FAQs about Student Loans

It's important to understand all the factors when taking out a student loan.

These FAQs can help clear up some major concepts, and if you still have questions feel free to contact the WSU Financial Aid Office at finanacialaid@winona.edu.

The types of loans discussed here include:

  • Subsidized Federal Direct Loans
  • Unsubsidized Federal Direct Loans
  • PLUS Loans

Your school determines the loan type(s), if any, and the actual loan amount you are eligible to receive each academic year.

However, there are limits on the amount in subsidized and unsubsidized loans that you may be eligible to receive each academic year (annual loan limits) and the total amounts that you may borrow for undergraduate and graduate study (aggregate loan limits).

The actual loan amount you are eligible to receive each academic year may be less than the annual loan limit. These limits vary depending on what year you are in school and whether you are a dependent or independent student.

If you are a dependent student whose parents are ineligible for a Direct PLUS Loan, you may be able to receive additional Direct Unsubsidized Loan funds.

The following chart shows the annual and aggregate limits for subsidized and unsubsidized loans.

Year
Dependent Students (except students whose parents are unable to obtain PLUS Loans) Independent Students (and dependent undergraduate students whose parents are unable to obtain PLUS Loans)
First-Year Undergraduate Annual Loan Limit $5,500—No more than $3,500 of this amount may be in subsidized loans $9,500—No more than $3,500 of this amount may be in subsidized loans.
Second-Year Undergraduate Annual Loan Limit $6,500—No more than $4,500 of this amount may be in subsidized loans. $10,500—No more than $4,500 of this amount may be in subsidized loans.
Third-Year and Beyond Undergraduate Annual Loan Limit $7,500—No more than $5,500 of this amount may be in subsidized loans. $12,500—No more than $5,500 of this amount may be in subsidized loans.
Graduate or Professional Students Annual Loan Limit Not Applicable (all graduate and professional students are considered independent) $20,500 (unsubsidized only)
Subsidized and Unsubsidized Aggregate Loan Limit $31,000—No more than $23,000 of this amount may be in subsidized loans. $57,500 for undergraduates—No more than $23,000 of this amount may be in subsidized loans.

$138,500 for graduate or professional students—No more than $65,500 of this amount may be in subsidized loans. The graduate aggregate limit includes all federal loans received for undergraduate study.

Learn more about how much you can borrow.

Before you apply for a student loan, you first need to complete the FAFSA Application.

Once your Financial Aid Application is complete, the Financial Aid Office will provide you with an Official Award Letter in Student e-Services.

Through this online tool, you choose whether to accept your federal loans and how much money you wish to borrow. You do not have to accept the full amount offered if you don’t need it.

Before your loans are processed, all first-time borrowers must complete the Master Promissory Note and entrance counseling. Your loans cannot be processed if you do not complete these required documents.

Make sure that you accept your loans before the semester begins so that your money is disbursed to pay your tuition bill in time.

Direct loan funds can only be held for 3 days so let the Financial Aid Office know if you will be late registering for classes. This will make sure your loan funds are not returned and your loan isn’t cancelled.

There is a 1% loan fee on all Direct Subsidized and Unsubsidized Loans. The loan fee will be proportionately deducted from each loan disbursement.

The interest rates for Direct Subsidized Loans and Direct Unsubsidized Loans are shown in the chart below. The interest rates shown above are fixed rates for the life of the loan.

Loan Type
Borrower Type
Interest rates for loans first disbursed on or after July 1, 2018 and before July 1, 2019
Direct Subsidized Loans and Direct Unsubsidized Loans Undergraduate 5.05%
Direct Unsubsidized Loans Graduate or Professional 6.6%

Learn more about interest rates for Federal Direct Loans.

Your loans will be available each semester according to the disbursement schedule.

Once your bill (charges for tuition, fees, and residence hall) is paid, any aid remaining will be direct deposited to your bank account.

If aid is applied to your bill and there is still an amount owed, you should be prepared to pay that amount with a personal check or other funds.

Direct loan funds can only be held for 3 days, you must notify the Financial Aid Office if you will be late registering so that your loan funds are not returned and your loan cancelled.

After you graduate, leave school, or drop below half-time enrollment, you will have a six-month grace period before you are required to begin repayment.

During this period, you'll receive repayment information from your loan servicer, and you'll be notified of your first payment due date. Payments are usually due monthly.

 Learn more about when you have to repay your loan.

There are several repayment options available that are designed to meet the individual needs of borrowers.

