Financial Aid Loans

UNC is committed to making every attempt to keep the cost of attendance manageable for all students. However, even with this commitment to reasonable educational costs, many UNC students must take out student loans to meet their educational expenses. UNC has several loan options available. These are all low-interest loans which must be repaid. An educational loan is an investment in your education; it is also a tremendous financial responsibility since a loan must be repaid to the lender with interest. It is always best to borrow only what you need to meet your educational expenses.

Loan Counseling

In an effort to reduce the default rate for student loans, the Federal Government requires that all first time borrowers complete an online entrance counseling session.

If you have previously received a loan at UNC and have completed entrance counseling, for Stafford Loans you are NOT required to complete another session. You WILL be required to complete an online session if you received a loan while attending a different school even though you attended an entrance counseling session at that institution.

You can now do your Federal Direct Stafford Entrance Counseling on the web. An E-mail message will be sent to UNC when you have completed this requirement.

Once a session is completed, loan proceeds may be available in three working days, provided that all other disbursement requirements have been met.

If you are a graduate student and borrowing a Plus loan you will be required to complete Grad Plus Entrance Counseling this will provide information to you pertaining to Plus loans for graduate students.

In addition, student borrowers who are graduating must complete exit counseling online during the last semester of attendance. Failure to complete exit counseling may result in a hold on all University services and materials including transcripts, diplomas and registration.

Federal Loan Requirements

  • Applicants must have a current year FAFSA on file and eligibility determined by the UNC Office of Financial Aid.
  • Students must not be in default of a federal loan, owe a payment on a federal grant or have reached the lifetime borrowing limit.
  • All Stafford and PLUS Loans must be disbursed in two installments during the term of the loan.
  • First-time Stafford Loan borrowers must complete an entrance interview prior to receiving loan funds.
  • First-time Graduate PLUS borrowers must complete Grad Plus Entrance Counseling prior to receiving loan funds.
  • Stafford borrowers not returning to UNC must complete an online exit interview prior to leaving campus.
  • Borrowers must keep their lenders informed of any changes in enrollment status, name changes and/or address changes.
  • NSLDS (National Student Loan Data System) Federal Loan (Title IV), information will be submitted to NSLDS, and will be made accessible by guarantee agencies, lenders, schools determined to be authorized users of the data system.

Borrowing Strategies

Many of our students will be borrowing for the first time in their lives. Students should attempt to borrow the minimum amount possible to insure that after graduation they can comfortably accommodate student loan payments.

Whom can I contact if I have questions about processing?

If you have questions pertaining to processing your student loans please contact us at (970) 351-2502.

DL Federal Stafford Loan

The Federal Stafford Loan is a low-interest government loan to help you meet the cost of your education. If the loan appears as a Subsidized Stafford Loan on your award offer, this means that the loan is one on which the government is paying the interest on your behalf. If the loan is labeled Unsubsidized this means that the loan is not based on need and you should pay the interest on that loan while you are enrolled in school. You can defer the interest on an Unsubsidized Stafford Loan, but be aware that when you go into repayment you will need to pay the past interest as well as the current principal and interest on the loan. Starting July 1, 2012 Graduate students are only eligible for Unsubsidized Stafford Loans.

The Federal Stafford Loan (sub or unsub) has a 6-month grace period which means you do not have to start repayment of the loan until 6 months after you graduate, leave school or attend less than half time. The interest rate on these loans is fixed at 3.86% Unsubsidized or 3.86% Subsidized Stafford loans. The law caps the interest rate on these loans at 8.25%.

When you are offered a Stafford Loan you may adjust downward the amount you wish to borrow. Currently federal direct loans charge fees that are deducted from your loan disbursements. The government also may charge 1.072% default or guarantee fee. Consequently, your loan disbursement may be less than the gross amount by 1.5 to 2.5 percent.

There are both annual and aggregate loan limits for the Stafford Loan Program. Starting July 1, 2010 the limits for dependent students are $5,500 as a freshman of which no more than $3,500 may be subsidized; $6,500 as a sophomore of which no more than $4,500 may be subsidized; $7,500 as a junior & senior of which no more than $5,500 may be subsidized. Students who qualify to be independent can borrow additional unsubsidized loans up to $4000 for freshmen and sophomores and $5,000 as juniors or seniors. Graduate students can borrow up to $20,500 in unsubsidized loan, not to exceed the cost of attendance. Dependent students whose parents are denied the PLUS loan by the department of education may also borrow the Unsubsidized Stafford Loan according their year in school: Freshman/Sophomore $4,000 or Junior/Senior $5,000. All funds may not exceed the student's budget. Seniors graduating at the end of fall semester may have loan funds prorated based on hours enrolled.

