Southwestern

Engaging Minds, Transforming Lives

Financial Aid

Compare the Different Types of Loans

Several factors will help you determine which loan program(s) might be best for you and your family. The chart below compares the five different types of loans available. 

Compare the following topics Federal Direct Subsidized Loans Federal Direct Unsubsidized Loans

Federal Perkins Loans

Federal Direct  PLUS Loan

Private (Alternative)/ State Loans 

Who is the lender? Federal Government Federal Government Federal Government Federal Government Federal Government
Who is the borrower? Student Student Student Parent Student (but often requires a co-borrower, such as a parent) 
How much can be borrowed annually? First-year:  Up to $3,500 based on need

Second year: Up to $4,500 based on need

Third year and beyond:  Up to $5,500 based on need.
First-year: $5,500 less any Subsidized Stafford Loan eligibility

Second year:  $6,500 less any Subsidized Stafford Loan eligibility

Third year and beyond:  $7,500 less any Subsidized Stafford Loan eligibility
Up to $5,500 based on need Total cost of attendance less any other financial aid received Total cost of attendance less any other financial aid received
What’s the current (2013-14) interest rate? 3.86% fixed for this year’s loan. Interest rate subject to change for future loans. 3.86% fixed for this year’s loan.  Interest rate subject to change for future loans.  5% fixed 6.41% fixed for this year’s loan.  Interest rate subject to change for future loans. Rates vary by lender
What are the current (2013-14) loan origination fees? 1.072% 1.072% 0%  4.288% Rates vary by lender
Is credit approval required? No No  No  Yes  Yes
Is the interest subsidized (i.e., paid for by the federal government?) Yes, while enrolled in school at least half-time.  Interest subsidy ends when student leaves school or drops below half-time enrollment. No Yes, while enrolled in school at least half-time.  Interest subsidy ends 9 mos after student leaves school or drops below half-time enrollment. No No
What is the standard repayment plan? Payment not required while student is enrolled at least half time. First payment due 6 mos after student leaves school or drops below half-time. Standard repayment period is 10 years.  Alternate repayment plans available. Payment not required while student is enrolled at least half time. First payment due 6 mos after student leaves school or drops below half-time. Standard repayment period is 10 years. Alternate repayment plans available. Payment not required while student is enrolled at least half time. First payment due 9 mos after student leaves school or drops below half-time. Standard repayment period is 10 years. Alternate repayment plans available. Payment begins within 45 days after the loan is fully disbursed. Standard repayment period is 10 years.  Alternate repayment plans available. Repayment plans vary by lender.

 

Calculate

Use the Student Loan Calculator or Parent PLUS Loan Calculator: to figure out how much your family can really afford to borrow.