Student loans, unlike grants and work-study, are borrowed money and must be repaid, with interest, just like car loans and mortgages. Loans are legal obligations, so before you take out a student loan, think about the amount you’ll have to repay over the years.
Student loans are provided at low interest rates and are available to most students. You must complete the FAFSA (Free Application for Federal Student Aid) to determine which loans you qualify for. Depending upon the specific loan program, repayment may begin while the student is still enrolled, or after the student leaves school or drops below half-time enrollment.
A subsidized loan is awarded on the basis of financial need. If you're eligible for a subsidized loan, the government will pay (subsidize) the interest on your loan while you're in school. Depending on your financial need, you may borrow subsidized money for an amount up to the annual loan borrowing limit for your level of study. For current interest rates, refer to the Federal Student Aid website.
Unlike a subsidized loan, you are responsible for the interest from the time the unsubsidized loan is disbursed until it is paid in full. You can choose to pay the interest or allow it to accrue (accumulate) and be capitalized (added to the principal amount of your loan). Capitalizing the interest will increase the amount you have to repay. For current interest rates, refer to the Federal Student Aid website.
The current loan origination fees can be found on the Federal Student Aid website. For first-time loan borrowers, you must complete Entrance Loan Counseling and Loan Agreement for Subsidized/Unsubsidized Loans (MPN) at studentaid.gov. In addition, the Annual Student Loan Acknowledgement must be completed annually.
Annual loan limits reflect the maximum combined borrowing from both the subsidized and unsubsidized programs. The annual grade-level loan limits are as follows:
- Freshman (0-29 earned credit hours): Dependent student $5,500/Independent student $9,500
- Sophomore (30-59 earned credit hours): Dependent student $6,500/Independent student $10,500
- Junior (60-89 earned credit hours): Dependent student $7,500/Independent student $12,500
- Senior (90-125 earned credit hours): Dependent student $7,500/Independent student $12,500
- Graduates: $20,500 or cost of attendance, whichever is higher
The combination of subsidized and unsubsidized loans cannot exceed the lifetime maximum of $31,000 for dependent undergraduates, $57,500 for independent undergraduates, and $138,500 for graduates.
Mid-Year Grade Level Loan Adjustments
Your financial aid is packaged on an annual basis. If you change grade levels during the middle of the academic year and would like to be considered for additional loan funds based on your new grade level, please contact the Student Financial Services Office to request a review of your enrollment hours and financial aid package.
Parent PLUS Loan
Parents can borrow a PLUS Loan to help pay their child’s educational expenses if they are a dependent undergraduate student enrolled at least half time in an eligible program at an eligible school. Parents must have an acceptable credit history. The first payment is due within 60 days after the loan is fully disbursed. There is no grace period for these loans. Interest begins to accumulate at the time the first disbursement is made. Parents must begin repaying both principal and interest while the student is in school. Through this program, parents may borrow each year up to the total cost of attendance minus all other financial aid. The current interest rate and loan origination fees on PLUS loans can be found on the Federal Student Aid website.
To apply for a Parent PLUS Loan, you will need to complete the online application and Master Promissory Note at studentaid.gov. In addition, the Annual Loan Acknowledgement must also be completed annually.
Parent PLUS Loans will be applied to student account balances before all other student loans. All tuition waivers, grants, and scholarships will be applied to the student account balances first. Parent PLUS Loans are applied next, followed by all other student loans.
If a parent is denied a Parent PLUS Loan due to adverse credit history they will need to select one of the following options:
- Obtain an endorser and complete PLUS Credit Counseling – An endorser is someone who does not have an adverse credit history and agrees to repay the loan if you do not repay it. More information can be found at studentaid.gov.
- Request a credit decision appeal and complete PLUS Credit Counseling – You must document to the satisfaction of the U.S. Department of Education that the information causing the adverse credit decision is incorrect, or there are extenuating circumstances related to your adverse credit history. More information can be found at studentaid.gov.
- Request Wayne State College to offer an additional Unsubsidized Stafford loan to the student – This is a loan that the student is now eligible for based on the parent receiving a denial of the Parent PLUS loan. The loan will be offered to the student on WildcatsOnline and they will have to log in to accept it. This request must be made in writing.
Reduce your debt by reducing your loan amount
Once you see your account charges or get your refund, you might decide you don't need to borrow that much money. You can minimize your loan debt by reducing your loan or canceling it completely.
How to cancel or reduce your loans
You'll get an email message about your right to cancel or reduce your loans. (If your parent borrowed a Direct Parent PLUS Loan, he or she will get a message as well.)
Be sure to read the important information below before you complete the form. If you don't want to cancel or reduce your loan, just ignore the message.
You should be sure to reduce or decline your loans before they post to your student account. If you get a refund before we receive your loan adjustment request, we'll let you know how much you need to repay to WSC and you will need to make payment immediately following the adjustment. Your student account will then have a balance due.
Important information about canceling or reducing your loans
You may use the Direct Loan Change Request Form or the Parent PLUS Loan Change Request Form to request a change to a federal loan only if you are the borrower. For example, a parent may not adjust a Federal Direct Student Loan on which their student is listed as the borrower. If you are not the borrower, your request will be denied.
Unsubsidized loans will be reduced or canceled before subsidized loans. Any refunds you've already received may need to be returned. If the cancellation or reduction leaves an outstanding balance in your student account, you must use personal funds to pay the balance in full immediately. Failing to do so will result in late payment fees and other institutional penalties.
Alternative/Private Educational Loans
Alternative private loans are offered through a lending institution and are not a part of federal student aid programs. Interest rates and fees for private loans vary between lenders and are typically based on the credit of the borrower and cosigner. It is the responsibility of the student to research and understand the implications of borrowing an alternative educational loan. Keep in mind that alternative loans, along with other aid and educational resources, can never be more than the cost of attendance.
We strongly encourage students to file a Free Application for Federal Student Aid (FAFSA) to determine their eligibility for federal student aid before considering alternative loan options. To compare alternative loan lenders, Wayne State College uses ELM Select. This allows students to compare various alternative loans. This is a historical listing of lenders used by our students. Students are encouraged to compare these loans with one another, as well as with alternative student loan products offered by other lenders. Students have the right to use a lender that is not listed at ELM Select.
All students who have borrowed through the Federal Direct Stafford Loan Program must complete exit loan counseling when they graduate, withdraw from school, transfer out, or drop below half-time enrollment. To complete exit loan counseling, go to studentaid.gov and log in with your FSA ID and password.