Loan Programs

Explore the range of options available for educational borrowing to finance a college education thoughtfully. From federal loans with competitive interest rates and flexible repayment plans to private loans tailored to specific needs, understanding these financing tools is crucial. Below is a list of loan terminology that helps navigate borrowing decisions effectively and achieve academic goals while maintaining financial stability.

Disbursement/Disbursed Payment of federal student aid funds to the borrower by the school.	Lender The organization that made the loan initially; the lender could be the borrower’s school; a bank, a credit union, or other lending institutions; or the U.S. Department of Education.
Entrance Counseling A mandatory information session that takes place before you receive your first federal student loan that explains your responsibilities and rights as a student borrower.	Origination Fee A fee charged by a lender on entering into a loan agreement to cover the cost of processing the loan. Origination fees are assessed upfront and reduce the amount paid-out for your loan.
Exit Counseling A mandatory information session that takes place right before you graduate or drop below half-time enrollment that explains your loan repayment responsibilities and when repayment begins.	Promissory Note/Master Promissory Note/MPN A binding legal document that you must sign when you get a loan. The MPN lists the terms and conditions under which you agree to repay the loan and explains your rights and responsibilities as a borrower.
Grace Period For certain types of loans, a period of time after you graduate, leave school, or drop below half-time enrollment when you are not required to make payments.	Subsidized A loan based on financial need for which the federal government pays the interest that accrues while the borrower is in-school, grace, or deferment status, and during certain periods of repayment under certain income-driven repayment plans.
Interest A loan expense charged for the use of borrowed money. Interest is paid by a borrower to a lender. The expense is calculated as a percentage of the unpaid principal amount of the loan.	Unsubsidized A loan for which the borrower is fully responsible for paying the interest regardless of the loan status. Interest on unsubsidized loans accrues from the date of disbursement and continues throughout the life of the loan.
Interest Rate The percentage at which interest is calculated on your loan(s). Lower interest rates are always better.

Federal Student Loans

Learn the distinctions between the Subsidized and Unsubsidized loans to understand their financial implications and eligibility criteria. Whether you're a prospective student or planning your educational financing, clarity on these options will guide your decision-making process effectively.

Similarities

Interest Rate: Both Subsidized and Unsubsidized Loans have a fixed interest rate of 6.53%.
Origination Fee: Both loans have a 1.057% origination fee.
Payment & Processing: Both loan types are funded by the Department of Education and processed by Pitzer College.
Repayment: Repayment for both loans begins 6 months after graduation.

Differences

Financial Need: Subsidized loans are awarded based on financial need, while unsubsidized loans are available to eligible students regardless of need.
Interest Accrual: Subsidized loans do not accrue interest while the student is enrolled at least half-time, whereas Unsubsidized loans start accruing interest immediately.

To ensure Federal Direct Loan funds are disbursed to your Student Account, complete the following steps before the semester begins. Use your FSA ID and password to log in to Federal Student Aid (FSA) websites. The student, not the parent, must complete all required loan documents using their FSA ID and password.

First-time Borrowers

Submit the FAFSA online (if not done already).
Complete the Master Promissory Note on the Federal Student Aid website. Navigate to the "Complete Loan Agreement (Master Promissory Note)" link under the "In School" tab.
Complete Entrance Counseling on the Federal Student Aid website. Navigate to the "Complete Entrance Counseling" link under the "In School" tab.
Complete Pitzer's Self-Help Agreement. Read and initial where required.

Returning Borrowers

Submit the FAFSA online (if not done already).
Complete the Self-Help Agreement. Read and initial where required.

The Department of Education sets annual and lifetime borrowing limits to prevent overborrowing, based on the student's grade level and dependency status on the FAFSA. Dependent students whose parents are unable to obtain a Parent PLUS Loan have the same borrowing limits as independent students.

Annual Borrowing Caps

Students have a combined maximum borrowing limit for Subsidized and Unsubsidized loan programs. Only a portion of the yearly total listed below can be subsidized for those who qualify. Students who do not qualify for subsidized loans can borrow the full amount as Unsubsidized loan funds.

