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Loans and Lenders

Loans can be an integral part of financing a college education. Because the terms and conditions can vary greatly, be sure to compare all loan programs carefully. Understanding your options is the basis for borrowing wisely.

Federal Loans for Students

Federal Direct Loans are available to eligible students who complete the Free Application for Federal Student Aid (FAFSA). There are two types. The subsidized loan does not accrue interest while the student is enrolled in school. The unsubsidized loan does accrue interest, beginning from the time the loan is disbursed. Eligibility is determined by the student's class year, level of financial need, and amount of other aid received.
  • Interest rate: 3.73% (fixed) for 2021-2022
  • Origination fee: 1.057%
  • Maximum annual limit: 1st year: $5,500, up to $3,500 can be subsidized; 2nd year: $6,500, up to $4,500 can be subsidized; 3rd/4th year: $7,500, up to $5,500 can be subsidized
  • Repayment begins: 6 months after graduating, leaving school, or dropping below half-time enrollment
  • Repayment period: varies depending on payment plan selected

Federal Loans for Parents

Direct Parent PLUS Loans are government loans made available to parents of dependent undergraduate students. To qualify, the parent must be a U.S. citizen or eligible non-citizen, and must not have an adverse credit history. A credit check is required as part of the application. If the credit is denied, the parent can reapply with an endorser, or the student may borrow an additional unsubsidized loan for $4,000-$5,000, depending on class year.
  • Interest rate: 6.28% (fixed) for 2021-2022
  • Origination fee:  4.228%
  • Maximum annual limit: total cost of attendance (budget) less any financial aid the student receives
  • Repayment begins: once loan is fully disbursed, option to request a deferment
  • Repayment period: varies depending on plan selected

Alternative/Private Loans

Private student loans are non-government loans from lenders such as banks, credit unions, and state agencies. Either the parent or the student can be the primary borrower, though with the latter, a co-signer is usually required. Before taking an alternative loan, we encourage families to exhaust all federal student loan options first. You may find this summary of the differences between federal and private student loans helpful. 
Vassar College does not endorse or recommend any private lender in particular. Ultimately it is the family’s responsibility to research all options and select the one that best meets their needs. For a sampling of lenders used by Vassar students in recent years, visit ELM Select.
  • Interest rate: varies. A comparison of interest rates (prime rate versus 3 month Libor) can be found at Financial Forecast Center
  • Origination fee:  varies
  • Maximum annual limit: total cost of attendance (budget) less any financial aid the student receives
  • Repayment begins: varies
  • Repayment period: varies