Student Loan FAQs

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General Questions

1. What are the different need-based student loans available?
2. What loans are available for parents?
3. What loans are available if my family did not qualify for any need-based assistance?
4. What type of alternative loans does Northwestern recommend?
5. How do I know that my loan has been processed?
6. Why hasn't my loan been processed?
7. Why was my loan reduced?
8. Why hasn't my loan come in?
9. What fees apply to each program?
10. How do I get my student loan money?

NU Loan Questions

1. I want to apply for an NU Loan. How do I apply?
2. I am unable/do not want to complete the NU Loan application online. Are paper applications available?
3. If I do not accept my NU Loan now, but change my mind later, can I still get it?
4. What if my NU Loan is not approved? What will I do then?

Federal Loan Questions

1. What is a Stafford loan?
2. What is the interest rate on the Stafford loan?
3. What is a Perkins loan?
4. What is the interest rate on the Perkins loan?
5. I'm trying to fill out my Stafford Loan Application, but I can't figure out where I should put the amount I want to borrow. Aren't I supposed to indicate that somewhere?
6. Where do I send my application?
7. What are Entrance and Exit Interviews?
8. If I do not accept my Stafford loan offer now, but change my mind later, can I still get it?
9. If I do not accept my Perkins Loan offer now, but change my mind later, can I still get it?

Federal Direct Loan Questions

1. What is the Direct Loan Program and who is the lender?
2. If I borrowed a federal Stafford, PLUS through the FFELP program in the past, will I have to repay two different lenders now?
3. Where can I find information about who services my other federal loans?
4. Do I have to complete another Master Promissory Note?
5. How and when do I complete a Direct Loan Master Promissory Note (MPN)?
6. What are the interest rate and fees charged in Direct Loans?
7. Will the Stafford Loans I borrowed through my bank or lender in prior years still be deferred?
8. How do I apply for a Parent PLUS loan?
9. How are the Direct Loan repayment options?
10. Does Direct Loans offer in-school deferment to the Stafford Loan and Parent PLUS Loan borrowers?
11. Does Direct Loans offer an extended repayment plan?
12. How does Direct Loan Servicing capitalize interest?
13. How do I contact Direct Loan Customer Service?

General Questions

1. What are the different need-based student loans available?
The federal loan programs (Stafford and Perkins) are frequently used in helping to create a financial aid package. Northwestern will consider a student's eligibility for either one or both programs. For more information on available loan programs, see the section on Student Loans. More information on federal loan programs can also be found on the U.S. Department of Education website.

2. What loans are available for parents?
Parents can choose the federal PLUS Loan or the NU Loan. These loans can be used to help with the annual family contribution. The federal PLUS loan has a fixed interest rate of 7.9% and the lender will charge an origination fee of 4.0%. Rates for the NU Loan is variable and change each summer. The NU Loan does not assess an application fee for applications submitted online through the OWLS system.  Families must reapply for these loans each academic year and have approved credit.  PLUS applicants must also complete a FAFSA.

3. What loans are available if my family did not qualify for any need-based assistance?
Families can choose to borrow the Unsubsidized Stafford Loan and/or the NU Loan or PLUS loans.

4. What type of alternative loans does Northwestern recommend?
Some families are unable to finance their contribution with the various loans mentioned above. It can, at times, be necessary for either a parent or student to borrow through an alternative loan program. Alternative loans are through private lenders and may be helpful for students looking to cover such things as past-due balances and the family contribution. While Northwestern does not necessarily "recommend" specific lenders, it will supply a family with lenders that previous students have found success with. Please contact a counselor in the Financial Aid Office for details.

5. How do I know that my loan has been processed?
If you have applied for a Federal Stafford Loan or a Federal PLUS loan, a Notice of Guarantee will be sent to your permanent address when the loan has been guaranteed. When a Federal Perkins Loan is ready to be processed, an email will be sent to your Northwestern email account from Campus Partners. Upon approval of the NU Loan, an email will be sent to the parents or co-signers for electronic signatures. Students may always contact the Office of Undergraduate Financial Aid to inquire about the status of their loans.

6. Why hasn't my loan been processed?
A loan may not have been processed for the following reasons:
The Department of Education does no have a completed loan application (MPN) and/or entrance interview
You were selected for verification and we cannot process the loan until verification has been completed.
We are waiting for your official federal data to come in from the Central Processor.

You are enouraged to check your To Do List on CAESAR for more information or contact our office to speak with a financial aid counselor.

7. Why was my loan reduced?
A loan may be reduced for one of the following reasons:
You received an outside scholarship.
You did not have enough credits to receive the original Stafford Loan offer.
After you received your original award, our office was informed that you are a Community Assistant (CA).

8. Why hasn't my loan come in?
If three weeks have elapsed and funds have not come in for a loan that was processed electronically, please check with the Office of Undergraduate Financial Aid.

