Loans

Whenever you borrow money, lenders will issue a monetary for their service. This fee is called interest. While you are enrolled in school on at least a half-time basis, most student loans are interest-free and will not begin to accrue interest until six to nine months after you leave school.

There are some student loan types that are exceptions to this rule, and begin to accrue interest as soon as the money is disbursed to you:

• Federal Direct Unsubsidized Stafford/Ford Loan
• Federal Direct PLUS Loan
• Private loans

The cost of interest can significantly increase the amount of your monthly payments once repayment begins. For this reason, it is really important to be careful when borrowing money and to only borrow what you can comfortably afford to repay.

An origination fee is a one time, upfront fee that is issued by lenders to cover the administrative costs of processing your loan. The fee amount is a small percentage of your total loan amount and is deducted from the amount of money that is disbursed to you.

A detailed explanation and current interest rates, and origination fees can be found on Federal Student Aid’s loan page.

Repayment on loans typically begins six to nine months after you leave school. Any loans that you accept will need to be repaid, even if you do not complete your degree. It is important you only borrow what you can reasonably afford to repay after leaving school.

Most repayment plans for federal student loans give you 10 years to repay the loan.

When the time comes to repay your loans, you may have several repayment options to choose from. These options will vary based on the type of loan and the amount you borrow.

Most repayment plans for federal student loans give you from 10 to 30 years to repay the loan, depending on the plan that you choose.

Some loans offer cancellation provisions based on public service or teaching in low-income service areas. These options typically require a period of repayment before you become eligible for cancellation.

Your total loan amount will have the biggest impact on the amount of your monthly payments and the amount of time it takes to repay. You should never borrow more than you can comfortably afford to repay.

You can review the different repayment plans on Federal Student Aid’s loan page.

Repayment on student loans may be deferred temporarily if you return to school half-time or join the Armed Service, Peace Corps, VISTA, comparable volunteer organizations, or become a law enforcement officer.
You can review more details on the Federal Student Aid loan repayment page.

The University of Washington participates in the major federal student loan programs to give our students the full range of options available for paying for college. Federal student loan programs offer a secure, government-regulated, reasonably affordable way to invest in yourself and your goal of a higher education. You should only borrow federal loans if you absolutely need to, and never borrow more than you can comfortably afford to repay.

There are several different types of federal student loans. Review Federal Student Aid’s loan page to learn more about the below loans:

• Federal Direct Subsidized Stafford Loans
• Unsubsidized Stafford/Ford Loans
• Federal Direct Parent Loan for Undergraduate Students (PLUS)

The Federal Health Profession/Nursing Loans require your electronic signature on a master promissory note available on MyUW. You will need to sign only once for all Health Profession/Nursing Loans you borrow at the UW. These loans will be repaid to the University’s loan servicer after you leave school.

The Federal Direct Parent Loan for Undergraduate Students (PLUS) enables parents to borrow for their dependent undergraduate children. These loans are based on credit, not on need. However the maximum amount borrowed annually may not exceed $20,000 annually.  The maximum amount for all Direct PLUS Loans that may be borrowed by a parent for a dependent student over the course of their undergraduate study is $65,000 per child regardless of any amounts repaid, forgiven, or discharged.

Students must first complete the aid application to be considered for a Federal Direct PLUS Loan. From there, if a parent wishes to borrow this loan, the parent borrower must complete an electronic application for the loan and sign a master promissory note electronically. During the application process, the parent borrower will have options to defer repayment while your student is attending school, specify if the loan funds may pay non-tuition charges, determine if any credit balance is refunded to you or to your student, and specify the loan amount to borrow.

The PLUS Loan has no interest subsidy and should be regarded as a last resort for most students and their parents.
When pursuing this loan, be sure to take some time to determine how much you need to borrow, and specify the loan amount you want. Please avoid selecting the maximum. Only borrow the amount you think you’ll need.

