You are here: Home > Offices > Financial Aid

Student Loans

For student loans at Liberty University, important information is available regarding terms and conditions, and additional eligibility requirements. Below are several links to assist students with the details for federal and private student loans.

Federal Loans

 

 

Federal Loans

The federal student loan is a low interest rate loan with interest rates tied to the 10-year Treasury Bill rate (or "T-bill") for loans that were first disbursed on or after July 1, 2013.

The recently passed deal on student loan interest rates has changed the way in which interest rates are determined for Federal Student loans. This will affect loans that were first disbursed on or after July 1, 2013. Interest rates will now be linked to the 10-year Treasury Bill rate, plus adding the following percentages:

  • 2.05 percent for Undergraduate Stafford Loans (Subsidized and Unsubsidized)
  • 3.6 percent for Graduate Stafford Loans (*Graduate students only receive Unsubsidized loans)
  • 4.6 percent for Parent and Graduate PLUS Loans

With 10-year Treasury Bill (or "T-bill") currently at 1.81%, this would mean that the interest rate for a Subsidized or Unsubsidized Stafford Loan would be 3.86%, 5.41% for Graduate Unsubsidized Stafford Loans, and 6.41% for a PLUS Loan (both parent and graduate options).

Please be aware that the interest rates will cap at 8.25% on Undergraduate Stafford Loans, a cap of 9.5% on Graduate Stafford Loans, and a cap of 10.5% on Parent and Graduate PLUS Loans. Treasury-Note prices fluctuate and their yields remain linked to market prices, therefore, the Treasury-Note yield will change so the 1.81% is not indefinite, bu the interest rate will be fixed for the life of the loan.

  • Subsidized
    • Need-based as determined by the FAFSA, other aid sources and educational costs
    • Only available for undergraduate students
    • The U.S. Department of Education pays the interest on the loan while the student is enrolled at least half-time
  • Unsubsidized
    • Not need-based
    • Available for undergraduate and graduate students
    • The student pays the interest while in school or it can be capitalized*

Borrower limits for federal loans based on grade level and dependency status
(U.S. Department of Education)

Student Type Base
(Max Subsidized Loans)
Additional Unsubsidized
Dependent Freshman $3,500 $2,000
Dependent Sophomore $4,500 $2,000
Dependent Junior/Senior $5,500 $2,000
Independent Freshman and Dependent Freshman w/ Parent plus Denial $3,500 $6,000
Independent Sophomore and Dependent Sophomore w/ Parent plus Denial $4,500 $6,000
Independent Junior/Senior and Dependent Junior/Senior w/ Parent plus Denial $5,500 $7,000
Graduate Students $0 $20,500



Note (Effective July 1, 2008): Dependent undergraduate students whose parent is denied a Parent PLUS Loan have increased eligibility for unsubsidized loans. Freshman and sophomore students may borrow a maximum of $6,000 in unsubsidized loan funds in addition to their base amount listed above. Junior and senior students may borrow a maximum of $7,000 in unsubsidized loan funds in addition to their base amount listed above.

*Capitalized interest is daily interest that is calculated on a loan's unpaid principal balance at the rate specified in the promissory note.  Unlike accrued interest, capitalized interest is added to the principal loan amount and paid at a later time.

 

Liberty University is not responsible for returning any portion of a loan that was disbursed to a student or parent directly (e.g., as a result of a credit to the student’s account) before the request for cancellation was received.

If a student or parent borrower decides to return Direct Loan funds, he or she will need to visit www.nslds.ed.gov to look up their loan servicer information. He or she can send the check to the address listed for their particular loan servicer.

Please follow this link to the Federal Direct Loans Q & A page on how to find your loan servicer: http://www.liberty.edu/index.cfm?PID=20371. You will find step-by-step instructions by clicking on “How can I find the servicer for my federal student loans?” Loan Servicer Payment addresses are also listed under “List of Federal Student Loan Servicers.”

