Loans
Luther Seminary participates in the U.S. Dept. of Education Federal Direct Loan Program which includes Perkins, Subsidized/Unsubsidized Stafford and Graduate PLUS loans. To be eligible for a loan, you must be at least a halftime student and seeking one of the following degrees: M.Div. (all loan types), M.A. (all loan types), M.S.M. (all loan types), M.Th. and Ph.D. (federal loans only).
You will be required to complete the Free Application for Federal Student Aid (FAFSA) as well as the Luther Seminary Financial Aid Application for all loans. You may also be asked to submit additional forms, but please do not submit any additional documents unless specifically requested to do so by the Financial Aid Office.
Federal Perkins Loan
This is a need-based federal loan, but Luther Seminary is the lender. Program funds are limited and loan availability is subject to annual funding. Individual eligibility is limited to $3000 per year/$40,000 aggregate from all schools. This is a fixed-rate, 5% loan. The government will pay all interest during the in-school period and through the end of the 9 month grace period.
This loan qualifies for various deferments, forbearance, loan consolidation, and also has loan cancellation provisions. For more information about these topics, please see www.finaid.org/loans.
Federal Direct Subsidized/Unsubsidized Stafford Loans
Both the Subsidized/Unsubsidized loans have a 6.8% fixed interest rate with a 6 month grace period after the qualifying in-school period. These loans qualify for various deferments, forbearance, loan consolidation and also has loan cancellation provisions. For more information on these topics, please see www.finaid.org/loans. These loans will have origination fees. All first time borrowers at Luther Seminary are required to complete an electronic application and promissory note (eMPN) and online Direct Loan program Entrance Counseling before loan proceeds can be disbursed. Please visit www.studentloans.gov to complete these required documents.
Direct Subsidized Loan.
This is a need-based, federal loan. The individual eligibility is limited to a maximum of $8500 annually/$65,500 aggregate from all schools. The loan amount could be less, based on the results of the FAFSA. The government will pay all interest during the qualifying in-school period and through the 6 month grace period.
Direct Unsubsidized Loan.
This is a non-need based, federal loan. The individual eligibility is limited to a maximum amount of $20,500 minus any Subsidized loan funds. Aggregate limit is $138,500 minus the subsidized loan funds. All interest that accrues on this loan is the responsibility of the borrower; the government does not pay any interest on this loan.
Interest will accrue from the date of disbursement and on the outstanding principal balance. You are not required to pay the interest, but any unpaid interest will accrue and be added onto the principal balance (capitalized) at the end of the grace period. The principal balance will increase. Luther Seminary recommends that you pay all or any portion of the interest while you are in school.
Please note: The Direct Subsidized Stafford loan will be discontinued effective July 1, 2012 for graduate students. All Stafford loan eligibility will be in the Unsubsidized loan and the maximum loan amount will remain $20,500. Loan fees will increase from .5% to 1.5%.
Federal Direct Graduate PLUS Loans
This is a non-need based, federal loan. The individual eligibility is limited to the Cost of Attendance (as determined by the Financial Aid Office) for a year minus any other financial aid. All interest that accrues on this loan is the responsibility of the borrower; the government does not pay any interest on this loan.
The interest rate is a fixed-rate of 7.9% and will accrue from the date of disbursment on the outstanding principal balance. You are not required to pay the interest, but any unpaid interest will accrue and be added onto the principal balance (capitalized) when the loan enters repayment. The principal balance will increase. Luther Seminary recommends that you pay all or any portion of the interest while you are in school. This loan also has 4% origination fees
Grad PLUS loans enter repayment as soon as they are fully disbursed; there is not a grace period The first payment is due within 60 days of the final disbursement, however, you may defer payments while you are in school at least half time. For any Grad PLUS disbursed after July 1, 2008, you may also defer payments for an additional 6 months after the qualifying in-school period.
This loan differs from the Stafford Loans in that you must pass a credit check to qualify. Having no credit is will not disqualify you from obtaining this loan, only an adverse credit history may prevent you from pursuing this loan. If you do not pass the initial credit check, you will have the option to appeal the credit decision or use a co-signer to qualify for the loan. The credit check will be valid for 90 days. It is recommend that you view you own credit report before applying for this loan. This can be done at www.annualcreditreport.com.
