Loans

Educational loans are low interest loans that must be repaid. Loans are available through the federal government (the William D. Ford Federal Direct Loan Program) in which eligible students borrow directly from the U.S. Department of Education.

Educational loans are also available from state and private lenders, and are known as alternative loans. We encourage you compare the available loan options before choosing a lender and borrow only what you need. Your student loan payments should be only a small percentage of your salary after you graduate.

linkDirect Loans

Direct Subsidized Loans

Direct Subsidized Loans are for undergraduate students with financial need. Baylor will review the results of your Free Application for Federal Student Aid (FAFSA) and determine the maximum amount you can borrow.

You are not charged interest while you’re in school at least half-time and during deferment periods.

You will be charged interest during the six-month grace period for subsidized loans for which the first disbursement is made on or after July 1, 2012, and before July 1, 2014.

For loans disbursed prior to this timeframe and after this timeframe, interest will not accrue during the grace period.

Limitation on Direct Subsidized Loan Usage

Federal regulations limit the time frame for borrowing Direct Subsidized Loans to 150% of the published program length for students who borrow their first Direct Loan on or after July 1, 2013.

This may have a significant impact on students who change programs or transfer from a two-year institution.

Click here for a detailed explanation.

Direct Unsubsidized Loans

You are not required to demonstrate financial need to receive a Direct Unsubsidized Loan. Like Direct Subsidized Loans, the amount you can borrow will be determined by Baylor.

Interest accrues (accumulates) on an unsubsidized loan from the time it’s first disbursed. You can pay the interest while you are in school and during grace periods and deferment or forbearance periods, or you can allow it to accrue and be capitalized (that is, added to the principal amount of your loan).

If you choose not to pay the interest as it accrues, this will increase the total amount you have to repay because you will be charged interest on a higher principal amount.

Annual and Aggregate Loan Limits

The annual loan limit amounts are the maximum yearly amounts you can borrow in both Subsidized and Unsubsidized Direct Loans. You can have one type of loan or a combination of both. Because you can't borrow more than your cost of attendance minus any other financial aid you'll get, you may receive less than the annual maximum amounts. Also, the annual loan limits assume that your program of study is at least a full academic year.

Remember, only borrow what you need; you can borrow less than you are offered each year. If you have advanced a grade level by the end of the spring (freshman to sophomore or sophomore to junior), you may be eligible to borrow an additional $1000 for the summer.

If you borrow the maximum allowed each year for four years, but then find you need a fifth year of study you will reach the aggregate limit and will be limited in the amount you can borrow during your fifth year.

With careful planning allowing you to graduate on time or early, you will not reach the aggregate limit. Click here to view a sample loan disclosure statement. You will receive a statement specific to your loan before your loan is disbursed.

Click here to view maximum annual and aggregate (total) loan limits for Direct Subsidized and Unsubsidized Loans.

Loan Fees and Interest Rates

The total origination fee for Subsidized and Unsubsidized Loans is 1.059% of the amount borrowed for loans disbursed after October 1, 2019. The origination fee will change effective October 1, 2020.

The interest rate for undergraduates on Direct Subsidized and Unsubsidized Loans borrowed on or after July 1, 2019, and before July 1, 2020, is 4.53%.

The interest rate for graduate students on Direct Unsubsidized Loans borrowed on or after July 1, 2019 and before July 1, 2020 is 6.08%.

New rates will be established each June for the upcoming year. The interest rate for a loan will apply for the life of the loan (fixed-rate). As a result, it is likely you will have a set of fixed-rate loans, each with a different interest rate.

Master Promissory Note(MPN)

You must sign a Direct Loan Master Promissory Note. This will be the only promissory note you will have to sign as long as you continue to attend Baylor. Your FSA ID is required in order to eSign. Go to studentloans.gov and log in with your FSA ID to sign the MPN.

Right to Decline Loans

You have the right to decline any financial aid that you are offered. You have a number of rights and responsibilities pertaining to borrowing student loans. Click here for a list of important rights and responsibilities of which you should be aware.

Entrance Counseling

Complete Direct Loan entrance counseling one time after you have been offered a Direct Subsidized or Unsubsidized Loan and accepted the offer. Go to studentloans.gov and sign in with your FSA ID to complete entrance counseling.

Exit Counseling

Exit counseling is required when you cease to be enrolled at least half-time. If you drop below half-time hours, withdraw, graduate, or stop attending, you are required to complete exit counseling by logging in with your FSA ID at studentloans.gov.