Grade Level	Dependency Status	Total	Subsidized Maximum
First-Year	Dependent	$5,500	$3,500
	Independent	$9,500	$3,500
Second-Year	Dependent	$6,500	$4,500
	Independent	$10,500	$4,500
Third & Fourth-year	Dependent	$7,500	$5,500
	Independent	$12,500	$5,500

Lifetime Loan Cap

Lifetime borrowing caps are determined by both dependency status and the maximum allowable amount for subsidized loans. These caps ensure that the total amount borrowed does not exceed specific limits, with a portion of that total restricted to subsidized loans for eligible students.

Dependency Status	Subsidized Maximum	Total Maximum
Dependent Students	$23,000	$31,000
Independent Students	$23,000	$57,500

All students who borrow through the Federal Direct Loan Program must complete exit counseling.

Graduating Seniors: Complete exit counseling in April of senior year. Failure to do so may result in a cap and gown hold.
Students Withdrawing or Taking a Leave of Absence: Complete exit counseling before leaving. The Office of Financial Aid will notify students of this requirement upon learning of their withdrawal or leave.

Federal Direct Subsidized/Unsubsidized Borrowers: Complete exit counseling online on the Federal Student Aid website.

Loan Summary

Visit Federal Student Aid and go to "My Aid" to view federal aid history and lender contact information. The U.S. Department of Education assigns each loan to a servicer who will manage the payments.

Repayment Plans

Students generally have between 10 to 25 years to repay their loans, depending on the chosen repayment plan. The federal government offers several repayment plans. For more information, visit the Federal Student Aid website for all repayment plan options.

Repayment Timeline: Repayment on Federal Direct Loans begins six months after graduating from Pitzer or ceasing to be enrolled at least half-time.

Available Resources

Download this helpful Student Information Sheet for essential details on loan repayment options and other key information.

Direct Loan Exit Counseling Guide	Student Loan Repayment Plans
Manage Loans – Federal Student Aid	What are loan deferment and forbearance?
Income-Driven Repayment Plans	Student Loan Deferment
Annual Credit Report	Student Loan Forbearance
Avoiding Student Aid Scams	Consumerfinance.gov

Federal Parent PLUS Loan

Financing a Pitzer education can involve deferring some costs through loan programs. Here’s a guide to help navigate the borrowing options:

Eligibility: Biological or adoptive parent (or in some cases, the stepparent) of a dependent undergraduate student enrolled at least half-time at an eligible school. Grandparents and other relatives are not eligible. Multiple parents can complete and pass separate credit checks, if necessary.
Credit Check: Must be able to pass credit check and not have an adverse credit history
Borrowing Limit: Up to the full cost of attendance minus any financial aid awarded to student.
Interest Rate: Fixed at 9.08% for the 2024-25 academic year.
Origination Fee: 4.228% for loans paid before October 1, 2024.
Interest Accrual: Begins immediately upon disbursement.
Repayment: Starts after the second loan disbursement, usually 60 days after the spring disbursement, but can be deferred until the student graduates or is no longer enrolled at least half-time.

Navigating student loans is essential when financing higher education. It's essential to determine exact borrowing needs carefully to minimize debt. Borrow only what is necessary to cover direct educational expenses and limit borrowing for indirect costs. Here are a few tips:

Maximize Student Loans: Student loans often have lower interest rates. We highly encourage families to maximize Federal Student Loan programs before borrowing through the Parent PLUS Loan.
Direct Educational Expenses: Borrow only what is needed for direct educational expenses each semester. Review the student’s bill for guidance on how much to borrow. Our financial aid team is also available to assist in determining the appropriate loan amount.
Origination Fees: Account for these fees when deciding how much to borrow. For example, borrowing $20,000 results in $845 in fees, with $19,155 disbursed to the student’s account.

Parents should apply for the PLUS Loan in July to avoid credit check expiration. Pitzer processes PLUS Loan applications within 24 hours and will notify parents if more information is needed. Parents must use their own FSA ID and password to complete the application on the Federal Student Aid website.

First-time Borrowers

Complete the Free Application for Federal Student Aid (FAFSA), if not done so already. Pitzer’s federal school code is 001172.
Apply for a PLUS Loan (online) through the Federal Student Aid website.
Complete a Master Promissory Note for a Parent PLUS Loan (online) through the Federal Student Aid website.
Complete the 2024-25 Direct PLUS Loan Request form. Pitzer's office will send this after receiving and reviewing the application.

