Apply for a
Stafford Loan
Apply for a
Parent PLUS Loan
Apply for an
Alternative Loan
Undergraduate Loans
Educational Loans Overview
Many students find they must supplement the resources they have to meet the expenses associated with a quality college education through taking advantage of low interest educational loans. These loans differ from a personal loan or home equity loan in that the funds are to be used exclusively for college expenses. Students may borrow in funds under the Federal Stafford Loan Program, even if they have not established a credit record. Repayment on the Federal Stafford Loan is deferred as long as the student is enrolled in college at least half-time. If additional funds are needed, Alternative Educational loans are available from certain lenders.
Any questions you have regarding Undergraduate Educational Loans may be directed to Mrs. Betty Pennington, Staff Assistant, Office of Student Financial Planning at (731)-661-5405 or bpenning@uu.edu.
To apply for any of the following, all students follow the appropriate steps in How to Apply for Financial Assistance. Filing the FAFSA is also required for the Federal Stafford Loan.
The Federal Stafford Loan
The Federal Stafford Loan enables students who are enrolled at least half-time and degree seeking to borrow low interest loans. Payment on these loans begins six months after graduation or after a student is no longer enrolled at least half-time.
There are two types of Stafford Loans:
- Subsidized (need based) - Eligibility for a subsidized Stafford loan is based on the institutional cost of attendance budget, minus the expected family contribution (EFC) and any other financial aid awarded. The cost of attendance budget for awarding aid includes tuition, fees, room, board, books, and other miscellaneous expenses. The EFC is determined by your FAFSA results. Subsidized means the Federal government pays the interest on the loan while the student is enrolled at least half-time.
- Unsubsidized (non-need based) - Eligibility for an unsubsidized Stafford loan is based on the institutional cost of attendance budget minus any other financial aid awarded. An unsubsidized loan is available to students who do not qualify for a subsidized Stafford loan, or to supplement a subsidized Stafford loan. The Federal government does not pay the interest. The student borrower is responsible for all interest that accrues from the time the loan is disbursed until the loan is paid in full.
Stafford Undergraduate |
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Program of Study of at Least a Full Academic Year in Length |
Total Eligibility* |
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Dependent Students |
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| 1st Year Undergraduates | |||
| Base eligibility (subsidized and unsubsidized) | $3,500 |
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$5,500 |
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| Additional Unsubsidized eligibility | $2,000 |
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| 2nd Year Undergraduates | |||
| Base eligibility (subsidized and unsubsidized) | $4,500 |
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$6,500 |
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| Additional unsubsidized eligibility | $2,000 |
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| 3rd, 4th, & 5th Year Undergraduates | |||
| Base eligibility (subsidized and unsubsidized) | $5,500 |
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$7,500 |
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| Additional unsubsidized eligibility | $2,000 |
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Independent Students & Dependent Students Whose Parents Cannot Borrow a PLUS Loan |
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| 1st Year Undergraduates | |||
| Base eligibility (subsidized and unsubsidized) | $3,500 |
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$9,500 |
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| Additional unsubsidized eligibility | $6,000 |
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| 2nd Year Undergraduates | |||
| Base eligibility (subsidized and unsubsidized) | $4,500 |
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$10,500 |
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| Additional unsubsidized eligibility | $6,000 |
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| 3rd, 4th, & 5th Year Undergraduates | |||
| Base eligibility (subsidized and unsubsidized) | $5,500 |
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$12,500 |
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| Additional unsubsidized eligibility | $7,000 |
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| * The subsidized portion of this amount cannot exceed the base eligibility. | |||
The total debt you can have outstanding from all Stafford loans combined is:
- $31,000 as a dependent undergraduate student (only $23,000 of this amount may be in subsidized loans).
- $57,500 as an independent undergraduate student (only $23,000 of this amount may be in subsidized loans).
Students must file the Free Application for Federal Student Aid (FAFSA) each academic year to be eligible to apply for the Stafford Loan.
