The facts about loans.

Unlike scholarships or grants, loans must be paid back. However, you won’t have to repay most student loans until you’ve graduated from college.

Typically, student loans come with a maximum interest rate that is set by federal law. Keep in mind that you may be able to find an even lower rate by checking out multiple lenders.

Due to the ever-changing credit markets, we recommend that if you take a student or parent loan, you take the loan for the entire academic year. Should you decide you don’t need the additional funds you may cancel and/or return the loan proceeds.

Student Loans

Subsidized Stafford Loans Toggle Accordion

Amount: First-Year Student, $3,500; Sophomore, $4,500; Junior/Senior, $5,500.

Loan amounts are subject to a processing fee.

  • Loans made by the U.S. Department of Education to students who complete the FAFSA and demonstrate financial need.
  • The interest rate is variable and capped at 8.25%.  The rate is set each July.  For loans disbursed after July 1, 2015 the rate was 4.29%.
  • The government pays interest on the borrower’s behalf until the repayment period begins.
  • First-time borrowers must complete a Master Promissory Note and entrance counseling prior to having loan funds credited to their account.

Unsubsidized Stafford Loans Toggle Accordion

Amount: First-Year Student, up to $5,500; Sophomore, up to $6,500; Junior/Senior, up to $7,500.

Loan amounts are less than any Subsidized Stafford Loan and are subject to a processing fee.

  • Loans made by the U.S. Department of Education to students regardless of financial need. Students must complete a FAFSA.
  • The interest rate is variable and capped at 8.25%.  The rate is set each July.  For loans disbursed after July 1, 2015 the rate was 4.29%.
  • The student is responsible for interest that accrues while in school and may opt to make interest payments or defer all payments until the payment period begins.
  • First-time borrowers must complete a Master Promissory Note and entrance counseling prior to having loan funds credited to their account.

Private and Alternative Loans Toggle Accordion

Alternative loans are available from a variety of banks and lenders. You can apply for an alternative loan by contacting the lender directly. Often, lenders require that Albion’s Student Financial Services Office certify that you are a student and confirm your costs for the year.

It’s important to be an informed borrower. Loan provisions and requirements vary greatly and change frequently. Contact your lender for specific information regarding the most current interest rates, fees, and eligibility requirements before taking a loan.

Be sure to research loan companies carefully. The Federal Trade Commission provides tips on selecting a lender.

Parent Loans

Federal Parent Loans for Undergraduate Students (PLUS) Toggle Accordion

Amount: $100 up to the total cost of education.

  • Available to parents of college students.
  • Is limited only by the cost of attendance.
  • New borrowers pay interest rates set by Federal Government for loans borrowed through the Direct Loan program.
  • A FAFSA and credit check are required.
  • Repayment begins within 60 days after the loan has been fully disbursed. Interest-only payments may be made while the student is in school. Deferments of loan payments are available – see the loan disclosure for further information.
  • The loan has a maximum repayment period of 10 years.
  • New PLUS applications may be completed at StudentLoans.gov.

Alternative/Private Loans

There are a number of lenders that provide alternative loans; review a list of popular lenders. The College can provide you with a list of those lenders that students have used in the past; we, however, don’t rank or recommend any lenders.

Loan provisions and requirements vary greatly and change frequently. You should contact the lender for specific information regarding the most current interest rate, fees and eligibility requirements before taking a loan. You should carefully research the loan company you are considering doing business with. The Federal Trade Commission provides tips on items to look for when selecting a lender.

Once you have decided to apply for an alternative loan, allow 3-5 business days to have your application forwarded to our office. When you have completed your application online, you should notify our office either by emailing financialaid@albion.edu or calling 517-629-0440.

Items to Consider When Comparing Loans

To ensure that you are fully informed, you should read the lender’s application and promissory note fully for specific information regarding the terms and conditions of your loan. Important questions to ask before taking a loan include:

Eligibility Toggle Accordion

  • What is the minimum and maximum loan amounts offered per year and cumulatively?
  • Is the amount you are eligible to borrow tied to school costs and other financial aid received?
  • What is the approximate time it takes to obtain a decision for loan approval?
  • Are there any minimum enrollment requirements? If so, what are they?
  • What are the credit criteria for loan approval? Do they include a debt-to-income ratio or other income requirements?
  • What is considered “poor credit,” and is no credit considered poor credit?
  • What steps will the lender take to help qualify borrowers with poor credit?
  • Are co-signers an option or a requirement? Under what conditions are they required?
  • Is there an option to release the co-signer at a later date? If so, what are the conditions?

Interest Rates and Fees Toggle Accordion

  • What is the interest rate? What is it based on (i.e. Prime, T-Bill, etc.)?
  • Is the interest rate fixed or variable? If variable, how frequently can the rate change?
  • Is there a maximum amount the interest rate can increase with each change?
  • Is the loan adjusted based on rate changes? For example, will interest be capitalized (added to the principal) or will the repayment term or amount be adjusted?
  • What fees are charged? When and how are fees paid?
  • What is the total cost of the loan over the life of the loan?

Repayment Terms and Conditions Toggle Accordion

  • What are the minimum and maximum repayment terms and payment amounts?
  • Are there any restrictions or special conditions you need to consider?
  • When does repayment begin? Is there a grace period before payments are expected? If so, how long is it?
  • Can payments be deferred? If so, under what circumstances?
  • Are payments required while you are in school?
  • Are there any prepayment penalties?

Service Toggle Accordion

After originating a loan, the lender can keep the loan until it is paid in full, sell it to a secondary market or keep it and contract with a servicer to manage the day-to-day details of tracking and collecting loan payments.

  • When are the loan funds disbursed?
  • Will you have online access to the application process and for account inquiry?
  • Who do you contact for questions about your loans?
  • Can the lender combine your private and federal loan payments into one bill?

Loan Entrance Counseling

Each student who receives a loan for the first time at Albion must complete loan entrance counseling. Loan funds cannot be released until this requirement has been met.

Entrance counseling can be completed by visiting StudentLoans.gov.

Repaying Your Loans

Concerned about how much your loan payments might be? Wondering if you’ll earn enough with your chosen major? Explore your repayment options with the Loan Simulator or learn how your projected income compares to your projected loan payment with the Undergraduate Student Loan Calculator.