Loans

All loans require repayment on the part of the borrower. They are not "free money," like grants and scholarships.

Please note that Hofstra University is required to submit loan information to the National Student Loan Data System (NSLDS), and that information is accessible by guaranty agencies, lenders, and institutions determined to be authorized users of the data system.

How do I apply for federal loans?

By filing the FAFSA, you will receive an award package that lists your federal Direct Subsidized/Unsubsidized student loan eligibility and Federal Perkins loan if you are eligible for it.

First-time Direct Subsidized/Unsubsidized and Parent PLUS and Graduate PLUS loan borrowers must complete a Master Promissory Note (MPN) online at www.studentloans.gov. The MPN is valid for 10 years, so once you file that promissory note, you will not need to complete another MPN unless time exceeds 10 years.

Borrowers of the Parent PLUS or Graduate PLUS Loan must also complete the "Request PLUS Loan" process at www.studentloans.gov for each loan every year. PLUS applicants experiencing credit issues may apply with an endorser (similar to a co-signer).

First-time borrowers of Direct Subsidized and Unsubsidized Direct Loans must also complete the "Entrance Counseling" at www.studentloans.gov. First-time borrowers of the Graduate PLUS Loan must also complete the "Entrance Counseling" at www.studentloans.gov.

Continuing borrowers of federal loans must simply file the FAFSA and accept or decline the loans online through the Hofstra portal (with the exception of the Parent PLUS and Graduate PLUS Loan, for which you must complete the “Request PLUS Loan” process at www.studentloans.gov every year).

For step-by-step assistance with www.studentloans.gov, call the Direct Loan Servicing Center at 1-800-557-7394

Who is servicing my Federal Direct Loans?

Direct and PLUS loans are a common source of funding for your education. These loans are part of the William D. Ford Federal Direct Loan Program, where the U.S. Department of Education is the lender. Servicing of these loans is provided by one of several agencies. The Department of Education selects the servicing agency on behalf of a Direct Loan borrower.

How do I find out who is servicing my direct loans?
The National Student Loan Data System (NSLDS) is the U.S. Department of Education's central database for federal student aid. Borrowers may log in to the NSLDS website at www.nslds.ed.gov to determine which agency is servicing their loans. To access the site, a borrower must provide their FSA ID.

Who is my servicer and why do I need to know?
It's important to know who services your loan because they will be your primary contact throughout repayment. Your servicer will:

• Process your deferment and forbearance forms
• Answer your questions regarding repayment
• Provide information about the various repayment options
• Process change of address forms
• Send you your bills

Click for contact information on Federal Loan Servicers.

What is the minimum number of credits per semester required for loan eligibility?

Direct Subsidized/Unsubsidized and PLUS:

• Undergraduate and Law School = 6*
• All other graduate = 4.5*

Alternative loans vary by lender.

*REQUIRED FOR DEGREE

When will my loan disburse?

Loans usually disburse to your account on or about 10 days prior to the start of each term. Please note: Disbursement may not occur if you have not completed all the requirements and/or submitted all the required documentation.

Students have the right to cancel all or part of the loan or disbursement prior to or after the funds have been disbursed to the University. Prior to the disbursement of the loan, students should contact the Office of Student Financial Services and request that the loan be canceled or reduced. After the loan has been disbursed to the University, students need to contact the Office of Student Financial Services and request that all or a portion of the loan funds be returned to their lender. You can contact the Office of Student Financial Services via email or visit them in person in Memorial Hall on the second floor.

Can I apply for any loans without filing the FAFSA?

Alternative loans are the only education loans you can apply for without filing the FAFSA.

What is the deadline for a student to be certified for loans?

Direct loans and/or PLUS =The last day of enrollment of the academic period.
Alternative loans vary by lender but can usually be applied for up to a year after the last day of the period the student was enrolled.

How do I find out more information about alternative loans and apply for them?

Visit https://www.hesc.ny.gov/pay-for-college/financial-aid/types-of-financial-aid/student-loans/private-student-loans.html

Hofstra University does not prefer, recommend, promote, endorse, or suggest any lender. You are not required to borrow from any of the lender that appears on the list and there is no penalty for selecting a different lender, if you prefer.

What is the difference between Subsidized and Unsubsidized Stafford loans?

