Financial Aid Loans:: Types of Loans

Financial aid can include various loan programs. There are several types of student loans: federal, state and private. Unlike scholarships and grants, a loan is borrowed money that must be paid back with interest. If you decide to take out a loan, make sure you understand the terms and conditions.

Federal Student Loans

Loans made by the Federal Government usually offer borrowers lower interest rates and have more flexible repayment options. If students want to pursue loan(s) offered through the Department of Education, they must be enrolled in at least six credit hours that count towards a degree program, complete entrance counseling, and sign a Master Promissory Note (MPN) for the appropriate loan type at in order for this type of funding to disburse to their student account.

Please note: If an individual completes entrance counseling and an MPN on a student’s behalf or if a student completes the wrong entrance counseling or MPN, loan processing may be delayed. Additionally, parents of dependent students have the option of applying for a Parent Plus loan to assist their student with educational expenses.

Download the Federal Student Loan Comparison Sheet to see how federal loans differ from one another.

Federal Direct Loans are available to undergraduate and graduate students as well as parents of dependent undergraduate students.

Direct Subsidized and Unsubsidized Loans

Direct Parent PLUS Loans

Parent PLUS loans are unsubsidized federal loans that can be used to assist with educational expenses for dependent undergraduate students who are enrolled at least half time.

Beginning Fall 2021, the Parent PLUS loan will not be auto-awarded to dependent undergraduate students. If you were required to list parent information on your FAFSA and are in need of additional financial assistance, please discuss with your parent if he or she would like to apply for this loan. Applications can be completed by your parent at the Federal Student Aid PLUS loan site. Parents (borrowers) will begin the application, providing their information first and entering their student’s information later in the process. Once submitted, the application decision will be automatically sent to our office within 2-3 business days. Updates to your award package will occur in myLEO once an application has been received and processed. Additional requirements for this loan include a Parent Plus MPN for approved applications, and Plus Credit Counseling for applications approved with an endorser or credit appeal. As a parent, if you have chosen the endorser or appeal option and choose not to pursue an endorser or the appeal option, you will need to contact [email protected] to indicate the change in your decision before accounts can be updated and funds disbursed.

Loan funds are disbursed to the student’s account and applied to pay outstanding charges as needed. Parents may opt to have refunds issued directly to the student. Otherwise, the refund will go to the parent borrower. Please direct questions to the Office of Financial Aid and Scholarships at [email protected].

Private Education Loans

A private student loan is a nonfederal loan issued by a lender, such as a bank or credit union. A private loan must be repaid with interest. Private loan applications are completed with the lender and usually require a credit check. It is recommended that students and parents exhaust all federal student loan options before considering a private loan.

A&M-Commerce does not have contractual agreements with any private lender. As such, there are no preferred private lender lists, contracts or endorsements of private loans.

  • Interest rates, origination and repayment fees for this type of loan program are based on the creditworthiness of the borrower and/or co-borrower.
  • You can borrow up to the estimated cost of attendance at A&M-Commerce, including tuition, mandatory fees, room and board, books and supplies, and even transportation, less other aid received.
  • Undergraduates will generally need to apply with a credit-worthy co-borrower. Graduate students may obtain better rates by applying with a credit-worthy co-borrower.
  • Interest rates will vary on a monthly or quarterly basis and may not have a maximum rate. To reduce the cost of borrowing, consider making in-school interest or interest plus principal payments.
  • Repayment generally begins immediately after full disbursement. Some lenders may defer (postpone) repayment during periods of at least half-time enrollment and economic hardship. However, interest will accrue on the loan from the date it is disbursed. Rules for repayment and deferment vary from lender to lender. Check with your lender for more information.

Choosing a Private Loan

ELM Select for Students

The use of a lender listed on ELM Select is not required. A&M-Commerce will process loans from any eligible lender the student chooses. A&M-Commerce may not deny or otherwise impede the borrower’s choice of a lender or cause unnecessary delay in loan certification for borrowers who choose a lender not listed on ELM Select.

Questions to consider when choosing a private loan lender:

  • What is the interest rate? Is it fixed or variable?
  • What fees must be paid and when are they due?
  • What are the repayment terms? Is there a grace period? Are there deferment or forbearance options?
  • What will my monthly payment be?
  • Do I need to be admitted to a degree or certificate program?
  • Do I need to be enrolled at least half time?
  • If there a Satisfactory Academic Progress requirement do I meet the requirement?
  • Can the loan be applied to past periods of enrollment? If so, within what timeframe must students apply if they are still enrolled at A&M-Commerce? Within what timeframe must students apply if they have withdrawn or graduated from A&M-Commerce?

The Office of Financial Aid and Scholarships is happy to assist with your private education loan processes. Please be aware that school certifications of private education loans are not automatically completed by our office. Certification requests must be made by you, the student. The application cannot be completed for multiple award years. We want to make sure you are aware of the various federal and state financial aid programs before pursuing a private education loan.

You should contact our office when there is an approved private education loan that is pending school certification or if you have questions regarding a private education/alternative loan. Please send your inquiry or notice to [email protected]. A couple of points to remember:

  • If you haven’t already applied for federal and state financial aid, you’re encouraged to do so by completing the FAFSA/TASFA.
  • Once the FAFSA/TASFA has been received by A&M-Commerce and all necessary requirements are met, you may be awarded financial aid. We advise you to delay the application of a private education loan until you review your financial aid package.

Responsibilities of the Borrower

Upon certification and prior to disbursement of any private education loan, you will receive an email notifying you that certification is complete. The email includes a link to the self-certification form. This form is a requirement and, once completed, must be sent to your lender.

  1. Follow the instructions included in the self-certification form.
    In order to complete Section 2 of the form, you will need to access your A&M-Commerce cost of attendance and your estimated financial aid by following these instructions:
  2. Log into your myLEO account. Select the “Student Resources” tab. Select “Your Financial Aid.” Select the correct award/aid year from the menu on the top right. Select the “Award Offer” tab and scroll down to the third section with the header “Cost of Attendance.”
  3. Enter the total at the end of your “Cost of Attendance” (COA) breakdown on Section 2, Item A of the form (Example: a fall-only private loan would require you to provide the sum of the amounts for that term in each category).
  4. Below the “Cost of Attendance” section, add up the financial aid awards (“Grants and Scholarships to Pay for College”, “Work”, “Loans”, and “Other Resources”) you have received for the term of application and enter the total amount as your estimated financial assistance on Section 2, Item B of the form (Example: a fall-only private loan would require you to provide the fall-only term total amount). If you have applied for financial aid but have yet to receive awards, report $0. Please reach out to [email protected].
  5. Complete Section 2, Item C using the formula on the form.
  6. Complete Sections 3 and 4 and submit to the lender. Do not submit this form to Financial Aid and Scholarships.
  7. If you have any questions, please email [email protected].
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