Federal DIRECT LOAN
The Direct Loan is a federal loan awarded when you complete a FAFSA. The amount available depends on your grade level, and there may be an option to add an additional loan if your parents did not qualify for a Direct Parent PLUS loan.
A credit check is not required for this type of loan, which typically carries the lowest interest rates available.
Interest on the loan begins accruing as soon as the first of the funds are distributed to Cal Lutheran, but if you qualify for the subsidized version of the loan, the government will pay that interest while you're in school. Repayment is not required on this type of loan until 6 months after leaving school.
Alternative loans are offered by third-party, private lenders. A credit check is required and they are not based on financial need. Alternative loans have fixed or variable interest rates which depend on the borrower's credit, co-signer's credit, and the loan market.
Federal DIRECT PARENT PLUS LOAN
This federal loan is made to the parents of dependent undergraduate students and a credit check is required. The interest rate on the Direct Parent PLUS Loan is higher than the Direct Loan made to students, but typically lower than a private loan. Interest will begin accruing as soon as the first disbursement of funds is made, but repayment is delayed until 60 days after the loan is fully disbursed, or when completing the application you may choose to defer payment until after your student leaves Cal Lutheran.
The Perkins Loan may be available if your FAFSA shows exceptional financial need, such as no expected family contribution.
The interest rate is fixed at 5% and repayment is not required for 9 months after leaving school. The federal government subsidizes the loan and will pay the interest while you are a student and during the 9 month grace period. There is a limited amount of Perkins Loan funds available for Cal Lutheran to award to students.