For Undergraduate students, the awarding of subsidized or unsubsidized Stafford loans is determined by the FAFSA. You must demonstrate financial need for the subsidized loan. Beginning July 1, 2023, the interest rate for both is fixed at 5.50%. The subsidized loan interest is paid by the government while you are in school. The unsubsidized loan interest is capitalized if you do not pay it while you are going to school. You can indicate on the MPN if you do or do not want to pay the unsubsidized interest while you are in school.

What does it mean to "capitalize" the interest on the unsubsidized loan?

In simple terms, it means to add the interest onto the principal (the amount you borrow) and charge you interest on top of that.

What is an "Entrance Interview"?

Federal regulations require a counseling session, which informs you of your rights and responsibilities in borrowing the loan. First-time borrowers of the Direct loan must complete the entrance counseling at www.studentloans.gov. First-time borrowers of the Graduate PLUS loan must complete the entrance counseling at www.studentloans.gov.

What is an "Exit Interview"?

Federal regulations require that student loan borrowers complete a counseling session within 30 days of leaving school or dropping below half-time status (below 6 credits* undergraduate or Law School, below 4.5 credits* graduate.) It is information that informs you of your rights and responsibilities in repaying the loan. To complete an Exit Interview, visit www.hofstra.edu/FAExit .

*REQUIRED FOR DEGREE

When do I have to start paying back the loans?

Direct  and Graduate PLUS loan payments begin after your six-month grace period of leaving school or dropping below half-time status (below 6 credits undergraduate or Law School, below 4.5 credits other graduate.). Parent PLUS loan payments begin within 60 days of full disbursement of the loan, unless deferment arrangements are made (call 1-800-848-0979 to make arrangements for deferment). For federal Perkins Loans, the grace period is nine months. However, if you're attending less than half time, check with your Student Financial Services counselor to determine your grace period. During the grace period, you don't have to pay any principal, and you won't be charged interest.

Alternative student loan repayment on the principal and interest usually begins after the student is out of school, but some require interest payments while in school; contact the lender for more specific information.

What are the interest rates and loan fees on the loans?

The Stafford loan and PLUS loan (parent and graduate) interest rates and loan fees are as follows:

For loans disbursed on or after July 1, 2023:             

• the interest rate for Subsidized and Unsubsidized Stafford loans for undergraduate students is 5.50%
• the interest rate for Unsubsidized Stafford loans for graduate students is 7.05%
• the interest rate for parent and graduate PLUS loans is 8.05%

For loans first disbursed between July 1, 2021 and October 1st, 2023             

• for both unsubsidized and subsidized Stafford loans the origination fee will be 1.057%.
• for both Parent and Graduate PLUS loan the origination fee will be 4.228%

Alternative loans vary by lender and are usually based on the libor or prime rate+ an additional percentage based on your credit or credit of your co-borrower.

How much time do I have to repay my education loans?

For Direct Loans, the repayment period varies from 10 to 25 years, depending on which repayment plan is chosen. See more on repayment options later in this section or visit www.studentaid.ed.gov

Alternative loans vary by lender.

How much will I have to repay and how often do I make payments?

Direct Direct Loan—usually, you'll make monthly payments. Your repayment amount will depend on:

• The size of your debt
• The length of your repayment period
• The repayment plan you choose

Direct Direct Loan:

• You'll make payments through your servicer. Contact your servicer for instructions on how to make online payments.

Do I have repayment options?

Yes. Repayment plans offered for Direct Direct Loans are generally the same as those offered for FFEL Direct Loans. However, the Direct Loan program offers an Income-Contingent Repayment plan and the FFEL program offers an Income-Sensitive Repayment plan. The repayment periods for Direct Loans vary from 10 to 25 years. When it comes time to repay, you can pick a repayment plan that's best-suited to your financial situation. The following repayment plans will be available to Direct and FFEL Direct Loan borrowers:

