Loans

Luther Seminary participates in the U.S. Dept. of Education Federal Direct Loan Program which includes Perkins, 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), DMIN, 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.

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.

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 up to $4000 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.studentaid.gov.

Federal Direct Subsidized/Unsubsidized Stafford Loans 

Direct Subsidized Loan.

Direct Subsidized loans were discontinued for Graduate students effective July 1, 2012

Direct Unsubsidized Loan.

This is a non-need based, federal loan.  The individual eligibility is limited to a maximum amount of $20,500 per year.   Aggregate limit is $138,500 from all schools minus any subsidized loan funds.  These loans qualify for various deferments, forbearance, loan consolidation and also have loan cancellation provisions.  For more information on these topics, please see www.studentaid.gov.

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.

The Interest rates on all federal student loans is determined by federal law. While interest rates differ based on the first disbursement date of the loan, the rate will remain in effect for the life of the loan. Rates are as follows:

  • First disbursement was made on or before 6/30/2013 will bear an interest rate of 6.8%.
  • First disbursement date was made between 7/1/2013 and 6/30/2014 will bear an interest rate of 5.41%.
  • First disbursement date will be made between 7/1/2014 and 6/30/2015 will bear an interest rate of 6.21%.

These loans will have origination fees of 1.051%.

Repayment of the Unsubsidized loan begins six months after the student graduates or ceases to be enrolled at least half time, 1.5 courses at Luther Seminary. 

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.  These loans qualify for various deferments, forbearance, loan consolidation and also have loan cancellation provisions.  For more information on these topics, please see www.studentaid.gov.

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.

The interest rates on all federal student loans are determined by federal law.  Rates are as follows:

  • First disbursement was made on or before 6/30/2013 will bear an interest rate of 7.9%.
  • First disbursement date was made between 7/1/2013 and 6/30/2014 will bear an interest rate of 6.41%.
  • First disbursement date will be made between 7/1/2014 and 6/30/2015 will bear an interest rate of 7.21%.

These loans will have origination fees of 4.204%.

Repayment of the Grad PLUS loan begins six months after the student graduates or ceases to be enrolled at least half time, 1.5 courses at Luther Seminary.  

Federal Direct Graduate PLUS loans are available to graduate students if they are credit worthy applicants.  Not having credit 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.

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.

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