Your loan servicer can help you understand which repayment options are available to you. Generally, you’ll have 10 to 25 years to repay your loan, depending on the repayment plan that you choose.

Learn more about your repayment options.

If you are unable to make your scheduled loan payments, contact your loan servicer immediately. Your loan servicer can help you understand your options for keeping your loan in good standing.

For example, you may wish to change your repayment plan to lower your monthly payment or request a deferment or forbearance that allows you to temporarily stop or lower the payments on your loan.

Learn more about deferment or forbearance options.

Before your loan money is disbursed, you may cancel all or part of the loan at any time by notifying your school. After your loan is disbursed, you may cancel all or part of the loan within certain time frames.

Your promissory note and additional information that you receive from Winona State will explain the procedures and time frames for canceling your loan.

Under certain conditions, you may have all or part of your loan canceled, discharged or forgiven. Find out about loan cancellation, discharge or forgiveness.

Parent PLUS Loan

To receive a parent PLUS loan, you must

  • be the biological or adoptive parent (or in some cases, the stepparent) of a dependent undergraduate student enrolled at least half-time at an eligible school
  • not have an adverse credit history (unless you meet certain additional requirements)
  • meet the general eligibility requirements for federal student aid. (Your child must also meet these requirements.) 

Grandparents (unless they have legally adopted the dependent student) and legal guardians are not eligible to receive parent PLUS loans, even if they have had primary responsibility for raising the student.

Learn more about eligibility for a parent PLUS loan


Graduate PLUS Loan

To receive a graduate PLUS loan, you must

  • be a graduate or professional student enrolled at least half-time at an eligible school in a program leading to a graduate or professional degree or certificate
  • not have an adverse credit history (unless you meet certain additional requirements)
  • meet the general eligibility requirements for federal student aid. (Your child must also meet these requirements.) 

Learn more about eligibility for a graduate PLUS loan.

Parent PLUS Loan

Apply with the online Direct PLUS Loan Application for Parents.

Most schools require you to apply for a Direct PLUS Loan online at StudentLoans.gov, but some schools have different application processes. The StudentLoans.gov site has a list of schools that participate in the Direct Loan Program. When you select your child’s school from the list, the site will tell you if the school has a different application process. In that case, check with the school’s financial aid office to find out how to request a parent PLUS loan.

Before applying for a parent PLUS loan, make sure your student has filled out the FAFSA form.


Graduate PLUS Loan

Apply with the online Direct PLUS Loan Application for Graduate and Professional Students.

Most schools require you to apply for a Direct PLUS Loan online at StudentLoans.gov, but some schools have different application processes. The StudentLoans.gov site has a list of schools that participate in the Direct Loan Program. When you select your child’s school from the list, the site will tell you if the school has a different application process. In that case, check with the school’s financial aid office to find out how to request a parent PLUS loan.

Before applying for a grad PLUS loan, make sure you have filled out the FAFSA form.

A credit check will be performed during the application process.

If you have an adverse credit history, you may still receive a PLUS loan through one of these two options:

  • Obtaining an endorser who does not have an adverse credit history. An endorser is someone who agrees to repay the PLUS loan if you do not repay it. The endorser cannot be the child on whose behalf you are borrowing.
  • Documenting to the satisfaction of the U.S. Department of Education that there are extenuating circumstances relating to your adverse credit history.

You also must complete credit counseling for parent PLUS loan borrowers or credit counseling for PLUS loan borrowers.

If a parent borrower is unable to secure a PLUS loan, the undergraduate dependent student may be eligible for additional unsubsidized loans to help pay for their education. The student should contact the Financial Aid Office if a parent is denied the PLUS loan.

Learn more about adverse credit history for parent borrowers and graduate borrowers.

Parent PLUS Loan

After you receive your parent PLUS loan, you will be contacted by your loan servicer (you will repay your loan to the loan servicer). Your loan servicer will provide regular updates on the status of your parent PLUS loan.

Parent PLUS borrowers are eligible for the following repayment plans:

Parent borrowers can become eligible for an additional repayment plan—the Income-Contingent Repayment Plan—by consolidating their parent PLUS loans into a Direct Consolidation Loan.


Graduate PLUS Loan

You don't have to start making payments until six months after you graduate, leave school or drop below half-time enrollment.

During any period when you’re not required to make payments, interest will accrue on your loan. You may choose to pay the accrued interest or allow the interest to be capitalized (added to your loan principal balance) when you have to start making payments.

Your loan servicer will notify you when your first payment is due.

Learn more about repayment options for the Graduate PLUS loan.