Repayment

When you receive your first Direct Loan, you will be contacted by the servicer for that loan (you repay your loan to the loan servicer). Your loan servicer will provide regular updates on the status of your Direct Loan, and any additional Direct Loans that you receive. If you’re not sure who your loan servicer is, you can look it up on nslds.ed.gov.

After you graduate, leave school, or drop below half-time enrollment, you will have a six-month grace period before you begin repayment.

The interest subsidy provided during the six-month grace period for subsidized loans for which the first disbursement is made on or after July 1, 2012, and before July 1, 2014, has been eliminated. If you received a subsidized loan during this timeframe, you are responsible for the interest that accrues while your loan is in the grace period.

You do not have to make payments during the grace period (unless you choose to) but the interest will be added (capitalized) to the principal amount of your loan when the grace period ends. During this period, you'll receive repayment information from your loan servicer, and you'll be notified of your first payment due date. Payments are usually due monthly. For a sample repayment schedule, click here.

linkPLUS Loans

Direct PLUS Loans are unsubsidized loans for the parents of dependent students. PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest is charged during all periods.

PLUS Loan Applicant/Borrower

The applicant for PLUS must be the student's biological or adoptive parent or the student's stepparent, if the biological or adoptive parent has remarried at the time of application. You must be a dependent student who is enrolled at least half-time. For financial aid purposes, you are considered "dependent" if you are under 24, unmarried, and have no legal dependents at the time the Free Application for Federal Student Aid is submitted. (Exceptions are made for veterans, wards of court, and other special circumstances.) If you are considered dependent, then the income and the assets of the parent you live with have to be reported on the FAFSA. However, this may not be the same parent who applies for the PLUS loan.

PLUS Application Process

First, complete the Free Application for Federal Student Aid (FAFSA). After you have received an award notification and decided that a PLUS loan is the best fit for you, apply through the U.S. Department of Education by completing the following steps:

  • Go to studentloans.gov Your parent will be asked to sign in with his/her FSA ID. (If your parent does not have an FSA ID, he/she should create one at FSA ID).
  • Select "Apply for a Direct Plus Loan."
  • Choose the Parent PLUS loan type. Go through the application process (which includes a credit check) to confirm approval or denial of the loan.
  • Choose a loan period. You should apply for the academic year, not one semester. You will have to repeat the application process (and possibly the credit check) if you apply for the fall only and later wish to apply for another semester.
  • Specify a loan amount. If "maximum amount" is selected, we will process the loan for the maximum amount available (cost of attendance minus all other financial aid received.) We encourage you to review your expenses carefully and apply only for the amount necessary.
  • If approved, first-time borrowers only must continue by choosing Complete Master Promissory Note. Repeat borrowers have completed the process.
  • If denied, your parent will be presented with several options.
  • The Department of Education will send a confirmation or denial to the Baylor Student Financial Aid Office and to you.

 

Amount Available to Borrow

The limit on a PLUS Loan is the student's cost of attendance minus any other financial aid received. You apply for the academic year and later apply for summer separately. The total origination fee is currently 4.236% of the amount borrowed. The interest rate on the loan is 7.08% for loans first disbursed after July 1, 2019, and before July 1, 2020. Origination fees and interest rates are reviewed and announced by the Department of Education each year. Go to Loan Disclosure Statement to view a sample. You will receive a statement specific to your loan before your loan is disbursed.

Credit Eligibility

Federal regulations define credit eligibility for a PLUS Loan as having no "adverse credit." This term normally means that the applicant has no debt repayment account that is 90 days or more delinquent, has not had any debt discharged in bankruptcy in the last 5 years, and has not been in default on any debt (no foreclosure, tax lien, repossession, wage garnishment, or write-off) in the last 5 years. An applicant will be determined to have an adverse credit history if the total combined outstanding balance of the debts, including debts in collection or charged off during the two years preceding the date of the credit report, is greater than $2,085.

Timing of Application

The credit check for a PLUS loan is valid for 180 days. Disbursement for Fall 2019 is scheduled for August 16, 2019 (the earliest date permissible by federal regulation.) You can apply for a PLUS or Grad PLUS loan for the 2019-2020 academic year no earlier than April 15, 2019. The studentloans.gov website will accept applications for the 2019-2020 academic year beginning April 15, 2019.

