Student loans are designed to help you pay for tuition, books, and living expenses. Loans must be paid back, and they accrue interest over time.
Federal Perkins Loan
The Federal Perkins Loan is a need-based, low interest (5%) fixed rate loan typically made to first-year undergraduate students. Due to changes in the regulatory process, after September 30, 2015, Vermont Tech may only make new Perkins loans to students who meet strict grandfathering provisions. Check with the Office of Financial Aid to see if you meet those provisions.
The standard repayment period is 10 years. There are no processing fees. Funds are limited; levels are based on repayments from previous borrowers. No interest accrues and no repayment is expected while a student is enrolled in an institution of higher education at least half-time and for nine months thereafter.
Federal Perkins Loans borrowed by VTC students are serviced by ECSI.
What does this mean?
VTC has contracted with ECSI to assist in the administration and billing of VTC and Federal Perkins Loans. ECSI acts on behalf of the Vermont Technical College for the billing and repayment of your student loans. As an agent for VTC, ECSI will assist you in meeting your repayment obligation for your student loan(s). Monitor your Federal Perkins Loan online by clicking here.
Payments, correspondence and questions may be directed to:
100 Global View Drive, Suite 800
Warrendale, PA 15086
FEDERAL PERKINS LOAN PROGRAM TO END
New Federal Perkins Program regulations were made law on December 18, 2015. A link to guidance from the Department of Education regarding the regulations may be found at the bottom of the Federal Perkins Loan Disclosure link in the next sentence. Disclosures regarding any new Federal Perkins Loan made after October 1, 2015 may be found on this link for FEDERAL PERKINS LOAN DISCLOSURE.
Federal Direct Loans
Through the Federal Direct Lending Program, borrowers receive federal loan funds directly from the U.S. Department of Education. There are two types of Federal Direct Loans:
- Subsidized: The federal government pays the interest on this loan while the student is enrolled at least half-time or during times of authorized deferment. Direct Subsidized Loans are awarded based on federal financial need and grade level. NEW - effective for subsidized loans disbursed on or after July 1, 2012 and before July 1, 2014: the government will no longer pay the interest during the six month grace period.
- Unsubsidized: Students are responsible for paying the interest that accumulates after the loan has disbursed. The interest can be paid while in school or the accrued interest will be capitalized (added to the principal balance). Unsubsidized Stafford Loans are awarded based on grade level, and financial need is not considered.
- Effective on July 1, 2015 the interest rate for both Subsidized and Unsubsidized loans is fixed at 4.29%.
- A fee of 1.051% is deducted from the loan amount at every disbursement.
- Repayment begins six months from the date of graduation, full withdrawal or enrollment less than half-time.
- There is no pre-payment penalty.
- 150% Loan Limit Rule –Beginning July 1st, 2013, any first time borrower, (which is defined as someone who has either never borrowed a federal student loan previously, or has borrowed previously but currently has a zero balance), will only be able to borrow federal direct subsidized loans for a maximum of 150% of the published program length in which he/she is enrolled. Once a student reaches the 150% mark, he/she will not be able to borrow further subsidized loans, however he/she may be eligible for unsubsidized loans. Additionally, those subsidized loans that had been borrowed up to the 150% point will lose further government subsidy and interest on these loans will begin to accrue. From the 150% point forward, these subsidized loans will become unsubsidized loans. For example, if the published length of a program is the equivalent of four years, a student may borrow subsidized loans for the equivalent of six years while in the same program, if all other eligibility requirements are met.
- New Direct Loan Borrowers at Vermont Tech must complete a Master Promissory Note (MPN) and Entrance Counseling online at www.StudentLoans.gov. Instructions for student borrowers can be found here.
Federal Direct Parent PLUS Loan
The Federal Direct Parent PLUS Loan Program provides a borrowing option for parents of dependent undergraduate students to help finance their student's education. The maximum amount a parent can borrow is the cost of attendance less other sources of financial aid. The student's award letter will indicate the maximum amount eligible. This amount can be reduced or declined; no parent is required to borrow a Federal Direct PLUS Loan.
The funds are borrowed directly from the U.S. Department of Education. This is a credit based loan. As of 07/01/2015, the interest rate is fixed at 6.84%, and there is a 4.2920% fee deducted from every disbursement. Interest accrues from the first date of disbursement. Repayment begins after the loan is fully disbursed; however, deferment options are available to delay repayment. There is no pre-payment penalty.
To borrow through the Federal Direct PLUS Loan program the parent must pass a credit check, which is valid for 90 days. Parents without adverse credit will be approved for the loan. Adverse credit is defined by regulation as: 90 days or more delinquent on any debt or having a credit report that shows a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of a Title IV debt, during the five years preceding the date of the credit report. Parents denied a Federal Direct PLUS Loan will be offered the option to appeal or apply with a credit-approved endorser. Please see below for upcoming changes to the regulations on adverse credit history.
NEW: On March 29, 2015, the new Direct PLUS Loan regulations on adverse credit history will be implemented. The new regulations provide that a PLUS loan applicant has an adverse credit history if, in addition to other conditions (e.g. bankruptcy, foreclosure, tax lien, or a default determination), the applicant has one or more debts that are 90 or more days delinquent or that are in collection or have been charged off during the two years preceding the date of the applicant's credit report, but only if the total combined outstanding balance of those debts is greater than $2,085. Special loan counseling will also be required for any PLUS Loan applicant who has an adverse credit history but who qualifies for a PLUS Loan through the process for reconsideration due to extenuating circumstances or by obtaining an endorser for the loan. While the counseling is mandatory only for these borrowers, the Department of Education will offer voluntary counseling for all PLUS Loan borrowers.
NOTE: If parents are denied the PLUS, students may opt to borrow additional unsubsidized loan eligibility between $4000 and $5000 depending on grade level.
Parents intending to borrow a PLUS Loan will need to complete a paper application available on the Forms page; then submit it by either mail or fax to the Financial Aid Office. The parent will also need to complete a Master Promissory Note (MPN) online at www.StudentLoans.gov. Instructions for parent borrowers can be found here. In subsequent years, only the PLUS Application will need to be completed. The MPN is valid for 10 years after a loan has been issued from it.