Loans

OVERVIEW

Loans provide an opportunity for famlies to spread out college costs over a repayment period. Most student loans provide an opportunity for deferment of principal payment until after graduation or until the student ceases to be enrolled at least half time in a degree-seeking program. Most parent loans require payment while the student is in college.

More information is available in the Student Loan Counseling section of this website.

APPLICATION PROCESSES

The application procedures vary according to the type of loan program. More information is available at each loan program web page.

The Federal Perkins Loan, Federal Health Professions Loan, and Purdue University Loans are awarded by the Division of Financial Aid; you are automatically considered for these programs by filing the Free Application for Federal Student Aid (FAFSA) by March 1 of the year you will be attending Purdue. You will receive promissory notes for these loans from the University Collections Office if you receive an award.

The application process for Federal Stafford Loans requires you to file the FAFSA and complete a request form after the Division of Financial Aid determines your eligibility.

Though you are not required to file the FAFSA for Federal Parent PLUS Loans or Private Alternative Loans, you are encouraged to do so first to allow the Division of Financial Aid to determine your eligibility for other loan programs as well as other sources of aid.

A WORD ABOUT DEFAULT

When you accept a student loan, you also undertake the obligation to repay it. This is a serious obligation, as you may not iunclude student loan debt should you ever file bankruptcy.

Contrary to popular belief, default on a student loan is not ignored by colleges, banks, or the government. Default on student loans will affect your credit rating. Extended default eventually can lead to prosecution. Whatever your circumstances, don't default! Lenders would rather work with you if you are finding it difficult to repay and can offer alternatives rather than have you in default.

A WORD ABOUT ENCUMBRANCES

Encumbrances placed on the student's records by the University before the beginning date of the loan period will prohibit processing of a loan application. It is a student's responsibility to clear the encumbrance and notify the Division of Financial Aid. If unable to repay the sncumbrance in full, a student must work with the office who placed the encumbrance to possibly make payment arrangements.