The College Cost Reduction and Access Act of 2007 gradually reduced the fixed interest rates on newly originated subsidized Stafford loans for undergraduate students to 6.0% (2008-09), 5.6% (2009-10), 4.5% (2010-11) and 3.4% (2011-12); however, the rate will return to 6.8% in 2012-13. These reductions are available only to undergraduate students, not graduate students, and only for subsidized Stafford loans, not unsubsidized Stafford loans. Unsubsidized Stafford loans remain at a fixed rate of 6.8%.
A Federal Stafford Loan Master Promissory Note (MPN) must be completed with the lender you select for your Stafford Loan. You will only need to complete this MPN the first time you apply for a loan at Union. The MPN is a Serial Note and good for up to 10 years. You are able to E-Sign this MPN using Union's Online Lender List.
Your Lender will send you a Notice of Loan Guarantee with your loan amounts, anticipated loan disbursement dates, and your loan award period. Lender and/or guarantee agency fees may be deducted from the disbursement amount. Loan funds are normally disbursed in equal installments. Loan funds are credited to the student's account within 3 days after the funds are received and the student has met all federal requirements. If a student is due a credit balance check, it may be picked up within 14 days after the credit occurs at Union Station on the Jackson campus(for Jackson students) or in Room 105 on the Germantown campus (for Germantown students). See our Schedule of Loan Refund Dates.
The Federal Parent Loan for Undergraduate Students (PLUS)
The Federal PLUS Loan is a federal education loan that enables credit-worthy parents to borrow low-interest loans for their dependent student. The Parent may borrow up to the student's Cost of Attendance (COA) at Union minus any financial aid the student may receive during the loan period(s).
The student must be enrolled each term as a least a half-time student and must also be degree seeking in order for the parent to be eligible to apply for the PLUS Loan.
The Federal PLUS Loan interest rate if fixed at 8.5%. Interest begins to accumulate when the first disbursement is made. Loan funds for the academic year will be disbursed in two equal installments, one for the fall and one for the spring. Generally, repayment of Federal PLUS Loans begins 60 days after the final disbursement for the school year in which it was awarded. However, some lenders are now offering grace periods associated with the PLUS loan. Check with your selected lender for details.
Two loan fees may be deducted from each loan disbursement. The U.S. Department of Education and the Guarantee agencies may charge a total of up to 4% loan fees.
If a parent is denied a PLUS Loan, students may be able to borrow additional Stafford Unsubsidized Loan Funds in the following maximum annual amounts:
| Freshmen & Sophomore | $4,000 Annual Maximum |
| Junior & Senior | $5,000 Annual Maximum |
The Free Application for Student Aid (FAFSA) must be completed each year in order for a Parent to apply for The PLUS Loan.
A Federal PLUS Loan Application and Master Promissory Note must be completed with the Lender you select for the PLUS Loan. You will only need to complete the PLUS MPN the first time you apply for a Parent Loan at Union. The PLUS MPN is a serial note and is good for up to 10 years. You are able to e-Sign this PLUS MPN using Union's Online Lender List. In order to apply for a PLUS Loan each year, you are required to complete a Loan Pre-Approval with you selected Lender.
Your Lender will send you a Notice of Loan Guarantee with your loan amounts, anticipated loan disbursements dates and your loan award period. Loan funds are normally disbursed in equal installments. Loan funds are credited to the student’s account within 3 days after the funds are received and the student has met all federal requirements. If a student is due a credit balance check, it may be picked up at Union Station (for Jackson students) or in Room 105 on the Germantown campus (for Germantown students). See our Schedule of Loan Refund Dates.
Federal Perkins Loan
The Perkins Loan is a need-based federal loan awarded by the University, which requires the FAFSA to determine eligibility. Students filing the FAFSA before March 1 will receive priority consideration as funding is extremely limited. The interest rate is fixed at 5%. If awarded a Perkins Loan, the student must complete a Perkins Loan Master Promissory Note and Perkins Loan Entrance Counseling before funds can be disbursed to the student's account.
Alternative Loans
This is a non-federal educational loan available through private lenders. The loan is borrowed by the student but generally requires a co-signer. The interest rate is variable and is set by the individual lender. Information regarding lenders that offer alternative loans is available at Union's Online Lender List.
Loan FAQs
- What is a Master Promissory Note?
- How do I select a lender for a Stafford or Alternative Loan?