Next Steps for Approved Loans

All first-time borrowers must complete the master promissory note (MPN) at studentloans.gov. If the Department of Education approves the parent's PLUS, the Department of Education will notify Baylor and will send the loan funds to the school shortly before the semester begins. The funds will first be applied to tuition, fees, room and board, and other school charges. If any loan funds remain, they will be disbursed based on the parent's authorization on the application form. All PLUS Loans require the student be enrolled in at least half-time hours.

Next Steps for Denied PLUS Borrowers

If your parent is denied the PLUS Loan, then your parent has the option to either:

  • appeal the decision
  • add an endorser, or
  • you can receive a Direct Additional Unsubsidized Loan.

 

Your parent appeals the decision directly to the Department of Education and might qualify for a loan without passing the credit check if he can demonstrate that extenuating circumstances exist.

An endorser is a relative or friend who is able to pass the credit check and agrees to endorse the loan. An endorser promises to repay the loan if your parent fails to do so.

The maximum amount for an additional unsubsidized loan will vary based on your classification and your financial aid package. Generally freshman and sophomore students will qualify for an additional $4,000. Junior and senior students will typically qualify for an additional $5,000. If your parent later qualifies for a PLUS loan, any undisbursed monies remaining for the Direct Additional Unsubsidized Loan will be canceled, and the PLUS loan will be applied. Like other subsidized and unsubsidized loans, the Direct Additional Unsubsidized Loan is a loan in the student’s name and does not require a cosigner.

Right to Decline a Loan

You have the right to decline any financial aid that you are offered. You have a number of rights and responsibilities pertaining to borrowing student loans. Click here for a list of important rights and responsibilities of which you should be aware.

Entrance Counseling

Regular entrance counseling is required for all first-time Grad PLUS (graduate student) borrowers. Go to studentloans.gov and log in with your FSA ID to complete entrance counseling. Credit entrance counseling is required for certain PLUS (parent) borrowers. Parents who are approved for PLUS with an endorser or have an approved appealed credit decision will be required to complete credit entrance counseling. These borrowers will be notified if credit entrance counseling is required.

Exit Counseling

Exit counseling is required for student borrowers (Grad PLUS) but is not required for PLUS (parent) borrowers. Exit counseling is required when you drop below half-time hours, withdraw, graduate, or stop attending. You are required to complete exit counseling by logging in with your FSA ID at studentloans.gov.

Repayment

There is no grace period for a Direct PLUS Loan; the repayment period begins 60 days after Baylor makes the last disbursement of the loan. However, if you are a parent PLUS borrower who is also a student, you can defer repayment while you are enrolled in school at least half-time and for an additional 6 months after you graduate or drop below half-time enrollment. If you are a parent PLUS borrower, you can defer repayment of Direct PLUS Loans while the student for whom you obtained the loan is enrolled at least half-time, and for an additional 6 months after the student graduates or drops below half-time enrollment (half-time enrollment status is determined by Baylor). You must separately request each deferment period. Generally, you will have from 10 to 25 years to repay your loan, depending on the repayment plan that you choose. The loan servicer will notify you of the date your first payment is due. If you do not choose a repayment plan, you will be placed on the standard plan, with fixed monthly payments for up to 10 years. You can change repayment plans at any time by contacting your loan servicer. More detailed information about all repayment plans is available at studentloans.gov.

linkGraduate PLUS Loans

Direct Grad PLUS Loans are unsubsidized loans for graduate/professional students. Grad PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest is charged during all periods.

Grad PLUS Application Process

First, complete the Free Application for Federal Student Aid (FAFSA). After you have received an award notification and decided that a Grad PLUS loan is the best fit for you, apply through the U.S. Department of Education by completing the following steps:

  • Go to studentloans.gov
  • You will be asked to sign in with FSA ID.
  • Select "Apply for a Direct Plus Loan".
  • Choose the Grad PLUS loan type. Go through the application process (which includes a credit check) to confirm approval or denial of the loan.
  • Choose a loan period. You should apply for the academic year, not one semester/quarter. You will have to repeat the application process (and possibly the credit check) if you apply for the fall only and later wish to apply for another semester/quarter.
  • Specify a loan amount. If "maximum amount" is selected, we will process the loan for the maximum amount available (cost of attendance minus all other financial aid received.) We encourage you to review your expenses carefully and apply only for the amount necessary.
  • If approved, first-time borrowers only must continue by choosing Complete Master Promissory Note. Repeat borrowers have completed the process.
  • If denied, you will be presented with several options.
  • The Department of Education will send a confirmation or denial to the Baylor Student Financial Aid Office and to you.

