender.
  • The university will not allow staffing in the financial aid office by lenders.

Lender list disclosures

Virginia Commonwealth University strongly recommends a student complete the Free Application for Federal Student Aid (FAFSA) to determine if they are eligible for more favorable types of Title IV aid before applying for a private education loan.

A student's financial aid award will reflect the maximum Title IV grant for which they are eligible. A student can review our grants page to see the maximum grants available, based upon eligibility. We highly recommend that students review our student loan page to ensure that they are borrowing at the maximum Federal Loan amounts before borrowing private/alternative loans.

We recommend that students borrow a Federal Direct Loan before a private/alternative loan because:

  • Federal Direct Loans typically have a lower interest rate, better repayment options, and loan forgiveness options.
  • Federal Direct Loans are guaranteed to the student as long as they complete the necessary paperwork. Private/alternative loans require credit approval and usually a cosigner.
  • Students may be eligible for interest-free subsidized loans (this will be determined by the Office of Financial Aid).
  • Federal Direct Loans are completely in the student’s name, not in a cosigner or parent’s name.

VCU will process a student's Federal Direct Loan and/or private loan in a timely manner whether or not they choose a lender from our historical list.

VCU will not allow a lender included on its historical lender list to use the name, emblem, mascot or logo of the University in the marketing of private loans to students that would imply VCU endorses or recommends that lender over another.

Our historical lender lists comply with the regulatory requirements prescribed to us from the Department of Education.

Disclosure of student enrollment and address information is made available to Title IV and private loan lenders through the National Student Clearinghouse. This data is updated by the Office of Records and Registration at the end of each term or at the time a student terminates their enrollment with the university.

Code of conduct for education loans

Compliant to HEOA, which was signed into Federal law Aug. 14, 2008, and the amendments added later, VCU has established this Code of Conduct for Education Loans.

It provides guidance and regulations to VCU employees involved with student loans to follow. It will be made available to them annually and accessible via VCU's website. In addition to the disclosures above, VCU employees will adhere to the following principles in the university's financial aid operations and will receive annual training on these standards of conduct:

Revenue-sharing

VCU and its employees will not participate in any revenue sharing loan products where the university receives any sort of profit from the loans the student and/or parent borrows.

Gifts

VCU and its employees will not accept, solicit or receive any gift or payment of other than nominal value (established as $10 per employee) from a lender. This includes payment or reimbursement for lodging, meals or travel to conferences or training sessions. VCU and its employees will not allow lenders to print financial aid pieces that have the university logo.

Contracting arrangements

VCU will not enter into consulting or contracting arrangements with any lender.

Lender assignment

VCU does not require any borrower, first-time or continuing, to select a specific lender. We will process a loan in a timely manner through any lender a borrower chooses.

Opportunity pool loans

VCU will not request or accepted any offer of funds for loans in exchange for providing the lender with a preferred lender arrangement or a specified number of loans or loan volume amount.

Staffing assistance

No lender shall provide staffing assistance to VCU except for the following: professional development training, educational counseling, financial literacy or debt management, provided the materials disclose to borrowers the identification of any lender that assisted in providing such materials.

Lender advisory boards

No VCU employee shall receive any remuneration or reimbursement of expenses for serving as a member or participant of a student loan advisory board of a lender's advisory board or council.

Private loans versus federal loans

VCU will continue to inform students about Title IV loan availability and options before proceeding to certify an alternative loan.

Lender selection

VCU provides its lender selection process on the Office of Financial Aid website. It also is available upon request.

 

 

 

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