Financial Aid Office

Student & Administrative Services Center, Rm. 1013 · (570) 327-4766 or (800) 367-9222 · Fax: 570.321.5552

Types of Loans

Penn College Switching to Federal Direct Student Loan Program

Beginning with the 2010-11 academic year, Pennsylvania College of Technology is joining thousands of other U.S. colleges and universities in the William D. Ford Federal Direct Student Loan Program. We are making this move to ensure continuity of service for you in light of Congressional moves to change the federal student loan program, as well as ongoing changes in the student loan industry. Please refer to our frequently asked questions on the transition to Federal Direct Loans.

Grants, scholarships, and student employment may not be sufficient to cover necessary educational-related expenses. You may want to consider a student loan to supplement other financial aid amounts. Loans that help meet college expenses must be repaid.  Carefully budget your expenses to avoid relying too heavily on loans. Remember, whether you complete your educational program or not, you must pay back loans. There are three types of educational loans available:

Direct Stafford Loans

The Federal Direct Stafford Student Loan program is the most widely used student loan program. Borrowing limits, interest rates, and terms of repayment are defined by the U.S. Department of Education. Direct Stafford Loans are available to virtually all students enrolled in a degree or certificate program. The interest rate is no higher than 6.8%, both while students are in college, and during repayment. Federal law makes it a fixed interest rate.
Key points of the Direct Stafford Loan program:

  • You must have submitted a FAFSA to be eligible.
  • You must be enrolled in 6 or more credits each semester.
  • You must not be in default on any federal educational loan or owe a refund on an educational grant.
  • There is no credit check.
  • Repayment begins 6 months after you graduate, withdraw, drop below half-time (5 or fewer credits) status, or stop attending.
  • You can choose to make interest payments while you are enrolled in college.
  • You have up to 10 years to repay.
  • The amount that you can borrow per year is determined by the number of credits you have earned toward your program or major (refer to table below).
Academic Level/
Credits Earned Toward
Your Program/Major
Dependent Students
Annual Loan Limit
 Independent Students
(or dependent student
with PLUS denial)
Annual Loan Limit
Freshman
Less than 30 credits earned
toward degree or certificate		 $5,500
($3,500 between subsidized
and unsubsidized, plus an additional $2,000 unsubsidized) 		$9,500
($3,500 between subsidized
and unsubsidized, plus an
additional $6,000 unsubsidized)
Sophomore
30 or more credits toward an associate's degree or certificate
or
30 to 59 credits toward
a bachelor's degree		 $6,500
($4,500 between subsidized and unsubsidized, plus an additional $2,000 unsubsidized) 		$10,500
($4,500 between subsidized and unsubsidized, plus an additional $6,000 unsubsidized)
Junior or Senior
60 or more credits toward
a bachelor's degree		 $7,500
($5,500 between subsidized and unsubsidized, plus an additional $2,000 unsubsidized) 		$12,500
($5,500 between subsidized and unsubsidized, plus an additional $7,000 unsubsidized)
What is the difference between subsidized and unsubsidized Federal Direct Stafford Loans?
When should I apply for a Direct Stafford Loan?

If you will start attending during the Fall Semester, apply anytime after April 1 of that year and at least three weeks before your tuition eBill is due in early August. If you will start during the Spring Semester, apply after October 1 of the previous year and at least three weeks before your tuition bill is due in mid-December. However, the Financial Aid Office cannot actually credit your student account with a loan until after you schedule classes.

How do I apply for a Federal Direct Stafford Loan?

You must complete all of these steps in the following order to receive a Federal Direct Stafford Loan:

* These applications only need to be completed once per academic year. If you are unsure if you have completed them, please contact the Financial Aid Office.

If I don't need the maximum Direct Stafford Loan funds in any one semester, how can I reduce my amount?

Although we credit your eBill with the maximum Direct Stafford Loan amounts, we encourage you to be conscious of keeping your loan debt to a minimum. You do not have to accept the maximum amount. To cancel any part or all of your Direct Stafford Loan funds, please contact the Financial Aid Office.

Direct Parent PLUS Loan

The Federal Direct Parent Loan for Undergraduate Students (PLUS) lets parents borrow money to pay the education expenses of their dependent student. The interest rate is higher than it is for Federal Direct Stafford Loans, at a fixed 7.9% rate.

