General Information
Financing Alternatives
Federal Perkins Loan
The Federal Perkins Loan is a campus-administered federal program that provides low-interest loans to exceptionally needy students. Interest does not accrue while the student is enrolled at least half-time or during grace or deferment periods.
Loan Requirements
Federal regulations require that all first time borrowers of Federal Perkins Loans complete Entrance Counseling and a Master Promissory Note (MPN). First time borrowers will receive an email from the Brown University Loan Office with detailed instructions regarding completion of the following requirements:
Federal Perkins Loan Entrance Counseling: Complete Federal Perkins Loan Entrance Counseling on line. This session will give you guidance on managing your student loans both during and after college, and provide information on your Federal Perkins Loan rights and responsibilities.
Federal Perkins Loan Master Promissory Note (MPN): A Perkins Master Promissory Note (MPN) is required before disbursing any Perkins Loan funds to your student account. By signing the MPN, you promise to pay back to Brown University all loan amounts disbursed while enrolled at Brown plus interest accrued. A single MPN covers all Perkins Loans awarded by Brown University for up to ten years.
Students should refer to their financial aid award letter to determine the amount of their annual Perkins Loan. Unless requested otherwise through the Office of Financial Aid, disbursement of any annual amount is generally split across semesters and applied to the student's tuition account.
| Loan Limits | $5,500 Undergraduate per year, $8,000 Graduate per year. Cumulative limits of $11,000 for Undergraduates in years one and two, $27,500 for Undergraduates in years three and four, and $60,000 for graduate/professional students (combined with undergraduate borrowing). |
| Interest Rate | 5% Fixed |
| Grace Period | 9 month original, 6 month post deferment |
| Minimum Repayment | Minimum of $40 per month over a maximum repayment period of 10 years. |
Direct Subsidized and Unsubsidized Stafford Loans
The William D. Ford Federal Direct Stafford Loan Program provides low-interest educational loans to assist students in paying for educational expenses. The Department of Education acts as the lender, providing funds for Stafford and PLUS Loans.
Students may receive a Direct Subsidized Loan, a Direct Unsubsidized Loan, or both for the same academic year. Qualification for a Direct Subsidized Loan is based on financial need, as determined under federal regulations. A student’s need is not a factor in determining eligibility for a Direct Unsubsidized Loan. Students may qualify for a Direct Unsubsidized Loan regardless of their financial need.
Direct Subsidized Loan: The interest on a Direct Subsidized Loan is paid by the federal government while the student is enrolled in school at least half time, and during grace and deferment periods. (NOTE: The Consolidated Appropriations Act of 2012 temporarily eliminates the subsidy during the 6 month grace period on Direct Subsidized Stafford Loans first disbursed on or after July 1, 2012 and prior to July 1, 2014. The interest will continue to be subsidized while the student is enrolled in school at least half time.)
Direct Unsubsidized Loan: The interest on a Direct Unsubsidized Loan continues to accrue even while the student is in school and during grace and deferment periods. Students are responsible for paying the interest that accumulates, either while in school, or having the interest capitalized until entering repayment.
Disbursement of annual Stafford Loan to the student account must occur in equal payments across semesters for which the student is enrolled at least half time.
The Budget Control Act of 2011 made two important changes to the Direct Loan Program:
1. Effective for loans made for periods of enrollment (loan periods) beginning on or after July 1, 2012, graduate and professional students are no longer eligible to receive Direct Subsidized Loans. Direct Subsidized Loans received by any student for loan periods beginning before July 1, 2012 are not affected by this change. (NOTE: It is the beginning date of the loan period that determines whether a graduate student can receive a subsidized loan, not the first disbursement date.)
2. Effective for loans first disbursed on or after July 1, 2012, the law eliminates any repayment incentives to Direct Loan borrowers to encourage on-time repayment of loans, including any reduction in the interest rate or origination fees. As a result, the up-front interest rebate that has been provided to Direct Loan borrowers at the time of loan disbursement will not be offered on any Direct Loan with a first disbursement date that is on or after July 1, 2012. The law continues to authorize the Department to offer interest rate reductions to Direct Loan borrowers who agree to have payments automatically electronically debited.