- If my parent needs to apply for a PLUS Loan, how do I know how much he should borrow?
- What if my parent is denied a PLUS by the lender?
- How will I be notified I have an approved loan?
- When will the loan funds be credited to my student account?
- What is Entrance Counseling?
- If I have an overage (credit balance) on my account when the loan funds come in, how and when can I get that money?
- When do Federal Loans have to be paid back?
- Can my loans be forgiven or canceled?
The Master Promissory Note (MPN) is a Serial Note for the Federal Stafford Loan or Federal PLUS, valid for up to 10 years. Once a student has signed an original Master Promissory Note with a lender, a new MPN will not be required for subsequent years unless there is a change in the lender. There is also a Master Promissory Note for the Federal Perkins Loan, held by Union University.
Union has a Lenders List for you to select your lender and apply on line. There are advantages of selecting one of these lenders: a) the federal loans are guaranteed through the State of Tennessee, and b) federal funds are transmitted to Union by electronic means. This expedites the processing and receiving of federal loans and alternative loans.
Using the Tuition and Fees Schedule, calculate the student's total cost for the academic year, minus any scholarships, grants and Stafford Loan funds included on the student's award letter. The remaining amount should reflect a close estimate of the student's remaining cost, not including books or other related expenses. A PLUS loan may cover the remaining cost including books and other related educational expenses up to the cost of attendance budget set by the university.
The lender will notify both your parent and Union of the denial. By federal law, a student may be awarded an additional Unsubsidized Loan ($4000 for a freshman or sophomore and $5000 for a junior or senior) if the parent is denied a PLUS. Union will automatically award the additional loan, should we receive notice of a PLUS denial.
Students will be notified in an Award Letter of the proposed loan amount(s) each academic year. If the student wants to decline or lower the amount, they should indicate such changes on the Acceptance Letter, sign it, and return it to the Office of Student Financial Planning.
Loan amounts are subject to change if the Financial Aid Package is adjusted. Federal Regulations do not allow a student to be over-awarded (receive more aid than the FAFSA shows student is eligible for).
A PLUS loan on the award letter simply means the school has processed the PLUS. The lender must approve the loan. If the PLUS is denied by the lender, the student may be eligible to borrow additional Unsubsidized Stafford Loan funds.
The loan period for the traditional undergraduate programs is usually Fall through Spring. Disbursements of loans generally will be the second week after the beginning of each semester provided the loan is awarded prior to the beginning of the term. The lender will send notification of the anticipated disbursement dates and loan amounts to the student's home address.
The Office of Student Financial Planning will notify you by email when your funds are credited to your student account. Federal regulations require that be done within 3 days after funds are received by Union.
Federal Perkins Loan funds will not be credited to the student's account until the student has completed entrance counseling for the Perkins Loan and signed their Federal Perkins Master Promissory Note for the year in the Office of Student Financial Planning.
In order to ensure that every Stafford Loan borrower understands completely the Stafford Loan Program, the federal government requires first time borrowers at Union to complete entrance counseling before funds can be credited to the student's account. After completion of online entrance counseling, the Office of Student Financial Planning will be automatically notified by email, and your funds will be disbursed. Federal Perkins Loan borrowers must also complete entrance counseling for the Perkins Loan before funds can be credited to their student account.
Students who have a credit balance on their student account as a result of loan funds will be cut a check by the Office of Business Services within 14 days after the loan is credited to their account. Credit balance checks may be picked up at Union Station on the Jackson campus (for Jackson students) or in Room 105 on the Germantown campus (for Germantown students). If you wish to have your check mailed to you, please call Union Station at 731-661-5000.
Repayment of a Federal Stafford Loan begins six (6) months after the student graduates or ceases to be at least a half -time student. Generally, repayment of Federal PLUS loans begins 60 days after the final disbursement for the school year. However, some lenders are now offering grace periods associated with the PLUS loan. Your lender can advise you of repayment options available. Repayment of a Federal Perkins Loan begins nine (9) months after the student graduates or ceases to be at least a half- time student.
General Loan Forgiveness Information
Federal Stafford Loan Teacher Forgiveness Program
Federal Perkins Loan Teacher Cancellation
American Federation of Teachers
