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.

Advantages of Borrowing Federal Direct Student Loans:

Long Island University is a Federal Direct Student Loan Program participant which provides several advantages for our student and/or parent borrowers include:

• The process is simpler: Federal Direct Student Loan borrowers complete one application, the Free Application for Federal Student Aid (FAFSA), There is no separate loan application. However, they must complete an Entrance Counseling session and a Master Promissory Note (MPN).

• Students do not borrow from outside lenders: The federal government provides funding to the University for all eligible students and raises the loan funds through its regular Treasury bill auctions.  Federal Direct Student Loans are loans made with federal capital and owned by the federal government.  Loan repayment is made directly to the federal government’s fund.

• Federal Direct Student Loans are never sold:  Unlike loans borrowed from banks and guarantee agencies, loans are never sold to outside bidders.  Since borrowing takes place directly with the federal government, borrowers make loan payments to the Department of Education for the life of their loans.  It’s “One-Stop Shopping” from loan application to repayment.

• Loan proceeds are disbursed directly to the student borrower’s account at the University:  Since the entire loan process is electronic, delivery to the borrow is quick and efficient.