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.

Student Rights and Responsibilities:

Borrowing educational loans is a serious undertaking and there are rights and responsibilities that are connected to it that all students should be aware of.  They should:

• Know that their Federal Direct Student Loan(s) is a loan and must be repaid, and fully accept that responsibility
• Understand that my student loan is to be used to pay for their training and necessary living expenses
• Understand repayment will generally begin for the Federal Direct Student Loan Borrowers following a six month grace period
• Inform their lender if their address, telephone number, or name changes, if they leave school, transfer, or drop below half-time status, or if they change graduation dates
• Not be in default on any other loan(s) from any federal Title IV student loan programs
• Understand the concept of a master promissory note and the fact that they may have several loans made under this note
• Understand that they may cancel all or a portion of their loan by informing their school within 14 days after the date they receive a disbursement notice or by the first of the payment period, whichever is later
• Notify their lender if:
• withdraw, graduate or fail to enroll in school
• register for or drop to a less than half-time status.
• transfer to another school
• change their name, address, phone number or Social Security number
• change their expected date of graduation

Students also have the responsibility to:

• make monthly payments on their loan after they leave school, unless they have a deferment or forbearance.
• notify the U.S. Department of Education Direct Loan Servicing Center of anything that might alter their eligibility for an existing deferment.