Welcome to the “Educational Loans” section of our Website, and join us for an overview of one topic that most college students have to consider while financing their education.  An educational loan is one of the most valuable resources for students and parents, and it has been since it was first introduced into federal legislation to the Congress of the United States in the late 1950’s, in response to the launch of  “Sputnick.”

Educational loans were developed specifically for college students and parents and are repayable at competitively low interest rates.  They are simple to apply for (via the FAFSA), are readily available, and generally offer a variety of repayment options.  The majority of loans that are based on financial need, the subsidized ones, require no repayment of principle or payment of interest while the student is in school, as long as he/she is attending at least half-time (generally six credits per term).  Unsubsidized loans require quarterly interest payments (not principle) while the student is in attendance.  The principle on both a type of loans become repayable after a grace period, generally after the student graduates or enrolls for less than six credits per term. 

For college students and parents, the two largest educational loan programs are the William D. Ford Federal Direct Student Loan Program, and the Federal Family Educational Loan Program (FFELP).  Long Island University offers loans through the Federal Direct Student Loan Program, and also offers loans through the Federal Perkins Student Loan and for pharmacy majors, the Health Professions Student Loan Programs.  The federal government guarantees all of these loans, and most are based on demonstrated financial need.

To help our students and parents become informed borrowers, we offer the following information on the educational programs.  We have provided information that we hope will explain loan borrowing from the application process through the repayment process, and hope that we can help families make the best loan choices for their student. This and additional information is also available in our publication “Financial Aid Guide” which is sent to all students with their award notices each year.

Overview of Educational Loans:

There are several educational loans available at the Brooklyn Campus and application for all of them is made by completing the FAFSA (Free Application for Federal Student Aid).  Available through the federal government’s website at www.fafsa.ed.gov, a FAFSA must be completed each year for which a loan is requested.  The following is a brief description of the loan programs:

Federal Direct Subsidized Loans:

Based on financial need, this type of loan is repayable six months (grace period) after graduation or enrollment of less than six credits per term.  No payment of the principle or interest is required  until the end of the six-month grace period.  The Office of Student Financial Services determines student eligibility based on financial need as demonstrated from the FAFSA, on academic status, and on cumulative loan history.

Federal Direct Unsubsidized Loans:

Unsubsidized loans are very similar to subsidized loans but they require that the student pay  interest while in school.  Quarterly interest payments are required but the principle amount is deferred until the six-month grace period is over.  Students have the option to capitalize these interest payments but we suggest that they become very familiar with all aspects of capitalization before deferring the quarterly interest payment.  The Office of Student Financial Services determines student eligibility based on academic status, cumulative loan history and information from the FAFSA.

Federal Direct PLUS Loans:

The parents of dependent undergraduate students may apply for this loan to help pay for their children’s education.  Repayable 60 days after disbursement, parents are responsible for all interest charges.  Amounts borrowed are related to the student’s cost of education as determined by the Office of Student Financial Services, minus other financial aid received.  In order to qualify for a PLUS Loan, parents may not have an adverse credit history or be in default of any educational loan.  Parents are given the option of an endorser, if required.

Federal Perkins Loans:

A low interest (5%) federal loan for full-time undergraduate and graduate students exhibiting financial need, this loan becomes repayable nine months after graduation or termination of at least half-time status.  No interest is charged until that time.

Health Professions Student Loans (HPL):

This federal loan for full-time Pharmacy students is repayable at 5% interest, one year after graduation or immediately upon termination of Pharmacy studies (whether undergraduate or graduate).  No interest is charged until that time.  Students must show proof of parental income in order to qualify for this type of loan funding.