To be eligible for a loan, you must be at least a half time student (enrolled in a minimum of 1.5 courses per term) and seeking one of the following degrees: M.Div. (all loan types), M.A. (all loan types), M.Th. and Ph.D. (federal loans only).
Graduate Certificate students, Auditors and Non-degree students, including Affiliates, are NOT eligible for student loans.
Luther Seminary participates in the U.S. Dept. of Education Federal Direct Loan Program. The interest rates are fixed (non variable) and are adjusted July 1 of each year. Deferment and forbearance postponement of payment are available along with flexible repayment terms. You are encouraged to meet your financial needs through the Federal Direct Loan Program.
Federal Direct Unsubsidized Loan
Federal Direct Unsubsidized Loans are the primary federal resource for graduate students. Unlike subsidized loans, the borrower is responsible for all interest that accrues from the date of disbursement.
Current Loan Terms & Rates
Interest rates are set annually by federal law. The rate applied to your loan depends on the date of your first disbursement.
| Disbursement Period | Fixed Interest Rate | Upfront Origination Fee |
| July 1, 2025 – June 30, 2026 | 7.94% | 1.057% |
| July 1, 2026 – June 30, 2027 | 8.07% | 1.057% |
- Fees: The 1.057% fee is deducted proportionately from each loan disbursement.
- Repayment: Begins six months after you graduate or drop below half-time enrollment (defined at Luther Seminary as 1.5 courses per term).
Important Legislative Update: H.R. 1
The “One Big Beautiful Bill Act” (H.R. 1) was enacted on July 4, 2025. This legislation introduces significant changes to federal loan limits starting July 1, 2026. Your borrowing limit depends on whether you are classified as a Legacy or New borrower.
- Determining Your Borrower Status
To be considered a Legacy Borrower, you must meet both of the following criteria as of July 1, 2026:
- You are enrolled in your current program of study.
- You have already borrowed from the Federal Direct Loan program for that specific program.
How long does Legacy status last?
You remain a Legacy borrower until you complete your program or for a maximum of 3 years, whichever is shorter. “Duration of program” is defined by the full-time track in the course catalog:
- M.Div. / Ph.D.: 4 Years
- M.A. / M.Th.: 2 Years
Note: If you exceed these timeframes or do not meet the initial criteria, you will be categorized as a “New Borrower” for all subsequent aid.
- Loan Limits by Category
Your borrowing capacity is determined by your status and your specific degree program.
| Borrower Category | Annual Limit | Aggregate (Lifetime) Limit |
| Legacy Students (All Programs) | $20,500 | $138,500* |
| New Borrowers (M.A., M.Th., Ph.D.) | $20,500 | $100,000** |
| Professional Students (M.Div.)*** | $20,500 | $200,000** |
*Includes all Federal Direct Subsidized and Unsubsidized Loans.
**Includes all Federal Loans borrowed at the graduate level.
***Only M.Div. students who are not Legacy borrowers qualify for the “Professional Student” status under H.R. 1.
Total Lifetime Cap: For New and Professional borrowers, the total aggregate limit for all federal student loans (including undergraduate) is $257,000.
Critical Reminders for All Borrowers
- Enrollment Monitoring: We are required to recalculate your loan eligibility at every disbursement. If you drop below your reported credit load or fall below half-time (1.5 courses), your loan may be reduced, potentially leaving you with a balance due to the Seminary.
- Interest Management: Since interest accrues while you are in school, you have the option to make interest-only payments to prevent the balance from growing (capitalizing) before graduation.
Mourer Loan
In addition, Luther Seminary offers the Mourer Loan, an institutional loan program for students planning on entering into ministry after graduation.
- Luther Seminary is the lender.
- The Mourer Loan is only offered in the Fall and Spring semesters.
- 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 Luther Seminary 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: 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: 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: Such ministries with the purpose of sharing the Christian faith in international and domestic settings.
- Non-Profit Employment: Typically these would be social justice, environmental, etc. organizations.
- NOTE: Because this is a non-federal loan, it is not eligible to be included with a Federal Consolidation Loan.
- Interest will not be charged during periods 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.
- Following the completion of each 12 months of creditable service, borrowers should download and complete the Luther Seminary Mourer Cancellation Form and submit to the Financial Aid Office at Luther Seminary.
Application process
If you have not begun the financial aid application process, get started by completing online the Free Application for Federal Student Aid(FAFSA). Enter Luther Seminary’s school code, G02357, on your application and the Office of Financial Aid will automatically receive a copy. (If you know that you will not be applying for student loans, the FAFSA is not required.) You must have completed and submitted your federal income taxes (or indicate you will not be filing) in order to complete the FAFSA.
Once you have been admitted you must complete the Luther Seminary aid application process online.
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. Visit studentloans.gov to complete these required documents.
You can apply for loans even if you receive grants or scholarships from Luther Seminary. In addition, you are not required to accept the full amount of loans for which you have qualified. If you have questions about this, please contact the Office of Financial Aid.
Track federal loans
You can track all your Title IV/federal loans, both undergraduate- and graduate-level, at the National Student Load Data System (NLSDS).
Track private loans
Private or alternative loans taken out while in undergrad or grad school, and only be identified on a credit report. You are able to obtain a free credit report from each of the three credit bureaus once per year at: www.annualcreditreport.com.
Loan counseling
Luther Seminary recommends current students review outstanding loan balances annually and estimate their eventual loan payments. Visit the Loan Counseling page for more details.