Loan Programs and Terms
The terms of educational loans all vary from program to program. Whether you have been are borrowing a Pomona College loan or a Federal Perkins or Federal Direct loan or you are searching for a suitable educational loan to finance a portion of your family contribution, the terms of the loan will affect in the years to come. Understanding the terms of the loans in your financial aid award, or loans you expect to obtain, will help in determining your rights and responsibilities as a borrower. Please use the links below to explore your loan options, or to learn more about the loans you have been offered. Feel free to contact our office if you have additional questions or concerns.
Subsidized Student Loans
Federal Perkins Loans
Federal Perkins Loans are available to students based on funding and eligibility requirements set by the Federal Methodology. Federal Perkins Loans are long-term, low interest (5 %) loans. No interest is charged nor is repayment required on Federal Perkins Loans while a borrower is enrolled in school at least half-time. Repayment begins nine months after a student graduates, leaves school, or drops below half-time enrollment. Depending on the amount borrowed, the repayment period can be up to 10 years. The annual Federal Perkins Loan limit is $5,500 for undergraduate students. The aggregate loan amount available for undergraduate study is $27,500. For more information, visit the Federal Student Aid website.
Federal Direct Loan Program
The Federal Direct Loan Program offers both subsidized and unsubsidized student loans. Students qualifying as needy through application of the Federal Methodology pay no interest on their loans while enrolled in school at least half-time; during the in-school period, the interest is paid by the government. If a student does not qualify for the interest subsidy, he or she is required to pay interest during his or her enrollment period. No loan principal must be repaid during the in-school period regardless of the eligibility for the interest subsidy. Borrowers of both subsidized and unsubsidized loans do not begin to repay their loan principals until six months after they graduate, drop below half-time, or withdraw from school.
The interest rate on subsidized Direct loans disbursed between July 1, 2011 and June 30, 2012 is fixed at 3.4%. The interest rate on unsubsidized Stafford loans is fixed at 6.8%. Students in their first year of college may borrow up to a maximum of $5,500, and no more than $3,500 may be subsidized. Students in their second year may borrow a maximum of $6,500, and no more than $4,500 may be subsidized. Students in their third and fourth years may borrow a maximum of $7,500, and no more then $5,500 may be subsidized. For more information, visit the Federal Student Aid website.
Pomona College Loans
Pomona College Loans are interest free while the borrower remains in school.
In addition, there is also an interest-free program available on a restricted basis to graduates of California high schools. Recipients must be U.S. citizens, enrolled full-time, and be in good academic standing. In past years, there has been a family income ceiling for these programs. This policy is reviewed annually as is the maximum loan amount available. The special application for this program is available to admitted students upon acceptance of an offer of admission.
Parent Loans
Federal Direct PLUS Loan
The Federal Direct PLUS Loan offers parents the opportunity to borrow their portion of educational expenses each year. This loan is borrowed on an annual basis up to the full cost of education and loan fees each year, less any financial aid. Interest on Federal Direct PLUS loans begins to accrue immediately once the loan is made and repayment must begin within 60 days.
The interest rate on Federal Direct PLUS loans is fixed at 7.9%. At the time the loan is made, the parent is charged a fee of up to 4% of the loan principal. All fees are deducted proportionately from each loan disbursement. There is no income restriction or needs test for the PLUS program. A satisfactory credit check is required for loan approval.
Parents may complete a promissory note and initiate a credit check for Direct PLUS loans for 2011-2012 at the Federal Direct Loan website after May 31, 2011.
Private Student Loans
Pomona College does not have a list of preferred private lenders. The following list is a list of all the private loan providers that have made loans to Pomona students in the past five years.