Loans

For general loan information refer to the Federal Student Aid Department an office of the U.S. Department of Education.

You will find information about current interest rates, loan limits, federal requirements for the student loan programs and much more.

After you apply for your loans, the money will be credited to your account if you are enrolled and still attending classes; if not the loan money will be returned to the U.S. Department of Education.

An eligible borrower is a student enrolled in a post-secondary program on at least a half-time basis. The school will determine the borrower status as either a dependent or independent student.

If you intend to apply for a Federal Loan, read the three-step process [PDF] you’ll need to complete. Part of this process includes completing your Entrance Counseling and Master Promissory Note.

Undergraduate Students Interest Rates:

Effective July 1, 2019 – 4.53%
Effective July 1, 2020 – 2.75%

Loan Limits

Subsidized/Unsubsidized
1st year $3,500/$2,000
2nd year $4,500/$2,000

As an independent student, you may be eligible to borrow up to an additional $4,000 in an unsubsidized loan.

Interest Responsibility

Subsidized: Federal government pays the interest while student is enrolled at least half-time.
Unsubsidized: Borrower is responsible for all interest costs. Interest may be paid quarterly, annually, or capitalized (applied to principal) during period of enrollment.

Standard Repayment

Payments begin six months after student withdraws, graduates, or drops below half-time status. Minimum monthly payment is $50. The loan must be repaid within 10 years. Extended, graduated, or income-sensitive repayment options are available.

Consolidating Your Federal Student Loans

There are lots of reasons borrowers should consolidate their student loans. Unfortunately, the process of consolidating is sometimes more complicated than the decision to consolidate. As a result, some borrowers consolidate without taking full advantage of the benefits of consolidation, while others decide not to consolidate at all.

• Find information on consolidation from Federal Student Aid.
• Minnesota Self Loans and private loans cannot be consolidated.
• Find all of your federal loans in the NSLDS-National Student Loan Data System.

An eligible borrower is a parent of a dependent student enrolled in a postsecondary program on at least a half-time basis. The school determines PLUS Loan eligibility. Borrower credit review required.

Parent PLUS Loan Interest Rates:

Effective July 1, 2019 – 7.08%
Effective July 1, 2020 – 5.30%

Loan Limit

No annual maximum. Parent may borrow up to full cost of student’s education less any other financial aid the student receives.

Interest Responsibility

Borrower is responsible for all interest costs.

Standard Repayment

Payments begin 30 to 60 days after full loan disbursement. (An In-School Deferment can be requested each year while the student is still attending, up to a maximum of four years.) Minimum monthly payment is $50. Loan must be repaid in 10 years.

The parent borrower will need to know their FSA ID to apply.

To apply please go to www.studentloans.gov and after the parent logs in using their FSA ID, click on the “Request a Direct PLUS Loan” link.

Ridgewater College recognizes that not all students will be able to meet the financial requirements of paying for an education on their own, even with the assistance of traditional financial aid resources. We cannot recommend a loan program or lender for you; however, we can provide you with the information you will need to borrow wisely.

Each borrower’s wants and needs are unique. You should evaluate each loan program to determine the best loan for you and your educational plans.

Do not borrow more than you can afford to repay.

Tips on Private Loans

Do your homework before submitting an application. Interest rates are usually determined by the applicant’s and/or co-signer’s credit history or score. Be sure you ask what your interest rate is going to be, and if there are any upfront fees or fees added later when repayment starts. Be sure you also know the consequences of withdrawing from school early, making a late interest payment or making a late principal payment once you start repayment.

Before completing an application, make sure you know:

• The interest rate and how it is calculated
• The amount of application or origination fees (upfront fees or repayment fees)
• When payments are required (interest and principal)
• If a co-signer is required

Comparison tool for private loans

• FASTChoice (Hutchinson Campus Students)
• FASTChoice (Willmar Campus Students)

Resources

• PrivateStudentLoans.com
• FinAid: Private Student Loans
• U.S. Department of Education: Federal Student Aid
• Learn more about the differences between federal and private student loans.

Current Interest Rates

• Wall Street Journal’s Prime Rate Bank Survey
• LIBOR: London Interbank Offered Rate