  • Students must be enrolled in 6 or more credits each semester.
  • The U.S. Department of Education will perform a credit check on the parent applicant.
  • Parents normally begin repayment when their student is in college, although they can request to defer payments by contacting the Direct Loan Servicing Center.
  • Parents have up to 10 years to repay.
  • The annual loan limit is the cost of attendance minus the amount of all other financial aid a student will receive.
When should your parent apply for a parent Direct PLUS Loan?

If you will start attending during the Fall Semester, your parent can apply anytime after May 1 of that year and at least three weeks before your tuition eBill is due in early August . If you will start during the Spring Semester, apply after October 1 of the previous year and at least three weeks before your tuition eBill is due in mid-December. However, the Financial Aid Office cannot actually credit your student account with a loan until after you schedule classes.

How does your parent apply for a Federal PLUS Loan?
  • You (student) must review and revise, if needed, your Penn College Financial Aid Application (FAA) for the upcoming academic year.* (You will need to complete a FAA if you do not have one for the year your parent is applying for the loan.)
  • Student and parent(s) must complete a FAFSA for the academic year.*
  • Next, there are three (3) separate steps to a Parent PLUS Loan application. All steps must be completed in the following order to receive a Parent PLUS
    1. Your parent borrower must submit a PLUS Loan Request with the U.S. Department of Education at studentloans.gov. Your parent clicks on the green 'Sign In' box to sign in using your parent's Federal PIN. This request will initiate a credit check. (If your parent is denied, please refer to this additional information. If your parent is approved, your parent should continue to steps 2 and 3.)
    2. On the same website as in step 1, your parent borrower completes a Direct PLUS Master Promissory Note (MPN)http://www.pct.edu/cgi-bin/images/external_link.gif.
    3. Your parent borrower must complete the Penn College Parent PLUS Loan Request Form and submit the completed form to the Financial Aid Office.
    • Please note that only the following browsers have been certified for use with this site: Internet Explorer 6, Internet Explorer 7, and Mozilla Firefox 2.0. If you use a browser that has not been certified for use, you may encounter difficulties completing the MPN and we will not receive notification of your submitted MPN.

* These applications only need to be completed once per academic year, if you are unsure if you have completed them, please contact the Financial Aid Office.

Separate MPNs need to be submitted for different students in the same family.

How much can my parent borrow?

The academic year limit on PLUS Loans is equal to your total cost of attendance minus the sum of all other financial aid you receive. For example, if your total cost of attendance is $20,000 and you receive $4,000 in other financial aid, your parents could borrow up to, but no more than, $16,000.

Could my parent be denied a parent PLUS loan?

Yes, because the Direct Parent PLUS loan is based on creditworthiness. A credit report of a parent borrower will be pulled and reviewed by the U.S. Department of Education. If your parent is denied a PLUS loan the U.S. Department of Education will automatically send your parent borrower an appeal packet outlining the steps to take to appeal the credit decision or to obtain a creditworthy endorser (cosigner) for a Federal Direct Parent PLUS Loan.

If your parent knows there is an issue with his/her credit report or does not have an endorser to use, the PLUS denial would stand and you would then be eligible to receive an additional unsubsidized Federal Direct Stafford Loan. If you are interested in the additional unsubsidized Direct Stafford loan, you should contact the Financial Aid Office to make sure we have a copy of the denial. We are unable to process the additional unsubsidized Stafford Loan without a copy of the PLUS denial. The amount which you are eligible to receive is based on your grade level.

Private Alternative Loans

If your cost of education exceeds your total funding from grants, scholarships, and government-backed loans, a private or alternative loan is another option. A private alternative loan is a non-federal educational loan, through a private lending institution, typically issued in a student’s name and requiring a creditworthy cosigner. Each private alternative loan lender has different eligibility requirements, loan rates, repayment terms, and conditions.

These student loans are not backed by the federal government, but are offered by a number of reputable lenders.

  • Lenders perform a credit check on each student and cosigner
  • Interest rates and fees vary, so look for the best deal (review our list of questions to ask the lender below)
  • Maximum loan amounts, grace periods, and repayment periods also vary
  • Apply quickly online through the lender's website
  • Most lenders require that you're enrolled in 6 or more credits a semester
When should I apply for a private alternative loan? 