Continuing Borrowers

Complete the Free Application for Federal Student Aid (FAFSA), if not done so already. Pitzer’s federal school code is 001172.
Apply for a PLUS Loan (online) through the Federal Student Aid website.
Complete the 2024-25 Direct PLUS Loan Request form. Pitzer's office will send this after receiving and reviewing the application.

If parents are denied a PLUS Loan due to their credit history, several alternative options are available to help ensure students can still receive the necessary financial support for their education. Parents can explore the following solutions to address a PLUS Loan denial:

Appeal: Contact the Direct Loan Servicing Center at 1-800-557-7394 to appeal the credit decision.
Endorser: Secure an endorser willing to co-sign the PLUS Loan.
Additional Unsubsidized Loan: The student can borrow an additional $4,000 in an Unsubsidized Loan due to the PLUS Loan denial.

Alternative Loans

Alternative loans, also known as private loans, provide additional financial support beyond federal aid to bridge the gap between the cost of attendance and the student's financial aid package. However, they should only be considered after exploring all other forms of financial aid.

Eligibility Requirements

To qualify for federal and private loans, students must be U.S. Citizens or Eligible Non-Citizens and enrolled at least half-time. Students with limited credit history or low credit scores may need a co-borrower. International students can apply for alternative loans with a creditworthy co-borrower who is a U.S. Citizen or Eligible Non-Citizen.

Federal Direct Loans vs. Private Loans

Federal loan programs generally provide more favorable repayment terms than private loans, including options such as Federal Direct Consolidation Loans, Federal Income-Based Repayment Plans, and Economic Hardship deferments, which are not available for private loans.

Federal Direct Student Loans offer a fixed interest rate of 6.53% for both subsidized and unsubsidized loans, along with an origination fee of up to 1.057%. These loans are accessible to all eligible students enrolled at least half-time, who should exhaust their federal loan options before turning to private loans.

Loan Terms and Conditions

Interest rates, origination fees, and repayment terms for private loans vary widely and are determined by the lender. Most private lenders require a co-borrower, and interest rates are based on the creditworthiness of the borrower and/or co-borrower. Interest rates can fluctuate monthly or quarterly, and there may not be a maximum cap on interest rates.

Choosing an alternative lender is an important decision that impacts your entire loan duration. Consider the following before choosing a lender:

Repayment Variability: Rules for repayment differ among lenders, with repayment typically starting after full disbursement.
Consider Deferment Options: Some lenders offer deferment during at least half-time enrollment and economic hardship, though interest accrues from the disbursement date.
Compare Interest Rates: Rates amongst lenders will vary. Compare interest rates as well as other fees, terms, and conditions associated with the loan.
Use Comparison Tools: Utilize tools like FASTChoice and Sparrow to compare private loan terms and rates before making your decision.

FASTChoice

FASTChoice enables you to compare private loan terms and rates directly, providing the opportunity to review loan options before proceeding with an application. Once you've selected your preferred lender, you can seamlessly complete the application process. FASTChoice presents unbiased, comprehensive information, allowing you to choose any participating lender or program without preference towards any specific lender.

Sparrow

Use Sparrow after submitting your credit application to compare loans. Sparrow allows students and co-signers to submit one application, which automatically finds the best offers from a network of lenders. You can select your lender after reviewing all interest rate options, eliminating the need for additional applications. Sparrow's lenders are chosen based on data analysis to offer the most competitive rates available.

Contact the Office of Financial Aid to ensure you have exhausted all federal loan options. Students can reach us via email at financial_aid@vbj4.com or by phone at 909.621.8208 for personalized assistance. Here's a step-by-step guide to completing your loan process:

Choose a lender and apply online. If you need guidance in selecting a lender, visit FASTChoice or Sparrow for assistance.
Complete all required paperwork with the lender. Pitzer will receive information needed to certify your loan.
After certification, allow a few days for our office to process and disburse your loan funds to your student account.

Please note, Pitzer College and its staff do not receive any benefits or compensation from FASTChoice (Great Lakes Education Loan Services, Inc.) or Sparrow for providing these resources or from any lenders listed. Review our Financial Aid Code of Conduct and Policy on Educational Loans on our website's Policies section for more information.