To learn more about the parent loan program, visit the Parent Loans page.

Private education loans (also called private or alternative loans) are non-federal loans offered by banks, credit unions, and other private lenders. These loans can help cover remaining college costs when federal, state, and other financial aid do not fully meet your cost of attendance.

We strongly encourage you to complete the FAFSA and borrow any available federal student loans before considering a private loan, as federal loans typically offer more flexible repayment options and borrower protections. Student loans are financial obligations that must be repaid. Pay careful attention to the terms and conditions of any loan you accept to help pay for school. Do not borrow more than you need or can repay comfortably after leaving school.

Private education loans differ from federal student loans in several important ways:

• Credit-based approval: Eligibility is based on creditworthiness rather than financial need. Most students will need a creditworthy cosigner to qualify.
• Interest rates: Interest rates may be fixed or variable and can vary by lender, credit history, and market conditions.
• Repayment options: Repayment terms and grace periods vary by lender and may begin while you are enrolled in school or after you leave school.
• Consolidation limitations: Private education loans cannot be consolidated with federal student loans.
• Borrower protections: Private education loans generally offer fewer borrower protections and repayment benefits than federal student loans.

Students may borrow up to the cost of attendance minus other financial aid received.

If you determine that a private loan is needed, you should carefully research and compare lenders. Be sure to review:

• Interest rates (fixed vs. variable)
• Repayment options
• Cosigner requirements and release options
• Deferment and forbearance benefits

Choosing a Lender

The University of Washington cannot recommend specific lenders. Loan terms and borrower eligibility vary widely, and the best option depends on your individual financial situation

Application Process

Most private loans are applied online directly through the lender. Once you apply, the lender will request certification from our office to verify your enrollment and cost of attendance. If approved, funds are typically sent to the University for disbursement. If you receive a loan outside of this process, you must report the amount to our office. Failure to do this could cause an overpayment situation, and you may need to repay some or all the aid received.

Self-Certification Requirement

Federal regulations require most borrowers to complete a self-certification form before a private loan can be finalized. This form promotes informed borrowing by encouraging you to review your financial aid options.

The form is provided by your lender and requires information such as your cost of attendance and financial aid received (grants, scholarships, and federal loans). This information can be found in your MyUW account under “Financial Aid Status.” You will need:

• Total Budget
• Resources
• Total Aid Offered

If you have not completed a FAFSA or have questions, please contact our office.

Disbursement Timeline

Federal regulations require a three-business-day “right to cancel” period after you receive your final loan disclosure. Funds cannot be disbursed until this period has passed. We recommend applying several weeks in advance to ensure timely payment of tuition and other expenses.

Resources for Students

Federal and Private Loan Differences

The Office of Student Financial Aid has funds available for short-term loans to assist students with temporary cash flow problems. Short-term loans are available only to students who are currently attending the university (loans cannot be processed between quarters). Students who are auditing courses or those enrolled but not earning credits are not eligible for short-term loans. Funds are generally available within one to four working days depending on if the loan is paying charges on your account or you are having the funds sent to your bank via direct deposit.

Repayment is due by the next quarter, or whenever additional funds such as financial aid arrive on account, whichever comes first. There is no interest on the short-term loans, but there is a $30 service charge added to the repayment amount. Students may apply on-line through MyUW’s Personal Services (paper application forms are also available if you come to 105 Schmitz Hall but the processing time is longer). Please read all of the information below – borrowing a loan is an important responsibility. If you have any questions, feel free to talk to a counselor in the Office of Student Financial Aid, 105 Schmitz Hall, or call 206-543-6101.

Eligibility requirements

University of Washington students may be able to borrow a short-term loan for tuition, books, or other expenses if they:

• Are registered in regular credit-earning classes in the UW Student Database
• Do not have an outstanding short-term loan
• Have a good repayment record on any prior short-term loan(s) (no more than two late payments)
• Have a means of repayment by the next quarter

Any prior short-term loans must be paid in full before another loan can be taken out. Please review your budget and needs for the entire quarter when deciding on the requested amount.

