Loans & Financing Options
Free interactive tools are available through CashCourse to help you with financial literacy throughout college and beyond. Below is information and tips about how to pay for your higher education.
Where Can I Find Money for School?
1. Free Application for Federal Student Aid (FAFSA)
- The FAFSA is a free application that determines what federal aid you will be eligible to receive. This includes federal and state grants, federal work study, and student loans. Even if you don't qualify for grants or work study, you could still be eligible for some type of student loan.
- Apply for federal aid online at studentaid.gov. NEVER use www.fafsa.com. This site offers the same service as studentaid.gov, but you will be charged to file the FAFSA.
- You must file the FAFSA every year. For the 2023-24 school year the FAFSA is open now
*For the 2024-25 school year the FAFSA will open December 2023.
2. Scholarships
- PSU offers many opportunities for Institutional Scholarships and Athletic Scholarships.
- There are scholarships and grants beyond what PSU awards. Research other funding that you may be eligible for by searching different sites online. Be sure to use caution when searching for free money online. If a fee is required to apply for a scholarship, it is a good indication that it is not legitimate. You can also search within your community. Different businesses, churches, and employers may offer scholarships.
- Use these sites to help you in searching for private aid:
- Use these sites to help you determine if a scholarship is legitimate:
3. Student Employment
- Student employment is another way to help meet your remaining expenses. If you meet all of your expenses with free money and earnings from employment you can avoid borrowing student loans. Many student employment positions on-campus are between 8:00-4:30 Monday-Friday and will work around your class schedule. Some on-campus jobs even allow you to work on homework or study while at work!!
- Visit with Career Development about applying for student employment.
4. Loans
- Nursing Loans
- Students must demonstrate financial need to be eligible for a Nursing Loan.
- The interest rate is fixed at 5%.
- Subsidized Direct
- Students must demonstrate financial need to be eligible for a Subsidized Direct Loan.
- The government pays the interest while the student is enrolled at least half-time and during a six month grace period after graduation or dropping below half-time.
- Interest rates can change annually, but the new rate will only effect loans that are borrowed after the change. You lock in your interest rate at the time you receive your loan. Current Interest Rates.
- Unsubsidized Direct
- Students do not have to demonstrate financial need to be eligible for an Unsubsidized Direct Loan.
- The government does not pay the interest while the student is enrolled or during the six month grace period before repayment. Interest will begin accruing on this loan from the time of disbursement.
- Interest rates can change annually, but the new rate will only effect loans that are borrowed after the change. You lock in your interest rate at the time you receive your loan. Current Interest Rates.
- Parent PLUS
- Complete a Parent PLUS Loan application
- Students do not have to demonstrate financial need to be eligible for a Parent PLUS Loan.
- A parent of a dependent student applies for the PLUS Loan, not the student. This means that the parent is the one responsible for repaying the loan. Repayment begins 60 days after the loan is fully disbursed. For a Parent PLUS Loan that is for the fall and spring semesters, repayment would begin 60 days after the spring amount is disbursed.
- Although repayment begins while the student is still in school, the parent can request a deferment to postpone their payments while the student is enrolled at least half-time.
- Interest rates can change annually, but the new rate will only effect loans that are borrowed after the change. You lock in your interest rate at the time you receive your loan. Current Interest Rates.
- Unlike student loans, Parent PLUS Loans can be denied based on adverse credit. If a parent is denied for a PLUS Loan it is likely that the student would have additional eligibility for loans. A student will not be eligible for additional loans just because the parent chooses not to apply for a Parent PLUS Loan.
- Alternative/Private
- Students do not have to demonstrate financial need to be eligible for an Alternative/Private Loan.
- These loans are through private entities, not the Department of Education, therefore interest rates, fees and repayment terms will vary.
- Alternative Loans must be applied for separately from federal aid and are based on the student's credit. The lender will perform a credit check to determine if the student is eligible.