Students cannot borrow more than $31,000 aggregate in Stafford Loans as an undergraduate. Independent undergraduates may borrow up to $57,500, but only $23,000 can be subsidized. Graduate students may borrow a total of $138,500 including all undergraduate loans.

The Federal Direct Stafford Loan requires you to sign a Master Promissory Note before any funds will be disbursed. Your promissory note is in electronic format and you will need to go to studentloans.gov to complete. That note is good up to 10 years so long as you continue to borrow. Students may also prepay on these loans without penalty.

Be sure to review the Borrower Rights and Responsibilities on our web site under Documents for additional information.

Loan Consolidation

You may consolidate your Stafford Loans to make it easier for you to repay your loans, either to combine loans under one lender or reduce your payment amount on a monthly basis. You are eligible to consolidate your loans during your grace period or during repayment, but you are advised to review all the benefits and loss of benefits that accompany loan consolidation.

Federal Perkins Loan

Like the Stafford or PLUS, you do not need to involve an outside agency to borrow a Perkins Loan. The lender for this federal loan is UNC and the funds that you are borrowing come from former UNC students repaying their Perkins Loans. Many students decline the Perkins Loan because the Perkins Loan amount is usually less than the Stafford Loan. Please compare the benefits of the loan programs before making a decision to decline or accept it.

Perkins Loans have a fixed interest rate of 5%. In addition, the grace period is six or nine months before you begin repayment on the loan. Perkins Loan can be consolidated with your Stafford Loans.

Students who plan to teach after graduation need to be aware of the particular cancellation provisions of the Perkins Loan. Each year the U.S. Department of Education publishes a list of schools that are considered to be disadvantaged. If the school in which you are teaching is listed, you may be eligible to have a portion of your Perkins Loan cancelled outright, thus reducing the amount you must repay.

The Perkins Loan also has annual and aggregate amounts that can be borrowed, but because the university decides the amount to be awarded under this program the annual and aggregate amounts are rarely reached. You also must sign a Master Promissory Note for the Perkins Loan. This is separate from the Stafford Promissory note. The Perkins MPN may be accessed by clicking on the link to the servicer ECSI.

DL PLUS (Federal Loan for parents of dependent undergraduate students)

Federal PLUS loans are offered to parents of dependent students. UNC requires that parents/students file the FAFSA to determine eligibility for this loan. These loans are equal to the cost of attendance minus other aid that the student accepts. Parents are not obligated to accept a PLUS loan, or can adjust the amount they wish to borrow, but a student can only borrow an additional unsubsidized Stafford Loan if the parent applies for the PLUS and is denied by the Department of Education.

Direct Lending does a credit check on the potential borrower of a PLUS Loan. If the parent has an adverse credit history, the loan can be denied. Parents who are denied can work with the government to have the loan approved. A PLUS credit check does go against the parent credit report, but the debt to income ratio test is not applied for a PLUS loan.

There is no grace period on a PLUS loan. This means interest begins to accumulate at the time the first disbursement is made. Parents must start repayment of both principal and interest on a PLUS loan within 60 days after full disbursement of the loan has been made. This usually means repayment begins during the spring semester, as the loan has two disbursement requirements, one in fall, and one in spring. There maybe provision to defer the PLUS loan payment until the student is out of school. Direct Lender offer interest-only payments for a limited time while the student is enrolled.

The interest rate is fixed at 6.41%. The law caps the interest rate on these loans at 9%. Like the Stafford Loan, Direct Lending may take fees out of the gross loan amount of up to 4.288% prior to disbursing the loan.

Please be aware that the PLUS Loan promissory note is also called a Master Promissory Note. If your parent has signed a PLUS Loan promissory note in the past with Direct Lending, your parent should not have to sign a new promissory note. If your parent has never borrowed a PLUS loan before, the promissory note must be signed in order for us to request funds. Parents will also need to complete a credit check by clicking on request a plus loan at the Direct Lending website. For step-by-step directions click here.

Be sure to review the Borrower Rights and Responsibilities on our web site under Documents for additional information.

DL Federal PLUS Loans for Graduate Students

The graduate PLUS became available for the 2006-2007 academic year. UNC graduate students who are Colorado residents will still have most of their cost of attendance covered by the current $20,500 allowed under the Federal Stafford Loan Program. Non-resident graduate students whose costs are not met by the current Stafford Loan levels may want to consider the PLUS loan as a means to make up the difference.