 

Amount Available to Borrow

The limit on a Grad PLUS Loan is the student's cost of attendance minus any other financial aid received. You apply for the academic year (fall/spring semesters or fall/winter/spring quarters). You apply for summer separately. The total origination fee is currently 4.236% of the amount borrowed. The interest rate on the loan is 7.08% for loans first disbursed after July 1, 2019, and before July 1, 2020. Origination fees and interest rates are reviewed and announced by the Department of Education each year. Go to Loan Disclosure Statement to view a sample. You will receive a statement specific to your loan before your loan is disbursed.

Credit Eligibility

Federal regulations define credit eligibility for a Grad PLUS Loan as having no "adverse credit." This term normally means that the applicant has no debt repayment account that is 90 days or more delinquent, has not had any debt discharged in bankruptcy in the last 5 years, and has not been in default on any debt (no foreclosure, tax lien, repossession, wage garnishment, or write-off) in the last 5 years. An applicant will be determined to have an adverse credit history if the total combined outstanding balance of the debts, including debts in collection or charged off during the two years preceding the date of the credit report, is greater than $2,085.

Timing of Application

The credit check for a Grad PLUS loan is valid for 180 days. Disbursement for Fall 2019 is scheduled for 10 days before the start of classes (the earliest date permissible by federal regulation.) You can apply for a PLUS or Grad PLUS loan for the 2019-2020 academic year no earlier than April 15, 2019. The studentloans.gov website will accept applications for the 2019-2020 academic year beginning April 15, 2019.

Next Steps for Approved Loans

All first-time borrowers must complete the Master Promissory Note (MPN) and Grad PLUS borrowers must also complete entrance counseling at studentloans.gov. If the Department of Education approves your loan, the Department of Education will notify Baylor and will send the loan funds to the school shortly before the semester/quarter begins. The funds will first be applied to tuition, fees, room and board, and other school charges. If any loan funds remain, they will be disbursed based on your authorization on the application form. Grad PLUS Loans require the student be enrolled in at least half-time hours.

Next Steps for Denied Grad PLUS Borrowers

If you are denied a Grad PLUS, you have the option to either appeal the decision, add an endorser, or pursue a private alternative loan. You appeal the decision directly to the Department of Education and might qualify for a loan without passing the credit check if you can demonstrate that extenuating circumstances exist. And endorser is a relative or friend who is able to pass the credit check and agrees to endorse the loan. An endorser promises to repay the loan if you fail to do so.

Right to Decline

You have the right to decline any financial aid that you are offered. You have a number of rights and responsibilities pertaining to borrowing student loans. Click here for a list of important rights and responsibilities of which you should be aware.

Entrance Counseling

Regular entrance counseling is required for all first-time Grad PLUS (graduate student) borrowers. Go to studentloans.gov and log in with your FSA ID to complete entrance counseling. Credit entrance counseling is required for certain PLUS (parent) borrowers. Parents who are approved for PLUS with an endorser or have an approved appealed credit decision will be required to complete credit entrance counseling. These borrowers will be notified if credit entrance counseling is required.

Exit Counseling

Exit counseling is required for student borrowers (Grad PLUS) but is not required for PLUS (parent) borrowers. Exit counseling is required when you drop below half-time hours, withdraw, graduate, or stop attending. You are required to complete exit counseling by logging in with your FSA ID at studentloans.gov.

Repayment

There is no grace period for a Direct Grad PLUS Loan. You must separately request each deferment period. Generally, you will have from 10 to 25 years to repay your loan, depending on the repayment plan that you choose. The loan servicer will notify you of the date your first payment is due. If you do not choose a repayment plan, you will be placed on the standard plan, with fixed monthly payments for up to 10 years. You can change repayment plans at any time by contacting your loan servicer. More detailed information about all repayment plans is available at studentloans.gov.

linkAlternative Loans

Alternative loans should be considered once you have explored the options available through the Direct Subsidized/Unsubsidized and/or PLUS loan programs. Some families turn to alternative loans when the federal loans don't provide enough money or when they need more flexible repayment options. (For example, a parent might be willing to cosign a note for the student but may want the student to bear primary responsibility for repaying the loan.)

Advantages of a Co-signer

Eligibility for alternative loans often depends on the student's credit score; therefore, a cosigner is most often required. Even if a cosigner is not required, the student can usually receive a more favorable rate with a cosigner. Alternative loans generally cost more than the education loans offered by the federal government but are less expensive than credit card debt.