9. What fees apply to each program?
For Federal Stafford Loans an origination fee of 1.0% will apply and for Federal PLUS Loans, a 4.0% origination fee will be deducted proportionately from each disbursement. There is no fee for NU Loan applications submitted online through the OWLS system. No fee is charged for the Federal Perkins Loan, either.

10. How do I get my student loan money?
Funds for the Federal Perkins Loan and the NU Loan are applied directly to the student's billing account once all application materials and promissory notes are completed. Students must complete the Perkins Loan Application, Entrance Interview and Master Promissory Note on the iPROMise website. Promissory note information for the NU Loan is emailed to parents (or co-signers) with instructions to sign, have the student sign, and submit to the Student Loan Office.

Federal Stafford Loans and Federal PLUS Loans are disbursed by electronic funds transfer (EFT).  The funds must first be applied to the billing account regardless of whether or not the account is currently carrying a balance due.  If the loan proceeds create a credit balance the student may request those funds from the Office of Student Accounts once the disbursement has been applied.

The same procedure applies to Federal PLUS Loans received by EFT. However.  If the PLUS funds creates a credit balance, the parent borrower can indicate whether the credit should remain on the bills or be issued to themselves.

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NU Loan Questions

1. I want to apply for an NU Loan. How do I apply?
The student can initiate the process by logging in to OWLS (Online Web Loan System) via CAESAR (For Students > Financial Services > NU Loan Application > OWLS) to complete the NU Loan application online.  Once the student initiated the process, an email will be sent to the parent borrower to complete the application process.  For more information regarding the application procedures, please consult the Student Financial Services website.

2. I am unable/do not want to complete the NU Loan application online. Are paper applications available?
Paper applications for the NU Loan will be available upon request from the Student Loan Office.

3. If I do not accept my NU Loan now, but change my mind later, can I still get it?
You may apply for the winter and spring quarter portions of the NU Loan offer so long as you have not already paid your student's full tuition bill for the quarter. The Student Loan Office determines final approval of all NU Loan offers.

4. What if my NU Loan is not approved? What will I do then?
If your NU Loan is denied, then the Office of Undergraduate Financial Aid can help you explore other financing options with you at that time.

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Federal Loan Questions

1. What is a Stafford loan?
Stafford loans come in two forms - subsidized and unsubsidized. With a subsidized Stafford loan (which is considered need-based), the interest does not accrue while the student is in school because the government pays the interest on the student's behalf. In addition, there is a six month grace period after the student leaves the institution during which interest does not accrue (please note that beginning July 1, 2012 all new subsidized Stafford loans will no longer be eligible for the interest grace subsidy period.  All loans received prior will maintain the grace period benefit.). An unsubsidized Stafford loan means that the interest starts accruing immediately upon disbursement, and the student has the option of making interest payments while in school, or deferring the interest and paying back both the principle and the accrued interest after the grace period. The Stafford loans are entirely in the student's name. The University uses federal guidelines to determine eligibility for the subsidized Stafford loan program. If a student or family would like to inquire about unsubsidized eligibility, they can contact a counselor in the Office of Undergraduate Financial Aid.

2. What is the interest rate on the Stafford loan?
The Stafford has a fixed interest rate of 6.8% for the Subsidized Federal Stafford Loan and 6.8% for Unsubsidized Federal Stafford Loan

3. What is a Perkins loan?
For students with additional need, a Perkins loan may be added to the package. This loan, which is only offered in a subsidized program, does not accrue interest until nine months after the student leaves the institution. Perkins loan money is in limited supply and is awarded at the discretion of the Office of Undergraduate Financial Aid.

4. What is the interest rate on the Perkins loan?
The interest rate is set at a fixed (constant) 5%.

5. I'm trying to fill out my Stafford Loan Application, but I can't figure out where I should put the amount I want to borrow. Aren't I supposed to indicate that somewhere?
No. The Federal Stafford Master Promissory Note (MPN) is a multi-year document. You do not need to indicate either the amount you are borrowing or the loan period, because this form will also serve as your promissory note for future loans. We will process your Stafford Loan for the amount that you are offered on your Financial Aid Award unless you reduce or reject the loan. If you wish to borrow a lesser amount you should notify us. If your Stafford eligibility increases over the course of the academic year, you will be required to confirm your acceptance of the additional loan offer before we will process the loan.

6. Where do I send my application?
The Federal Stafford Loan MPN and the PLUS Loan MPN should be completed online via the Department of Education website www.studentloans.gov. The Perkins Loan application process is completed online through iPROMise. Once you have indicated to our office that you wish to borrow from the Perkins loan program you will be sent instructions on how to complete the Perkins Loan Application, Total Loan Indebtedness Disclosure, the Master Promissory Note and the Perkins Loan Entrance Interview. These instructions will be sent to you via your Northwestern e-mail account from Campus Partners within two weeks of your acceptance of the Perkins Loan. NU Loan applications are to be completed online through the OWLS system via CAESAR (For Students > Financial Services > NU Loan Application > OWLS).