Loan Amount Limits
Student Level & Dependency Status |
Max Stafford (Subsidized and Unsubsidized combined) |
Max Subsidized |
| Dependent Freshman* | $5,500 | $ 3,500 |
| Dependent Sophomore* | $6,500 | $ 4,500 |
| Dependent Junior or Senior* | $7,500 | $ 5,500 |
| Independent Freshman | $9,500 | $ 3,500 |
| Independent Sophomore | $10,500 | $4,500 |
| Independent Junior or Senior | $12,500 | $5,500 |
| Graduate/Professional** | $20,500 | $0 |
| Medical** | $40,500 | $0 |
* Dependent students may be eligible for additional Unsubsidized eligibility if parent is denied Federal PLUS Loan. ** See additional information above regarding Budget Control Act of 2011 The National Association of Financial Aid Administrators (NASFAA) has published charts detailing the 2012-2013 loan terms. |
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| Origination Fee 2012-2013: Loans first disbursed between July 1, 2012 and June 30, 2013 will be charged a 1% origination fee. 2011-2012: Loans first disbursed between July 1, 2011 and June 30, 2012 will be charged a 1% origination fee. Direct Loans will offer a 0.5% up-front rebate, making the actual fee at disbursement 0.5%. The loan fee/origination fee is subtracted proportionately from each loan disbursement. |
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| Interest Rate 2012-2013: Fixed at 6.8% for all Federal Direct Subsidized & Unsubsidized Stafford Loans first disbursed on or after July 1, 2012. 2011-2012: Fixed at 3.4% for undergraduate Federal Direct Subsidized Stafford Loans first disbursed on or after July 1, 2011. Fixed at 6.8% for graduate/professional Federal Direct Subsidized Stafford Loans and all Federal Direct Unsubsidized Stafford Loans disbursed on or after July 1, 2008. |
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Grace Period 6 months |
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Repayment Options Standard: Fixed monthly payments of at least $50 over a maximum 10 year period. Extended: Fixed monthly payments of
at least $50 over a period of 12 to 30 years. Income Based: Available as of July 1, 2009, available to borrowers who demonstrate a partial financial hardship. Monthly payments are based on your annual adjusted gross income, your family size, and your state. Payments will not exceed 15% of your discretionary income. After 25 years, any remaining debt will be discharged, but you may have to pay taxes on the amount forgiven. |
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Loan Requirements
Federal regulations require that all first time borrowers of Federal Direct Stafford Subsidized and Unsubsidized Loans complete Entrance Counseling and a Master Promissory Note (MPN). First time borrowers will receive an email from the Brown University Loan Office with detailed instructions regarding completion of the following requirements:
(NOTE: To gain access and complete requirements, the student borrower will be required to use their U.S. Department of Education issued Personal Identification Number (PIN). This is the same PIN that you may have used to sign your Free Application for Federal Student Aid (FAFSA). If you do not have a PIN, or can not recall it, please visit the Federal PIN web site at http://www.pin.ed.gov and allow approximately 10 business days to receive it.)
Federal Direct Loan Entrance Counseling: To complete Federal Direct Stafford Loan Entrance Counseling, visit the Direct Loan Servicing Center web site at http://studentloans.gov. This interactive entrance counseling session will provide useful tips and tools to help you develop a budget for managing your educational expenses, and help you understand your loan rights and responsibilities. This session will take approximately 20 minutes to complete.
Federal Direct Loan Master Promissory Note (MPN): To complete a Federal Direct Stafford Loan Master Promissory Note (MPN), visit the U.S. Department of Education Federal Student Aid web site at http://studentloans.gov. When you sign the MPN, you are confirming your understanding that Brown University may make multiple loans for you for the duration of your education (up to ten years) without having to sign another promissory note. You are also agreeing to repay the U.S. Department of Education all loans made to you under the terms of the MPN.
The Brown University Loan Office will receive confirmation from Direct Loan Servicing and the U.S. Department of Education once these requirements have been completed. You should keep copies of the confirmations for your records.
Brown University Loan
The Brown University Loan provides non-federal educational loans made through the University. Interest does not accrue while the borrower is enrolled at least half-time and during the grace period. Students must sign a promissory note at the start of each semester or whenever an adjustment to the loan amount is made. Disbursement of any annual amount awarded is generally split across semesters and applied to the student's tuition account.
| Loan Limits | Established by Financial Aid |
| Interest Rate | 9% Fixed |
| Grace Period | 6 month |
| Minimum Repayment |
Minimum of $25 per month over a maximum repayment period of 10 years. |
Federal Direct PLUS Loan
The Federal Direct PLUS Loan Program is a fixed-rate government loan that allows eligible borrowers who are U.S. citizens, U.S. nationals, or permanent residents, to borrow funds for educational expenses. The borrower must either be a Graduate/Professional student borrowing for their own educational expenses, or a parent borrowing for their undergraduate student's educational expenses. The Program is administered by Brown University Loan Office which works with the U.S. Department of Education to offer this loan. Detailed information regarding the Program can be found on the U.S. Department of Education’s web site at http://www.ed.gov/offices/OSFAP/DirectLoan.
Application Steps:
Step 1: A FAFSA is now required for all Parent PLUS or Graduate/Professional PLUS Loans. Complete the Free Application for Federal Student Aid (FAFSA) at http://www.fafsa.ed.gov.