- Many college students find they are not eligible unless they have a co-signer. The co-signer is responsible for repaying the loan if the student fails to do so.
- Alternative/Private Loans are also available for qualifying parents.
- Compare private loan options.
Student Loans are financial obligations that must be repaid. Pay attention to the terms and conditions of any loan you choose to accept. Do not borrow more than you need or can repay comfortably after leaving school. See below for more borrower information.
5. Payment Plan
- The Office of Cashiers and Student Accounts offers a payment plan options which allows students the opportunity to make payments during each semester.
What Every Borrower Should Know
Subsidized/Unsubsidized Direct Loan Limits
There are laws that limit how much a student is allowed to have in Direct Loans for an academic year. The amounts are based on grade level.
Annual Limit
| Grade Level | Dependent Maximum | Independent Maximum |
|---|---|---|
| Freshman | $5,500 | $9,500 |
| Sophomore | $6,500 | $10,500 |
| Junior | $7,500 | $12,500 |
| Senior | $7,500 | $12,500 |
There are also laws that limit how much a student can borrow while working on a degree. It doesn't happen often, but there are times that a student will exhaust their loan eligibility before finishing their degree. This generally only happens when a student takes longer than the typical amount of time required to complete their degree.
Advantages of Direct Loans Vs. Private Loans
- Direct Loans are federal aid so the government is able to keep the interest rates very low and affordable compared to private lenders.
- There are many repayment options for Direct Loans. When repayment begins the borrower will be placed on the standard repayment plan. If the payments are not manageable you have other options.
- Working in certain professions can make a borrower eligible for loan forgiveness. The most common profession is teaching. If you think you will be eligible to have your loans forgiven, research the Department of Education's Loan Forgiveness Policies.
- Direct Loans are more easily accessible than Private Loans. Direct Loans are not based on your creditworthiness and the FAFSA is your application.
Repayment
Knowing your debt is an import ascpet when considering higher education as many of our students rely on loans to finance their schooling. Please see Student Loan Repayment for more information regarding how much you owe, repayment options, and consequences of default
- Student loan payments should not exceed 8-10% of your gross monthly income. Think about what your expected earnings will be when you graduate and determine if you will be able to afford your payments.
- Jump$tart Reality Check lets you answer questions about how you want to live your life after graduation. Using the information you put in, it will tell you how much you need to make in order to maintain that lifestyle.
- The following chart shows the annual income recommended in order to afford repayment for different loan debt ranges:
| Annual Income Range of Maximum Affordable Student Loan Debt | |
|---|---|
| $25,000 | $13,616 - $16,958 |
| $30,000 | $16,306 - $20,383 |
| $35,000 | $18,997 - $23,807 |
| $40,000 | $21,769 - $27,150 |
| $45,000 | $24,459 - $30,574 |
| $50,000 | $27,150 - $33,998 |
| $75,000 | $40,766 - $50,957 |
| $100,000 | $54,381 - $67,915 |
| $125,000 | $67,957 - $84,900 |
| $150,000 | $81,487 - $101,887 |
| $200,000 | $108,767 - $135,827 |
- The average loan debt of a PSU undergraduate student set to graduate this year is $21,408. For a student with this amount of debt to be able to afford their payments it is recommended they earn $35,000 a year.
- A dependent student that takes out the maximum loan amount for four years would borrow $27,000. Considering that some of that loan would be unsubsidized we can assume that the loan debt at graduation would fall into the $27,150-$33,998 loan debt range. In order to be able to afford repayment for that loan amount it is recommended that the annual income is at least $50,000.
- This is why it is so important to consider your plans after college before deciding to borrow student loans. The majority of students do not start out earning $50,000 per year right out of college.
- Paying just $20 extra per month on a student loan of $20,000 would save you $907 in interest and reduce the number of payments from 120 to 107.
- If you must take out a student loan, only borrow what is needed. Try not to take the maximum offered if you don't need that much.
- See Student Loan Repayment options.