Fixed versus Variable

Some lenders offer a fixed rate product, while others offer a variable rate product. Some lenders offer both types. A fixed interest rate will not fluctuate over time. A variable interest rate moves (up or down) based on changes of an underlying index. Some variable rate loans have an interest cap which cannot be exceeded.

Determining How Much to Borrow

Use your award letter, your BearWeb account, or contact a counselor in the Student Financial Aid Office to determine your maximum alternative loan eligibility. You should only request loan funds to cover your specific educational needs rather than the maximum allowed for the enrollment period. We recommend you borrow for the full academic year, not one semester at a time. Interest does not begin accruing on each portion of the loan until that portion is actually disbursed. Calculate how much you need to borrow for the semester and double that amount to cover both the fall and spring semesters. If you need help preparing a personalized budget, you may make an individual appointment by emailing Financial_Foundations@baylor.edu.

Loan Periods

Use the following dates for loan periods on your application. Please note, online programs may have different loan periods. Contact our office if you have questions. Also, please remember to enter the requested loan amount.

2019-2020 Academic Year

  • Undergraduates and Graduate Students
    • Fall/Spring 08/19 - 05/20
    • Fall 08/19 - 12/19
    • Spring 01/20 - 05/20
    • Summer 05/20 - 08/20
  • Law Students
    • Fall/Winter/Spring 08/19 - 04/20
    • Fall 08/19 - 11/19
    • Winter 11/19 - 01/20
    • Spring 02/20 - 04/20
    • Summer 05/20 - 08/20

 

Choosing a Lender

You are NOT restricted to the lenders presented on our preferred lender list. You should not be directed to any specific lender by the University; you may choose any participating lender and follow their application process.

Some important factors for you to consider in choosing a lender include cost (interest rates and potential origination fees), flexibility (repayment options), and customer service. Common customer service considerations include the availability of a fixed rate loan product, account information online, deferment options, and cosigner release options.

Baylor's lender list was established by an open Request for Information (RFI) process and scored by a University committee who reviewed submissions from lenders in spring 2017 on the basis of borrower benefits and services, timely processing, and prompt customer service. Placement on the lender list is the result of our evaluation of the lender's borrower benefits offered, flexibility, and customer service to you and our staff.

To comply with the Higher Education Opportunity Act of 2008 (HEOA), Baylor has adopted the federally mandated Code of Conduct for Education Loans to address specific legislative concerns relating to educational loan programs.

Preferred Lender List

Baylor utilizes ELMSelect, a neutral lender and product comparison tool, to present the lenders on our preferred lender list to you. Access our lender list by visiting

linkOther Loans

In addition to the William D. Ford Direct Loan Program and alternative education loans from private lenders, a few other loan programs are available although funding is often limited.

Nursing Loan

The Nursing Loan is a federal loan program for students pursuing a degree in nursing. Consideration is based on completion of the Free Application for Federal Student Aid and admission to the Nursing School. It is a low-interest loan for undergraduate and graduate students with exceptional financial need. Loans of up to $5200 are made with government funds through Baylor's financial aid office, and Baylor acts as the lender. The interest rate is 5 percent. You are not responsible for paying the interest on the loan during in-school, grace, and deferment periods. The aggregate limit is $17,000.

College Access Loan (for Texas residents only)

The College Access Loan (CAL) Program provides an alternative type of educational loan to Texas students that attend colleges and universities in Texas. Baylor receives an allocation of funding from the Texas Higher Education Coordinating Board each year. You do not have to demonstrate financial need by completing the Free Application for Federal Student Aid to receive this loan, which may be used to cover all or part of your Expected Family Contribution (EFC). However, you must deduct the maximum Pell Grant eligibility and your eligibility for Direct Subsidized and Unsubsidized Loans (even if you do not wish to pursue a Direct Loan) from the cost of attending Baylor to determine the amount of the CAL loan you could receive. For more information and to apply, click here.

Baylor Institutional Loan

Very limited funding is available. This is a loan of last resort and is not appropriate for most students. Approval is determined by the Student Financial Aid Office and all decisions are final. Students must be enrolled at least half-time at Baylor University for the loan to remain in a deferment status. If the borrower transfers or begins another program of study at any other institution, no deferment is available. There are no loan cancellation benefits. The maximum repayment period is seven years.

Other Loan Sources

Occasionally private foundations and organizations make loans to students who live in a specific geographic location or who meet other unique criteria. Your high school counselor is a good resource for information regarding these types of loans.