Parent Loans | Graduate LoansAlternative Student Loans

Managing Loan Debt | Avoid Default | Understanding Gap Financing Options

For new federal student loan borrowers, effective July 1, 2013 there will be a limit on the maximum period of time that students can receive Direct Subsidized Loans based on program length.

Students that exceed 150% of their program length will no longer be eligible to receive subsidized loan funds. For more information regarding the new regulation, please reference the Time Limitation on Direct Subsidized Loan Eligibility for First-Time Borrowers.

Direct Loan Interest Rates and Fees can be found here.

Federal Direct Loan Program

Student Loans are available to both undergraduate and graduate students. A student must complete a Master Promissory Note (MPN) and entrance counseling before receiving a Federal Direct Loan. Interest rates and fees for student loans are available for viewing on the federal student aid website.

Federal Direct Subsidized Stafford Loan If you are eligible for a Federal Direct Subsidized Stafford Loan, the federal government pays your interest while you're in school at least half-time and for some loans, during grace periods and periods of deferment. You must have "need", as defined by the federal government, to qualify for the subsidized loan.

Federal Direct Unsubsidized Stafford Loan These loans are available to students who do not qualify for "need" based Federal Direct Subsidized Loans or who are not eligible for the full Federal Direct Subsidized Loan amount. The amount of the loan cannot be more than the difference between the cost of attendance (COA) and any financial assistance you will receive from the school and any outside source (including the subsidized Federal Direct Stafford Loan). Interest accrues on the Federal Direct Unsubsidized Loan while you are in school and during the six-month grace period before repayment begins.

Additional Federal Direct Unsubsidized Stafford Loan Additional Direct Unsubsidized Loans may be available for independent students, and for dependent students whose parents do not pass a credit check and therefore are unable to borrow under the Federal Direct Parent Loan for Undergraduate Students (PLUS) Program.

Entrance & Exit Loan Counseling If you decide to accept a loan, you are making a commitment to repay it. Loan counseling is required by SOU's Financial Aid Office to help you understand your loan obligations. Students receiving the Federal Direct Loan for the first time at SOU must complete an online entrance loan counseling session at When a student departs SOU, they must complete exit counseling at (this is only for federal loans, not private loans).

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Parent Loans

Federal Direct Parent Loan for Undergraduate Students This loan is available to parents of dependent undergraduate students. The current interest rate and loan fees can be found here. Repayment begins within 60 days after the final disbursement of that loan's academic period. Parents have the option to defer payment while their student is enrolled in at least half time status; however, interest will continue to accrue. The loan maximum cannot exceed the total cost of attendance (budget) minus any other financial aid received (including any Subsidized, Unsubsidized Federal Direct Loans the student is receiving).

Estimated PLUS loans will be included in the financial aid award for eligible dependent students. To be eligible for the direct PLUS loan, a parent will be required to complete the parent PLUS Loan application and Master Promissory Note (MPN) online at The application cannot be completed more than 90 days prior to the disbursement of the loan or the credit check will need to be repeated. Because of this, applications for each new school year (fall term) will become available online on or after July 1. Parents will be notified directly by the Direct Loan servicer if they are eligible to receive the PLUS loan. If the parent does not pass the credit check and the PLUS loan is denied, the credit check may be challenged, additional information and documentation may be provided or an endorser may sign for the loan with the parent.

If the parent decides not to pursue the denied PLUS loan, the student may request an additional unsubsidized loan. Prior to that additional loan being awarded, the parent must notify Southern Oregon University in writing that they no longer wish to continue the application process for the PLUS loan.

To apply for a Parent PLUS Loan: (NOTE: For dependent students only & begin this process starting July 1 for each new school year)

  1. Go to

  2. Parent logs in using their FSA ID

    If parent is a new user or has forgotten their FSA ID, click here

  3. Click on "Apply for a PLUS Loan" link

  4. Click on "Complete PLUS Request for Parents"

  5. Complete application

    If application is not approved, stop here and contact the financial aid office

    If application is approved, continue on with the next steps

  6. If parent's first PLUS Loan, parent needs to complete the PLUS Loan Master Promissory Note (MPN)

  7. Click on "Complete a Master Promissory Note"

  8. Click on "Complete PLUS MPN for Parents"

  9. If parent previously borrowed a PLUS Loan, the Master Promissory Note should be on file and no further action required

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Graduate Loans

Federal Direct Graduate PLUS Loans Available to students admitted and enrolled in a graduate program that have eligibility for additional funding after receiving Federal Direct loans and any other financial assistance. The current interest rate and loan fees can be found here. Repayment begins within 60 days after the final disbursement of that loan's academic period. The loan maximum cannot exceed the total cost of attendance (budget) minus any other financial aid received (including any Subsidized and Unsubsidized Federal Direct Loans the student is receiving).