Maximum amounts and cost of borrowing

• $2,500 for Undergraduates
• $3,200 for Graduate/Professional students

There is no interest, but a service charge of $30 will be added to the repayment amount for each loan. Late penalties and collection costs will be assessed if not paid by the due date.

Loan proceeds may be applied directly to your tuition account, disbursed directly to you, or a combination of both.

Repayment

Short-term loans are billed through the Student Accounts system (like the tuition bills). All loans are due “on demand,” which means that any aid coming in after a short-term loan has been disbursed will be used to repay any outstanding current year short-term loan. Aid will not repay loans borrowed in the previous aid year (the aid year is from Summer – Spring quarters). If you borrow a short-term loan during Spring quarter, or get an extension on a Winter quarter loan, you will be responsible for making sure that the loan is repaid on time. If aid does not pay the loan in full, repayment is due by the fourth Friday of the next quarter.

Additional repayment information is available from Student Fiscal Services, 129 Schmitz, 206-543-4694.

Extension of the due date

For students unable to pay in full by the next quarter, there is a one-time extension until the following quarter available. To request an extension, you may apply online or go to Student Fiscal Services, 129 Schmitz. An additional $30 service charge will be added to the total repayment amount. Requests for extensions made after the original due date will have additional late charges added if a loan is not paid on time.

NOTE: Students who have financial aid should be aware that requesting an extension will not prevent the next aid disbursement from repaying the short-term loan if it was taken out during the same school year, no matter when the new due date is. If you have unusual circumstances, please see a counselor in the Office of Student Financial Aid, 105 Schmitz Hall, or call 206/543-6101.

Consequences of not repaying on time

Every quarter, many students benefit from the short-term loan program. However, these funds need to be paid back in a timely manner so that other students can continue to benefit in future quarters. Before you take out a loan, consider:

• How much do you really need?
• What is the due date? Will you be able to pay the loan back by then?
• How will you repay the loan, and what is your back-up plan?

If you do not pay the loan back by the due date late fees will begin to accrue. Your account may be referred to an outside collection agency, and it will be reflected on your credit record. You will receive letters and phone calls about the overdue account. No deferment or forbearance options are available for short-term loans. Short-term loans may not be available to you in future quarters.

Plan ahead. If your loan becomes past due, or if the due date is near and you don’t have the funds to repay, contact Student Fiscal Services right away, at 206/543-4694 or e-mail sfshelp@u.washington.edu. Talk to a loan specialist and find out your options. If your loan goes past due, financial aid may no longer automatically pay it back since your account will be transferred from Student Accounts to an outside billing system.

How to apply and receive your loan proceeds

To apply, go to MyUW and select “Short-Term Loan Application” from the list of Personal Services to complete the application and electronically sign the promissory note. You will be informed of your eligibility as soon as you submit the application. If your application is approved, your funds will be applied to your student account immediately, as follows:

• If you checked “Tuition & Fees” on the loan application, the loan will be applied to the outstanding tuition and fee balance on your student tuition account
• If you checked “Cash” OR if you have loan funds left over after your tuition balance is paid, your remaining funds will either:
  • Be direct deposited to your bank account, if you are signed up for direct deposit, and will be available in about three working days or
  • Be mailed to your LOCAL address the following business day if you are not signed up for direct deposit. Be sure to confirm your address information is correct on MyUW.

You will be sent a confirming e-mail with a copy of the promissory note as an attachment, for your records. The amount of loan repayment that you now owe will also be added to your student tuition account, along with the date the repayment is due.

If you have read the information above and think that you are eligible to apply, go to MyUW for the application. If you have any questions, please contact a counselor in the Office of Student Financial Aid, 105 Schmitz Hall, or call 206-543-6101.