Loans
While gift aid may cover part of your education costs, you may require more assistance. Loans are borrowed funds that need to be repaid. Repayment typically starts at the end of a grace period once you have completed your education. However, interest accrued may have to be repaid earlier.
Types of Loans
What types of loans will I qualify for?
Your FAFSA will be used to determine which federal and institutional student loans you qualify for, and those loans will be included as part of your financial aid offer. With a valid FAFSA submitted, your parent(s) also have the option of applying for a federal parent loan. Beyond federal and institutional loans, you may also want to look at private (alternative) education loan options, which can be used to cover the full cost of attendance, less any other aid you are receiving. Private loans may be an option for students who do not file a FAFSA.
Federal Loans
When you submit the FAFSA, you’ll be considered for Federal Direct Subsidized and Unsubsidized loans. Parents of undergraduates may also be eligible to apply for a Federal Direct Parent PLUS loan. Federal student loans generally offer attractive lower interest rates and more flexible payment options than other loan types.
→ Subsidized loans don’t accrue interest while you’re enrolled at least half-time.
→ Unsubsidized loans begin to accrue interest as soon as the funds are disbursed. Paying the interest while in school can help you avoid it being added to your loan balance (called capitalization).
UVM Loans
UVM may offer institutional loan financing options based on your financial need and other eligibility criteria.
Private Education Loans
Private education loans may be an option for students and families seeking to supplement other financial assistance. However, since federal loan options typically have more attractive interest rates and financing options, we recommend you apply for financial aid and maximize your federal loan borrowing before going through a private education loan. If you choose to go this route, be sure to familiarize yourself with the terms and conditions of your lender of choice.
Tips for Responsible Borrowing
While a UVM education is a worthwhile investment, you and your family will need to think carefully about how much debt you are willing and able to take on. Here are some tips from our experts to get your conversations started:
Understand the Basics: Loans must be repaid with interest. This means you’ll pay back more than you borrow.
Borrow Only What You Need: Even if you are offered a certain loan amount, it doesn’t mean you should borrow the full amount. Review your actual expenses and create a realistic budget. The goal is to borrow only what is truly necessary – ideally, an amount that can comfortably be repaid after graduation.
Compare Loan Features: Consider these questions when evaluating your loan options.
- What are the interest rates? Is it fixed (stays the same) or variable (can change)?
- Is credit required? Does your credit score affect your eligibility or interest rate?
- Is a co-signer needed? If so, is there an option to release the co-signer later?
- Are there any fees? Look for application, origination, disbursement, late payment, or default fees.
- What’s the repayment timeline? How long do you have to repay the loan? Is there a penalty for paying it off early?
- What if I can’t make payments? Are there deferment, forbearance, or income-driven repayment options?
What About Next Year?
The financial aid offer from UVM is determined annually based on filing of the FAFSA, filing of any applicable state grant application, and meeting any specific requirements for renewable scholarships. For eligible students, to be considered for all possible sources of aid, the FAFSA and any applicable state grant application should be filed every year by the priority filing deadline. Merit scholarships or other aid with specific renewal criteria is reviewed annually, generally after each spring semester.