We first encourage you to submit a FAFSA for the academic year, to learn if you qualify for government grants and other types of financial aid. We also recommend borrowing from the Federal Direct Stafford Loan program before considering a private alternative loan. If you will start attending during the Fall Semester, apply anytime after June 1 of that year and at least three weeks before your tuition bill is due in early August. If you will start during the Spring Semester, apply after October 1 of the previous year and at least three weeks before your tuition bill is due in mid-December.

Do not apply for a private alternative loan more than 90 days prior to the beginning of the semester for which you are applying. Otherwise, your credit check may run out and your loan will not be valid at the time of scheduled disbursement.

How do I apply for a private alternative loan?

Please first refer to these questions. They will give you guidance on how much to apply for and how to choose a lender. Below we provide a list of lenders that we recommend. Click on the hyperlinks to learn more about each lender and/or to apply, and do not hesitate to call or e-mail lenders with questions about their products. Please understand that you do not have to choose a lender that we have listed. If you choose a lender other than one listed below please notify the Financial Aid office so that we can ensure your loan application is received to process.

Note: Due to a recent amendment to the Truth in Lending Act, students who apply for a private alternative loan after February 14, 2010, will need to complete the following steps. Please allow sufficient time for processing, as these new requirements may delay loan disbursements by an additional 1-2 weeks.
  1. Apply for a private alternative student loan through the lender of your choice.
  2. Send any requested documentation for you and/or your cosigner to your lender.
  3. Sign your loan application or promissory note. Instruct your cosigner to also sign the application, if applicable.
  4. If you are pre-approved, accept or decline your loan offer from the lender.
  5. Complete the Private Alternative Loan Self-Certification form provided by the lender. If your lender does not provide you with the Self-Certification form, print the Department of Education’s Private Education Loan Applicant Self-Certification form. All the information you need to complete the Self-Certification form is found on your Estimated Budget Analysis available on SIS. The following steps will guide you to the Estimated Budget Analysis;
    1. Log in to SIS.
    2. Under 'Financial Information', select 'View Financial Aid Information'.
    3. From 'Select Year', choose the academic year for which you are applying for the loan.  This will bring you to the Financial Aid Package page; at the bottom select 'Estimated Budget Analysis' to find your cost (of attendance) and estimated financial assistance for the period of enrollment covered by your loan. 
    4. Return the completed form to your lender.
  6. Read and understand the three separate disclosures you will receive from your lender throughout the application process. You will receive one disclosure when you apply, another disclosure when you are approved by your lender and offered the loan, and the final disclosure will be sent prior to disbursement.
    Your loan will not disburse until all required documentation is received by the lender.

You have the right to select the private alternative lender of your choice. Below is a list of lenders with whom Penn College students have conducted business in the past 3-5 years. Neither Penn College nor the Financial Aid Office promotes, endorses, or recommends any of these loan products or lenders by including them on the list.

An alternative loan is an agreement between the borrower and cosigner and the lender. Penn College cannot in any way be held liable in the event the borrower is dissatisfied with the rates, terms, or service provided by any lender, nor is Penn College responsible for any damages incurred by the student as a result of the student's choice of lender.

Be Aware

Please note that you may be inundated by mailings and advertisements about private alternative loans. We want to caution you about direct-to-consumer loans, which may have higher interest rates and associated fees than the private alternative loans we recommend and certify. Please contact the Financial Aid Office with any questions.

Upromise

Upromise is a program that allows you to help reduce your student loan debt. Various merchants will contribute a percentage of purchases you make from them toward your student loan. Family and friends can join on your behalf. Be aware that many of Upromise's partners require online purchases.

Debt Management

Loans, of course, need to be repaid along with interest. From the start, be conscious of keeping your loan debt to a minimum. Good planning and preparation for courses can reduce both the amount of time and the amount of loan money that you need to complete your degree. This loan repayment calculator offered by the Department of Education can estimate the amount of your monthly loan payment after you finish your education.

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Williamsport, PA 17701

(570) 326-3761
(800) 367-9222