To apply for the Graduate PLUS loan, the graduate student will need to complete the Graduate PLUS loan application (includes a credit check), Master Promissory Note (MPN) and a special Graduate PLUS Loan counseling session online at Applicants will be notified directly by the Direct Loan servicer if they are eligible to receive the PLUS loan. If the applicant does not pass the credit check and the Graduate PLUS loan is denied, the credit check may be challenged, additional information and documentation may be provided or an endorser may sign for the loan with the applicant.

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Alternative Student Loans from Private Lenders

Alternative or private loans are privately funded, generally provided by commercial lenders, and eligibility is not based on financial need. However, the amount borrowed cannot exceed the cost of education minus all other financial aid. Interest rates and repayment terms vary but are generally less favorable than those provided through the William D. Ford Federal Direct Loan Program. Private loans are based on a student's credit worthiness, (and co-signer, if applicable) and used to supplement the federal and state financial aid.

Important things to consider when selecting the right lender and private loan for you:

  • Understand the ultimate cost of the loan over its lifetime. Compare annual percentage rates (APR) vs. interest rates and fees to determine the real cost of the loan. Find out how long you have to pay it off.
  • Be aware of what the monthly payments will be upon graduation or leaving school and how that will affect your lifestyle after college.
  • Find out what the "borrower benefits" really mean to you. How is each benefit achieved and how are they kept throughout repayment. What happens if you miss an "on time" payment?
  • Find out if the lender sells student loans. If your loan is sold, will any repayment incentives be honored by the purchasing lender?
  • Are there forbearance or deferment options? Understand what additional cost these may have for you.
  • How does the lender capitalize interest? (i.e. once when repayment begins or quarterly)
  • Notify your lender of any change in address, name or repayment problems. Lack of communication is one of the first steps toward delinquency.
  • Borrowers should always explore federal loan options first; private student loans and/or alternative educational loans may have higher interest rates and fees.
  • Be aware that a credit-worthy co-signer may be required. Understand co-signer release options upon repayment.
  • SOU does not have preferred lenders and students may borrow from the lender of their choice. A list of some popular lenders is provided by

To apply for a Private Educational Loan: (NOTE: Begin this process starting August 1 for each new school year)

  1. Go to:

  2. Explore the various lender/loan options

  3. Select lender/loan of your choice and click the "Apply" button

  4. Complete the on-line application with your co-signer. SOU will receive notification from your lender.

From start to finish, allow 4-5 weeks for processing.

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Managing Student Loan Debt

The following links are intended to assist and direct you in the management of your Student Loan Debt. Please make sure your billing address is up-to-date for all entities providing you loans so you receive important notifications in a timely manner. The direct loans servicing agents are there to help the student borrower.

Loan Repayment Calculator

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Avoid Default

If you fail to make a payment on time, you are considered delinquent on your loans. If you do not make payments after a period of time (270 days for Direct Loans) you are considered to be in default.

We would like to help you avoid this situation.. If you're having trouble repaying your loans, you must contact your direct loan servicer. If you do not know which servicer you can find the information at The servicer will explain your options and what program best fits your personal situation

There are some things you should consider to help prevent going into default on your loans:

  • Borrow as little as possible
  • Understand your options and responsibilities with regard to your loans.
  • Keep a list of all your loans, including the lender, type of loan, amount of loan, and the interest rate.
  • Notify your lender promptly if you change your name, address, or return to school.
  • Contact your loan servicer if you are unable to make your loan payments; you cannot receive a loan deferment or forbearance once your loan is in default.
  • Consider a consolidation loan to combine all your educational loans into one loan. This might allow you to extend the term of the loan to reduce your monthly payment.

Being in default on your federal student loans has severe and long-lasting consequences, including the following:

  • The U.S. Department of Education can immediately demand repayment of the total amount due on the loan.
  • The U.S. Department of Education will attempt to collect the debt and may charge you for the costs of collecting.
  • The default will be reported to national credit bureaus. Your credit rating will be damaged, which will make it more difficult for you to make purchases such as a car or house.
  • You are ineligible for further Title IV student aid.
  • You are ineligible for deferments.
  • The Internal Revenue Service can withhold your federal income tax refund.
  • Your wages may be garnished.

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