As you and your family discuss how to pay for college, the amount that will be financed (i.e., paid over an extended period of time) is a very important issue. The Financial Aid Office will guide you to the lowest cost financing available for your family’s financial situation and fully present all of the available options. You may also receive solicitations at home asking you to utilize various education financing options—please feel free to use us as a resource as you sift through those alternatives.
Federal student loans will be included in your financial aid package. There are also non-need-based student and parent loans available to help meet some or all of your family’s expected contribution.
The ultimate decision about whether or not to borrow through these programs or through your own private resources (such as a home equity loan) is yours. However, we urge you to educate yourself about the options available through the college both for ease of borrowing and for comparable, sometimes lower, rates.
Federal Student Loans
Federal Direct Student Loans are low-interest loans provided to students with capital provided by the federal government. The Direct Loan may be offered as a Subsidized or an Unsubsidized Loan or a combination of both. Repayment of the loan principal begins six months after the student graduates, withdraws, or enrollment drops below half-time status. For more information about Federal Student Loans, click here.
- The Subsidized loan is a need-based loan and no interest accrues while the student is enrolled (at least half time) or during deferment periods. The interest rate on the Subsidized Stafford Loan for the 2016-17 Academic Year will be fixed at 3.76%.
- The Unsubsidized loan is not based on need and interest accrues while the student is in school. It is the student’s responsibility to pay the interest as it accrues OR the student can choose to have the interest capitalized (added to the principal balance). The interest rate on the Unsubsidized Stafford Loan for the 2016-17 Academic Year will be fixed at 3.76%.
The Direct Student Loan origination fee is 1.068% which is deducted from the loan at the time of disbursement. For example, if you are borrowing $1,000, only $990 will show up in your student account. Direct loans are disbursed equally on the first day of each semester. First-time borrowers must complete the FAFSA, a Direct Loan Master Promissory Note (MPN), and Entrance Counseling.
The yearly amount students can borrow each year for Subsidized and Unsubsidized loans depends on their grade level and dependency status.
Federal Direct Parent Loan (PLUS)
Federal Direct Parent PLUS Loans can be used by a parent to borrow on behalf of dependent undergraduates. The parent borrower may be the student’s mother, father, or stepparent (if the stepparent’s income and assets were reported on the FAFSA) of the student. While parents of all income levels are eligible to apply, a credit check is required and performed by the U.S. Department of Education. For more information about PLUS Loans, click here.
Eligible parents may borrow up to the cost of attendance minus any other aid received by the student.
The interest rate for Direct PLUS Loans for the 2016-17 Academic Year is 6.31%. Interest is charged during all periods, beginning on the date of the loan’s first disbursement. PLUS Loans are also subject to a 4.272% origination fee which is deducted from the loan at the time of disbursement. For example, if you borrow $1,000, only $956.00 will show up in the student account.
Unlike federal loans, student alternative (or private) loans are non-federal educational loans offered through private lenders typically issued in the student’s name and requiring a credit-worthy co-signer. Alternative loans have variable and fixed rate options. Interest rates are based on credit scores. Some alternative loans may require interest payments while you are in school, have more fees, and less flexible repayment options than federal loans. These loans vary in terms, conditions, and eligibility requirements. You should carefully evaluate the criteria for each private loan program to determine the one that best meets your unique needs and situation. For more information about Alternative Loans, click here.
St. Olaf College is not affiliated with any private lenders and does not suggest nor endorse lenders – students may choose any lender who offers alternative educational loans for students who attend St. Olaf. We offer a student alternative loan lender selection tool, FASTChoice, compiled of lenders that other St. Olaf students have utilized in the past 3-5 years. Again, you are welcome to choose any lender you wish. Here is a more comprehensive list of Student Alternative Loans that may offer additional options. The lender selection tool will provide you with information on each loan product in a way that helps you understand and compare them.
St. Olaf offers payment plans through Tuition Management Systems that allow you to pay the balance due using a monthly or quarterly installment plan. For information on Payment Plans, click here.
Option 1- Two Semester Payment Plan
You will be e-billed in late July for the fall semester, and in late December for the spring semester. The fall semester payment is due August 26, 2016. The spring semester payment is due January 20, 2017. If payments are late, a finance charge of 0.5% per month will be assessed on the unpaid balance.
Option 2 – Monthly or Quarterly Payment Plan
Should you wish to pay monthly or quarterly, you will need to set up an account with Tuition Management Systems (TMS). TMS’ plans allow you to pay your balance due in either ten or four equal payments. The annual enrollment fee payable to TMS is $70 for the year or $47 for one semester. TMS payment plans for the 2016-17 academic years commence on July 15, 2016 and for no additional fee, can be set to automatically deduct from a checking account. However, should you wish to pay via credit card, TMS will accept MasterCard, Visa, Discover, or American Express. Please be aware that TMS will charge you a convenience fee of approximately 2.99% of the transaction if you choose to pay via credit card. For those who join the monthly plan after July, catch-up payments will be required. If you have further questions, please contact TMS directly at 888-713-7234.
The Student Accounts Office cannot make any payment plans or payment arrangements for outstanding balances. If a monthly payment plan will be best for you, please enroll with Tuition Management Systems.