• A Standard Repayment Plan with a fixed annual repayment amount paid over a fixed period of time not to exceed 10 years.
• A Graduated Repayment Plan paid over a fixed period of time not to exceed 10 years. With this plan, your payments start with a relatively low amount and then increase, generally every two years.
• An Extended Repayment Plan with a fixed annual or graduated repayment amount to be paid over a period not to exceed 25 years. If you're an FFEL borrower, you must have more than $30,000 in outstanding FFEL Program loans. If you're a Direct Loan borrower, you must have more than $30,000 in outstanding Direct Loans. This means, for example, that if you have $35,000 in outstanding FFEL Program loans and $10,000 in outstanding Direct Loans, you can choose the extended repayment plan for your FFEL Program loans, but not for your Direct Loans. Your fixed monthly payment is lower than it would be under the Standard Plan, but you'll ultimately pay more for your loan because of the interest that accumulates during the longer repayment period.
• Income-Contingent Repayment (ICR) Plan (Direct Loans): Your monthly payments will be based on your annual income (and that of your spouse, if married), your family size, and the total amount of your Direct Loans. Borrowers have 25 years to repay under this plan; the unpaid portion will be forgiven. However, you may have to pay income tax on the amount that is forgiven. As of July 1, 2009, graduate and professional student PLUS borrowers in the Direct Loan program are eligible to use the ICR plan. Direct Loan Parent PLUS borrowers are not eligible for the ICR repayment plan. Visit www.dl.ed.gov for more information for Direct Loan Income-Contingent Repayment Plans.
• Income-Sensitive Repayment Plan (FFEL Loans): With an income-sensitive plan, your monthly loan payment is based on your annual income. As your income increases or decreases, so do your payments. The maximum repayment period is 10 years. Ask your lender* for more information on FFEL Income-Sensitive Repayment Plans.
• Income-Based Repayment (IBR): This repayment option (the income-sensitive repayment plan in the FFEL program and the income-contingent repayment plan in the Direct Loan program will continue to be available to borrowers) is available as of July 1, 2009, to all FFEL and Direct Loan borrowers who have a partial financial hardship, except for FFEL or Direct Loan Parent PLUS Loan borrowers or a FFEL or Direct Loan Consolidation Loan borrowers, who repaid Parent PLUS loans through the Consolidation Loan. Under this plan, your required monthly payment amount will be based on your income during any period when you have a partial financial hardship. Your monthly payment amount may be adjusted annually. The maximum repayment period under this plan may exceed 10 years. If you repay under this plan and meet certain other requirements over a specified period of time, you may qualify for cancellation of any outstanding balance on your loans. Contact the Direct Loan Servicing Center (for Direct Loans) or your FFEL lender (for FFEL Program loans) for more information about the Income-Based Repayment Plan.

What are some key facts about repaying Direct and FFEL Direct Loans that I should know about?

• If you don't choose a repayment plan when you first begin repayment, you'll be placed under the Standard Repayment Plan.
• You can change plans to suit your financial circumstances.
  You'll get more information about repayment choices before you leave school and, later, from the holder of your loan. You can also get more details about repayment plans at https://studentaid.gov/loan-simulator/. The chart below shows typical repayment plans for both programs. This chart also shows estimated monthly payments for various loan amounts under each plan and assumes that the student is making regular monthly payments on any unsubsidized loans and is not capitalizing the interest while in school. If the interest is capitalized* (added to the outstanding principal balance), the cumulative payments and total interest charges will be higher than shown in the chart.

Payments are calculated using the fixed interest rate of 6.8% for student borrowers.

1. For an FFEL borrower, the requirement is that the borrower (1) must have had no outstanding balance on an FFEL Program loan as of Oct. 7, 1998, or on the date the borrower obtained an FFEL Program loan on or after that date, and (2) must have more than $30,000 in outstanding FFEL Program loans. For a Direct Loan borrower, the requirement is that the borrower (1) must have had no outstanding balance on a Direct Loan Program loan as of Oct. 7, 1998, or on the date the borrower obtained a Direct Loan Program loan on or after that date, and (2) must have more than $30,000 in outstanding Direct Loan Program loans. The amounts were rounded to the nearest dollar and were calculated based on a 25-year repayment plan.
2. This is an estimated monthly repayment amount for the first two years of the term and total loan payment. The monthly repayment amount will generally increase every two years, based on this plan.
3. Assumes a 5% annual growth (Census Bureau) and amounts were calculated using the formula requirements in effect during 2006.
4. HOH is Head of Household. Assumes a family size of two.

You can also find a repayment calculator at https://studentaid.gov/loan-simulator/.

Examples of Typical Perkins Loan Repayments

Are there tax incentives while paying back student loans?

Yes. Tax benefits are available for certain higher education expenses, including a deduction for student loan interest for certain borrowers. This benefit applies to all loans used to pay for postsecondary education costs, including PLUS Loans. The Internal Revenue Service (IRS) Publication 970, Tax Benefits for Higher Education, explains these credits and other tax benefits. You can get more information online at www.irs.gov or by calling the IRS at 1-800-829-1040. TTY callers can call 1-800-829-4059.