7. What are Entrance and Exit Interviews?
Entrance and Exit interviews are federally required sessions that each student with a Federal Stafford and/or Perkins Loan is required to complete in order to receive information concerning borrowers' rights and responsibilities. Information will be provided concerning repayment, defaulting, and deferments. The Entrance Interview must be completed before loan funds can be delivered to the student. The Exit Interview must be completed before the student leaves the University. Entrance Interviews for new Stafford borrowers are done online. Entrance Interviews for new Perkins borrowers are also completed online via iPROMise. Exit Interviews are handled by Student Financial Services. More information regarding Entrance Interviews can be found at the Stafford or Perkins Loan web pages.

8. If I do not accept my Stafford loan offer now, but change my mind later, can I still get it?
Yes.  If you are still enrolled, we can still process the loan for you.

9. If I do not accept my Perkins Loan offer now, but change my mind later, can I still get it?
Only if funds are still available.

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Federal Direct Loan Questions

1.  What is the Direct Loan Program and who is the lender?
Direct loans are funded through the U.S. Department of Education using funds obtained from the U.S. Treasury. This program offers students and parents one point of contact because the loans are made, funded and backed by the U.S. Department of Education. 

2.  If I borrowed a Federal Stafford, PLUS Loan through the FFELP program in the past, will I have to repay two different lenders now?

Yes.  You will likely be repaying your federal loans to different servicers.  One or more servicers will be associated with the federal FFELP loans you received at NU prior to the 2010-11 academic year and your Direct Loan will have a servicer as well. You will receive correspondence and payment information from both the Department of Education and your prior lender or servicer. 

After graduation you have a choice to make individual payments to your previous lender(s) and to the U.S. Department of Education for your Direct Loans, or you can consolidate your loans into one payment with the U.S. Department of Education.  For more information regarding Loan Consolidation please visit the U.S. Department of Education's website at http://loanconsolidation.ed.gov.

3.  Where can I find information to whom I will be repaying my federal loans?
Information on all your federal loan debt can be accessed via the National Student Loan Data System (NSLDS) at http://www.nslds.ed.gov. Note that any private (alternative) loans you have borrowed will not appear in the NSLDS.  Direct Loan borrowers are assigned a loan servicer after the first disbursement of their loan. Your loan servicer will contact you directly after you receive your first disbursement. You should contact your loan servicer with questions about repayment.

4.  Do I have to complete another Master Promissory Note?
You will need to complete a Direct Loan Master Promissory Note (MPN) if you have not borrowed before or you did not received a Stafford Loan during the last academic year. You will need to have your Federal PIN number that was used to complete your FAFSA in order to electronically sign the MPN.

5.  How and when do I complete a Direct Loan Master Promissory Note (MPN)?
The MPN can be completed at www.studentloans.ed.gov.  Additional instructions on how to complete a Direct Loan Master Promissory Note (MPN) is available on our Stafford Loan Application Instructions page.  If you are going to borrow a PLUS loan, please wait until you have received your financial aid offer to complete this process.  The award letter will be necessary to help you determine the amount you need to request.  The PLUS loan requires a credit approval and the approval is only valid for 90 days, therefore families should not apply until mid-June.

6.  What are the interest rate and fees charged in Direct Loans?

Interest rates and fees for 2012-2013 are: 

Direct Loan Program

	Interest	Fees*
Subsidized Federal Direct Loan	6.8%	1.0%
Unsubsidized Federal Direct Loan	6.8%	1.0%
Federal Direct PLUS or Graduate PLUS Loan	7.9%	2.5%

*Direct Loan Fee: The Subsidized and Unsubsidized Federal Direct Loans have a 1.0% origination fee.

The Federal Direct PLUS Loan has a 4% origination fee.

7.  Will the Stafford Loans I borrowed through my bank or lender in a prior year still be deferred?
As long as you are enrolled in school on at least a half-time basis, your prior year federal loans will continue to be deferred.  Enrollment information is reported to lenders by the school on a regular basis.

8.  How do I apply for a Parent PLUS loan?

You will need to complete a Parent PLUS MPN and Parent PLUS Request at the Department of Education's website www.studentloans.gov. Under the Federal Direct PLUS loan program parents may borrow up to the full cost of their student's education minus other financial aid received.  A credit check is required.

Families are required to complete a Free Application for Federal Student Aid (FAFSA) before a PLUS Loan can be processed.

If you are planning to borrow a PLUS loan and you have applied for other aid, please wait until you have received your financial aid offer to complete this process.  The award letter will be necessary to help you determine the amount you need to request.   Families should not apply for a PLUS Loan earlier than mid-June since the PLUS loan requires a credit approval which is only valid for 90 days.

9.  What are the Direct Loan repayment options?

There are five repayment options available for Direct Loans:

• Standard
• Extended
• Graduated
• Income Contingent Repayment
• Income-Based Repayment