The borrower must include a cover note stating whether the funds are for a loan payment or for canceling (inactivating) the loan. The note should indicate which loan or loans the funds should be applied to, and in what amounts (if repayment is being split between loans).

Aggregate Loan Limits (Effective July 1, 2008)

Aggregate Loan Limits

 

  • Undergraduate dependent students: $31,000 (no more than $23,000 of which can be subsidized)
  • Undergraduate independent students: $57,500 (no more than $23,000 of which can be subsidized)
  • Graduate students: $138,500 unsubsidized only

PLUS Loans

PLUS Loans

The Federal Parent PLUS Loan is for credit-worthy parents of dependent undergraduate students. The Federal Graduate PLUS Loan is for credit-worthy independent graduate students. The amount is based on educational costs minus any other financial aid.

Students whose parents are denied the Parent PLUS Loan due to adverse credit may be eligible to receive an additional $4,000 or $5,000 in unsubsidized loans. For information regarding to the Parent PLUS interest rate, please see "Federal Loan" dropdown to learn more about this being tied to the T-bill. Repayment on a Parent PLUS loan usually begins 60 days after the final disbursement.

Liberty University is not responsible for returning any portion of a loan that was disbursed to a student or parent directly (e.g., as a result of a credit to the student’s account) before the request for cancellation was received.

If a student or parent borrower decides to return Direct Loan funds, he or she will need to visit www.nslds.ed.gov to look up their loan servicer information. He or she can send the check to the address listed for their particular loan servicer.

Please follow this link to the Federal Direct Loans Q & A page on how to find your loan servicer: http://www.liberty.edu/index.cfm?PID=20371. You will find step-by-step instructions by clicking on “How can I find the servicer for my federal student loans?” Loan Servicer Payment addresses are also listed under “List of Federal Student Loan Servicers.”

The borrower must include a cover note stating whether the funds are for a loan payment or for canceling (inactivating) the loan. The note should indicate which loan or loans the funds should be applied to, and in what amounts (if repayment is being split between loans).

Private Loans

Private Loans

Check out Private loans at ELM Select.

Private loans are not part of the federal loan programs and should be used as a last resort. Liberty encourages all students to first consider the Federal Student Loan programs, as they offer the lowest fees and interest rates. However, if those loan programs do not cover the student's educational expenses, they may want to consider applying for a private loan.

Private loans that are not certified by Liberty University are called Direct-to-Consumer (DTC) loans. Students should be read the terms of DTC loans very carefully and be aware that DTC loans may affect other aid eligibility when they are applied to the student's account.

Direct-to-Consumer Loans (DTC)

Direct-to-Consumer Loans (DTC)

Students apply for a Direct-To-Consumer Loan (DTC loan) by directly contacting the lender. Liberty University's Financial Aid Office is not initially notified of DTC loans, nor is it part of the process to certify eligibility. Since, however, the U.S. Department of Education requires Liberty University to acknowledge the receipt of the loan and regard it as a resource paid to the student's account, Liberty may need to adjust other sources of financial aid to accommodate the DTC loan amount.

Because DTC loans can negatively affect other financial aid, students are encouraged to exhaust all federal sources first. 

Average Indebtedness

Average Indebtedness

As of May 2007, Liberty students who have graduated borrowed an average of $21,171 in loans through various federal and private loan programs. Using an estimated 7-percent interest rate, the student would make payments of $246 per month for a 10-year period.

Students should seek out loan forgiveness programs such as the Southside Tobacco Loan Forgiveness Program and Teacher Loan Forgiveness to look toward ways on saving during repayment. 

