Education loans are a form of financial aid that must be repaid, with interest. Generally, loans do not need to be repaid until after a student leaves school. Education loans come in three major categories: student loans (e.g., Stafford and Perkins loans), parent loans (e.g., PLUS loans) and private student loans (also called alternative student loans).

Subsidized Stafford Loan

The Stafford Subsidized Loan is awarded to students on the basis of financial need determined by the Free Application for Federal Student Aid (FAFSA). Lending institutions, such as banks or credit unions, provide the funds for this loan. The federal government pays the interest on this loan until you begin repayment. Repayment of this loan will begin six months after you graduate, leave school, or drop below half-time enrollment (6 hours). To qualify for this loan please see the Federal loan requirements.

Unsubsidized Stafford Loan

The Unsubsidized Stafford Loan Program was created by the government to assure that all students, regardless of their income, would be able to obtain a student loan. The federal government does not pay the interest while you are in school. Interest will be charged from the time the loan is disbursed until it is repaid in full. If you decide to capitalize or defer the interest, it will be added to the principle amount of your loan and this will increase the amount you have to repay. If you choose the option of paying the interest as it accumulates, then you will pay less in the long run. Repayment of the interest and principle will begin six months after you graduate, leave school, or drop below half-time enrollment (6 hours). To qualify for this loan please see Federal loan requirements.

Stafford Loan Application Process

Southwestern University uses the Texas Guaranteed Student Loan Corporation's Loans by Web online service to process federal Stafford loans. All Stafford Loan borrowers (new or continuing) must complete this process each time a loan is certified for any period of enrollment. Once a student has received a Notification of Financial Aid Eligibility letter from Southwestern University, the student borrower will go to the Loans by Web™ Web site to complete the loan application. Be sure to select the "I am a student borrower" option. First-time borrowers will have to complete the online Entrance Counseling. To do so, click the Entrance Counseling link on the left. You will be re-directed to the Mapping Your Future site. Once finished, please return to Loans by Web. The student borrower will need to be sure and complete each step to receive the confirmation page. The confirmation page should be printed and kept for possible future reference. If any problems or questions arise during the completion of the Loans by Web process, please contact Texas Guaranteed Student Loan Corporation at 1-800-845-6267.

Federal Perkins Loan

The Perkins Loan is a long-term, low-interest loan for both undergraduate and graduate students who have exceptional financial need. Perkins loans are made through our financial aid office; Southwestern University is your lender and the loan is made with institutional and government funds. You must repay this loan to SU. You are required to sign a promissory note each year you receive a Perkins loan. It is possible to have your Perkins loan cancelled because of the type of work you do once you leave school. Cancellations are possible in the fields of teaching, law enforcement, social work, nursing, or volunteer service. The Federal Student Aid Web site has information on teaching cancellations. The Southwestern Financial Aid Office has information on other available cancellations.

Perkins Loan Process

If your Notification of Financial Aid Eligibility letter lists the Perkins Loan as an option, you may accept your Perkins Loan online. You will need your U.S. Department of Education personal identification number (PIN) to E-sign the promissory note. You may obtain a PIN here. If you do not have access to a computer with an Internet connection, please contact the Financial Aid Office at (512) 863-1259 or via email.

Parent Loans for Undergraduate Students (PLUS)

The purpose of the Parent Plus Loan is to assist parents by providing a source of loan funds to help pay the cost of education for dependent undergraduate students. Parents may borrow up to the full cost of attendance less any other financial assistance the student receives. Parents must be able to pass a credit check or obtain a 'co-signer' who is able to pass the credit check. Both the parent and student must meet general eligibility requirements for federal financial assistance. Students must be enrolled at least 6 hours each semester to be eligible.

Parent PLUS Loan Application Process

Southwestern University uses the Texas Guaranteed Student Loan Corporation's Loans by Web online service to process federal PLUS loans. Once a student has received a Notification of Financial Aid Eligibility letter from Southwestern University, the parent borrower may go to the Loans by Web™ Web site to complete the loan application process. The parent borrower will need to select "I am a parent borrower" and complete each step of the Loans by Web process, using parent information to receive the confirmation page. The confirmation page should be printed and kept for possible future reference. If any problems or questions arise during the completion of the Loans by Web process, please contact Texas Guaranteed Student Loan Corporation at 1-800-845-6267.

Alternative Loans

Alternative student loans are offered by banks or lending institutions to help students and parents bridge the gap between the cost of education and the amount of financial aid received. These are private supplemental loans that are NOT guaranteed by the federal government. Terms and conditions can vary according to specific lender guidelines.

Alternative (Private) Loan Process

If your Notification of Financial Aid Eligibility letter lists a private loan as one of your options, your next step is to apply for a private loan with the lender of your choice. After approval of your application by the lender, certification will be requested from Southwestern University and your loan will be disbursed in accordance with the lender's procedures.