Step 2: Complete a PLUS Loan Request Form and return to the Brown University Loan Office for processing. The request form is a fillable PDF and must be completed online (typed). Borrowers must print, sign, and return to the Loan Office via fax, email, or mail for processing.
(Request Forms for 2012-2013 academic year will be posted the last week of May 2012)
2011-2012 Graduate/Professional PLUS Loan Request Form
2011-2012 Parent PLUS Loan Request Form
Step 3: Complete the PLUS Loan Master Promissory Note (MPN) online at http://studentloans.gov if this is your first time borrowing a PLUS Loan. The borrower will be required to use their Federal Student Aid Personal Identification Number (PIN). This is the same PIN that you used to sign the FAFSA. If you do not remember your PIN, visit http://www.pin.ed.gov.
The PLUS MPN is designed for borrowers to use as a multi-year note and may be used to process subsequent PLUS Loans for up to 10 years after the original PLUS MPN is signed.
NOTE: If parent borrowers are applying for PLUS Loans for multiple students, they must complete one PLUS MPN for each student.
Complete Step 4 only if you are a Graduate/Professional student: Complete Federal Direct PLUS Loan entrance counseling on-line at http://studentloans.gov. This session will take approximately 20 minutes to complete. You will be required to use your Federal Student Aid Personal Identification Number (PIN).
NOTE: Graduate/Professional students must have applied for their annual loan maximum eligibility under the Federal Subsidized and Unsubsidized Direct Stafford Loan before applying for a Graduate/Professional PLUS Loan.
Eligibility
To be eligible to borrow the Federal Direct PLUS Loan, the student and parent must be U.S. citizens or eligible non citizens, and not in default on prior educational loans. The student must complete the Free Application for Federal Student Aid (FAFSA) in order for the PLUS Loan to be processed. The student must be enrolled at least half-time in a degree program, and making satisfactory academic progress.
Borrowers must meet federally defined creditworthiness standards for approval. If the borrower is denied, they may request an endorser to the loan. Upon PLUS denial, families may also contact the Brown University Office of Financial Aid to inquire about additional Federal Direct Unsubsidized Loans in the student’s name.
Loan Amounts
The maximum loan amount that may be borrowed may not exceed the student's cost of education, minus other estimated financial assistance for that student. Loans for the full academic year will be disbursed directly to the University in two equal installments, half for each semester.
Rates and Fees
There is an origination fee of 4% that is deducted proportionally from each loan disbursement.
For all PLUS Loans made after 7/1/06, a fixed interest rate of 7.9% is applicable.
Repayment
Repayment begins within 60 days after the loan is fully disbursed. For loans disbursed after 7/1/08, borrowers have the option of deferring repayment based on the enrolled status of the student on whose behalf a Federal PLUS Loan was obtained. Specifically, PLUS Loan borrowers may defer repayment while the student on whose behalf the loan was obtained is enrolled on at least a half-time basis, and during the six-month period after the dependent student ceases to be enrolled on at least a half-time basis.
Interest will accrue during the deferment period. The borrower will be sent quarterly interest statements and will have the option of paying the interest as it accrues. Unpaid interest will be capitalized and due at the end of the deferment period.
Borrowers must contact their servicer to request deferment.
Private education loans are available through private agencies and banks. These loans are based on applicant creditworthiness and not a student's financial need. For more information, visit the Financial Aid Office web site.
Installment Payment Plan
Installment Payment Plans are administered by the Bursar's Office. Click here to obtain more information.
Tuition Pre-Payment Plan (TPP) - Undergraduate Students
Parents may prepay two, three, or four years of undergraduate tuition at the rate in effect when the student enters the plan. The cost of the plan will be based on the upcoming year's tuition rate. By prepaying undergraduate tuition, families avoid future tuition increases. Fees such as room, board, and other miscellaneous charges cannot be financed via TPP.
TPP opens each year on March 1 and closes on August 1. Participants may only enter the Tuition Prepayment Plan within this designated time. Families interested in opening a plan beginning Fall 2012 must complete a Tuition Prepayment Plan Agreement and send payment by August 1, 2012.
Steps to initiating a TPP
- Complete a TPP Agreement. Download the form from the link below. Please type all information so that it is legible.
- Return completed form along with payment for respective number of TPP years to Brown University Financial Services. Please note that the form must be signed by the plan participant and must be notarized. Faxed or scanned copies are not acceptable. If payment is to be sent separate from the agreement, the agreement must be received first, along with a letter indicating details where funds are expected from (i.e via wire or a third party).
- A letter confirming enrollment in the TPP will be sent to all participants no later than August 1, 2012 along with a copy of the signed agreement.
Brown University Tuition Prepayment Plan Agreement
Questions regarding TPP should be directed to Financial Services.
Note: Families interested in participating in Tuition Prepayment may want to seek the advice of a tax counsel / accountant about potential tax implications (i.e. withdrawal of funds from an education savings plan).