Federal Loan Origination Fee

Federal Loan Origination Fee

As of July1, 2013, the U.S. Department of Education charged the origination fees for Subsidized, Unsubsidized, Parent PLUS, and Graduate PLUS loans.  The originiation fees for students that have a first disbursement of any of these loans on or after July 1, 2013 are as follows:

Subsidized and Unsubsidized Loans: 1.051% origination fee
Parent and Graduate PLUS Loans: 4.204% origination fee

Student Loan (NSLDS) Issues

Student Loan (NSLDS) Issues

Disability Discharge

As of July 1, 2010, federal regulations regarding disability discharges have been implemented which include provisions for students who:

  • have had federal loans discharged due to disability, and
  • would like to return to school and receive additional federal student aid (FSA)

These updates provide a process for students and schools to follow for the reinstatement of FSA eligibility. Students who have obtained a disability discharge in the past are required to provide medical documentation certifying the student has regained the ability to “engage in substantial gainful activity.” Below is a Physician Certification Form that, once completed, can be submitted to satisfy this requirement. Please sign the release of information authorization section and ask your physician to complete the remainder of the form.

Additionally, schools are required to collect a signed statement from the student acknowledging he/she is aware of the terms of receiving FSA following a disability discharge. For your convenience, a form that can be used to satisfy this requirement is also listed below. Please sign and return the form to Liberty University’s Financial Aid Office, Attention: Loan Department-Disability Discharge Area, for processing.

Furthermore, students who have loans in conditional discharge status are ineligible for additional federal student loans and/or TEACH grants until the loans are removed from ‘conditional discharge’ status, by having them permanently discharged or returned to ‘repayment’ status.

To regain eligibility, a student must take several steps, including submitting a request to cancel the existing conditional discharge. This request must be submitted to the Conditional Discharge Department (CDD).  For further information about this, please contact CDD by calling (888) 303-7818.

For additional information regarding what is needed to regain eligibility after filing for and receiving a disability discharge, please visit the following link, and refer to the documents provided to you by CDD: http://www.disabilitydischarge.com/home/. If you have any questions or concerns regarding this matter, please contact the Financial Aid Office by e-mailing financialaid@liberty.edu, or calling (888) 583-5704.

2013-2014 Physicians Certification Form
2013-2014 Personal Statement Form

2014-2015 Physicians Certification Form
2014-2015 Personal Statement Form

Overlapping Loan Periods

Overlapping loan issues will need to be reviewed if a student has Stafford Subsidized and/or Unsubsidized loans in which the loan period end date has crossed into the current academic year at Liberty. All schools will not have the same academic year loan periods as Liberty University; therefore, if the loan period at your previous school extends into Liberty University's current academic year even by one day, they will need to be reviewed.  Overlapping loan issues are reviewed in an effort to not overaward a student for any given academic year.  We will need to gather information from the student's previous school in order to determine eligibility for the current academic year. 

Default

Please visit here for more information on how to resolve a loan default.

Bankruptcy

A student with a Federal Student Aid (FSA) loan or grant overpayment that has been discharged in bankruptcy remains eligible for federal loans, grants, and work-study. The Bankruptcy Reform Act of 1994 prohibits denial of aid based solely on filing for, or having a debt discharged in, bankruptcy.

A student who has filed for bankruptcy may need to give additional documentation before receiving federal funds. However, if the loans are not in default the necessity for documentation is unlikely.

Aggregate Loan Limits

The U.S. Department of Education sets both annual and aggregate loan limits for Stafford loans based on the student’s dependency status and grade level. The 2012 Federal Student Aid Handbook 3-119 states, “A student who has inadvertently received more than the annual or aggregate Stafford loan limits is ineligible to receive any FSA funds until the over borrowing is resolved.” This includes Pell, Stafford loans and Plus loans.

Based on the information from the National Student Loan Data System (NSLDS) a student who has an overage or potential overage is flagged with a “C” code or comment code advising the school to review the information. When flagged,  a manual review is needed to determine if there is an overage or an overage that may have been resolved. If unresolved, there are several ways an overage can be taken care of.  Proof of resolution must be provided to Liberty University before any remaining Title IV eligibility can be processed.

  • Pay the overage
  • Contact a financial aid representative with the school where the overage was  created to see if a reallocation of funds is an option
  • Contact the over awarding school or lender for a reaffirmation letter
  • Consolidate loans