These loans qualify for various deferments, forbearance, loan consolidation and also has loan cancellation provisions. For more information on these topics, please see www.finaid.org/loans. All first time borrowers at Luther Seminary are required to complete an electronic application and promissory note (eMPN) and online Direct Loan program Entrance Counseling before loan proceeds can be disbursed. Please visit www.studentloans.gov to complete these required documents.
Mourer Loan
This loan is a non-federal, institutional loan offered by Luther Seminary. Because this is a non-federal loan, it is not eligible to be included with a Federal Consolidation Loan. Depending on a student's debt level and other benefits of the federal loan program, this might make a difference on whether you want or should apply for this loan. The funding is limited so this is a first come, first served loan. In order to be considered for this loan, you must apply early (Jan-Feb) and check the box on the Luther Seminary Financial Aid Application requesting consideration for the Mourer Loan.
This is a fixed-rate 5% loan with all the same deferment and cancellation options available to federal loan borrowers, using the same criteria. The attraction of this loan is that we will cancel up to 50% of the original loan balance for service in "ministry". We will cancel 10% of the original balance per year for the first 5 years of ministry. Ministry is defined (but not necessarily limited to) as the following:
- Ordained ministry - is defined as service under call to a congregation or authorized ministry, subject to oversight by a recognized denominational body. Such ministries may include parish ministry, chaplaincy in specialized settings such as health care chaplaincy and pastoral counseling; campus ministry, spiritual direction, camps and missionary fields, and in synod, regional, and church wide offices.
- Lay ministry - is defined as service under call to a congregation or authorized ministry, subject to oversight by the congregation and/or a recognized denominational body, or service under the supervision of a congregation or agency. Such ministries may include work within a congregational setting or in a church-sponsored agency including youth ministry, chaplaincy, diaconal service, social work, advocacy, and related efforts.
- Missionary Ministry - is defined as service under call to a recognized denominational body or church agency for the purpose of sharing the Christian faith in international and domestic setting.
Interest will not be charged during period of enrollment or during acceptable deferment periods. Repayment will begin on the earlier of: (1) the nine month anniversary of your graduation from the Seminary; or (2) if you leave the Seminary for any reason other than graduation, the six month anniversary of the last day you were enrolled at least half time.
If you are experience temporary financial hardship and do not fit one of the allowed deferments, you may be able to temporarily postpone or reduce the amount of your monthly payment by requesting forbearance. During forbearance, interest will continue to accrue on the loan at your expense. Forbearance is granted at the discretion of the Seminary.
If you have any questions about whether a certain type of ministry would be eligible, you should check with the Office of Financial Aid prior to receiving the loan.
Short Term Loan
If you need emergency funds or additional, temporary assistance, the Short Term Loan is available for amounts up to an aggregate of $1000. This is a no-fee, no-interest loan that must be repaid within 120 days of receipt of the funds. The applications are available online, in the Business Office and in the Office of Financial Aid. The form must be submitted to the Business Office by noon on Wednesday in order for a check to be issued by Friday of the same week. The short term loan check will then be mailed to the student at the address provided on the Short Term Loan request form. Because of staffing/scheduling changes, this schedule could change without notice. Get the Short Term Loan form now.
NATIONAL STUDENT LOAN DATA SYSTEM (NSLDS)
The National Student Loan Data System (NSLDS) is the U.S. Department of Education’s central database for student aid. NSLDS provides a centralized, integrated view of Title IV forms and grants that are tracked thought their entire cycle, from approval through closure.
You can use the website to make inquiries about your Title IV/federal loans and/or grants. The site displays information on loan and/or grant amounts, outstanding balances, loan statuses, and disbursements, and current holders/servicers of all your federal, financial aid. You should familiarize yourself with this website, utilizing the information available until your loans are paid in full.
The website to access NSLDS is www.nslds.ed.gov and can be accessed 24 hours per day, 7 days per week. In order to use the NSLDS Student Access Website, you will need to provide your Social Security number (SSN), the first two letters of your last name, your date of birth, and your federal, four-digit, PIN number (which is the same pin number used to complete your FAFSA form). If you don’t know your PIN, a duplicate PIN can be obtained at www.pin.ed.gov.