Please note that PLUS loans do not have the same terms as the Stafford Loans. PLUS loan amounts are based on cost of attendance minus other aid received. The interest rate is 6.41% fixed versus the fixed rate of 5.41% unsubsidized for the Stafford Loan.

You can contact the Office of Financial Aid to speak with a counselor if you need more information.

Private (Alternative) Loans

These are loans available to students and parents of students who may not qualify for need-based financial aid programs to help defer a portion or all of the cost of education at UNC. Alternative loans are private educational loans that are not guaranteed by the federal government. Since these are private funds with different eligibility requirements such as creditworthiness and debt to income ratio, some students will not qualify without a cosigner.

Before you borrow a private loan, you really should apply for student aid using the Free Application for Federal Student Aid (FAFSA) to determine your eligibility for federal student loans which offer better rates and terms than the private loans. Applying for aid will determine if you have eligibility for grant programs as well. Graduate students are urged to review the information on Graduate PLUS loans before borrowing an alternative loan.

If you must borrow a private loan, you can apply online or call the lender’s toll free number. UNC will certify the loan if you are eligible, be sure to pay attention to whether or not you must be making satisfactory academic progress to apply. Some alternative loans do not require that the university certify eligibility for the loan. In that case, the Office of Financial Aid would not have knowledge of the loan. If you receive a check directly from the lender and use that check to apply to your university bill, then the Office of Financial Aid will be notified by Accounts Receivable.

All alternative loans will be counted in your financial aid eligibility whether or not the Office of Financial Aid certified the loan. At that time we will post it as part of your financial aid award, which can affect the other aid you are receiving. Please keep that in mind if you are applying for these loans in addition to other aid. If you have additional education-related expenses, you may want to visit with a financial aid counselor to determine your eligibility for a cost of attendance adjustment.

UNC does not have a preferred lender list of private loan lenders and will certify any loan from any lender the family chooses. A comprehensive list of alternative loans, their terms and rates, is available at www.finaid.org/loans/privatestudentloans.phtml. Additional programs may be available through your personal bank or lending institution. We suggest that you do the research to determine which, if any, of the available programs will best suit your personal needs and situation. To ensure fully-informed borrowing you should refer directly to each lender’s loan application and promissory note for exact information regarding terms, assumptions, conditions, eligibility, definitions and annual percentage rates (APR).

Federal Student Loan Forgiveness

What loans qualify for this expanded loan forgiveness?

Qualifying federal loans for expanded teacher loan forgiveness now include Perkins Loans, federal Family Education Loans (FFEL), and Direct Loans that were borrowed on or after October 1, 1998. You are eligible if you did not have an outstanding balance on these loans on October 1, 1998.

Who qualifies for this loan forgiveness?

A teacher must meet all of the following criteria:

  • Borrowed Perkins & Direct Loans on or after October 1, 1998.
  • Taught at a low-income school for five years.
  • Highly qualified teacher. Math, science, and special education teachers are eligible for up to $17,500. Teachers who are highly qualified but do not teach math, science or special education are eligible for up to $5,000 in loan forgiveness.

How are loans forgiven?

Loans are forgiven through loan providers. Contact your loan provider to (1) make sure that your loans qualify and (2) ask any questions you have about the application process.

What is the definition of a low-income school?

A low-income school for teacher loan forgiveness purposes is a public or private non-profit elementary or secondary school that is located in a school district that qualifies for Title I funds and has more that 30 percent of the school's total enrollment made up of Title I Children.

  • The low-income school must be listed on theTeacher Cancellation Low Income Directory
  • Find and refer questions about low-income school eligibility and State Contact Information
  • Can therapists and other special education personnel besides teachers qualify for this loan forgiveness?

    No. At this point, only teachers qualify. "Teacher" means person who is qualified to provide direct classroom teaching or classroom-type teaching in a non-classroom setting. Click the link for more on the definition about Teacher Loan Forgiveness Program.

    Can current teachers who are getting certified use this loan forgiveness?

    Maybe. To qualify for Stafford and Perkins program loans, a student must be enrolled at a postsecondary school, including college, university , or proprietary school at least half-time.

    Can teachers be reimbursed for payments already made?

    No. Loan forgiveness is not retroactive. However, teachers can postpone payments of loans while they teach if the cancellation amount includes the remaining balance on the loan. Contact your lender for more information about loan forbearance.

    Additional Resources for Loan Forgiveness Information

    Perkins Loan Forgiveness Application: (Ask your school where you receive your Perkins Program Loan.)