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. 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. Access ECSI online by clicking here.
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:
181 Montour Run Road
Coraopolis, PA 15108
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, 2014 the interest rate for both Subsidized and Unsubsidized loans is fixed at 4.66%.
- 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. The interest rate is fixed at 7.21%, and there is a 4.204% 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.
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 & Worksheets 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.
Private (Alternative) Education Loans
You should always use any federal loan eligibility available to you before borrowing a private education loan.
Private loans are non-federal, credit-based education loans, borrowed from a private lending institution that must be repaid. The loans are typically issued in the student's name with a required co-signer. The maximum amount a student may borrow is the cost of attendance minus any other financial aid or the maximum limit established by the lender. Families are encouraged to fully explore federal loan options, (e.g. Perkins, Direct Subsidized, Direct Unsubsidized, and Direct PLUS Loans), before securing a private loan due to the benefits and consistencies that the federal loan programs provide. Funds are posted to the student's account each semester following enrollment verification, which generally occurs after the second week of the semester.
Selecting a private education loan and lender is a personal decision. The Office of Financial Aid strongly recommends researching private education loans and lenders before completing a loan application online or signing any loan paperwork. Research should include: a comparison of interest rates, fees, repayment terms, and the level of customer service provided by the lender.
Student Lending Analytics is a non-profit company and provides information as well as tools that may help you choose a private loan lender.
FinAid.org also provides detailed information regarding private loan options.