Family Financing Options
Most families need to go beyond the direct payment to the college or the payment plan to help meet their financial responsibility for the cost of the Holy Cross education. We advise first and foremost that all families maximize their eligibility for all federal loans in the form of the Federal Direct Stafford Loan and the Federal Direct Parent PLUS Loan before using any other credit based financing.
The Federal Direct PLUS Loan
The Federal Direct PLUS Loan is a parent loan product where the Federal Government is the lender. The interest rate for the 2008-2009 academic year is set at a fixed 7.9% with options to enter immediate repayment or to defer repayment of interest and principle until after the student graduates or ceases to be enrolled at least half time. There is a 4% origination default fee with a 1.5% upfront rebate at the time of disbursement for assumed on-time payments. The net result is that the loan proceeds that are credited to the student account are reduced by 2.5% of the principle. For additional information on the Federal Direct PLUS Loan please print the Federal Direct Plus Loan fact sheet (.pdf) and the Parent Basics brochure (.pdf).
To apply for a Federal Direct Plus Loan print the instructions (.pdf) then print the Holy Cross Plus Loan request form(.pdf) that needs to be completed and mailed or faxed directly to the financial aid office. If you did not complete a FAFSA to apply for federal student aid you will need to print the Statement of Educational Purpose document and send it with your application (attached). The application will allow the College to originate the loan with the Federal Government who will perform a credit check to ensure that the borrower does not have a negative credit history. Once the parent borrower is notified of the loan approval you will be directed to the Direct Loan web site to sign a Master Promissory Note (.pdf) for additional information on the master promissory see the attached e-mpninformation sheet (.pdf).
Alternative Loans
Alternative Loans are loans not guaranteed by the Federal Government. The borrower (either the parent or the student) may borrow such a loan through various participants such as banks, credit unions, or savings and loan associations. There are many different types of alternative loans for different types of borrowers. Alternative loans are not need-based; rather they are based on creditworthiness. We encourage our families to pursue federal financial aid before considering private educational loans. There are many student/family situations where a private loan is viewed as a preferred alternative. Holy Cross has provided BorrowSmart with a list of private lenders that our families have done business with in the past. Of course, you may use any private lender of your choice for your non-federal educational loans and are not required to restrict yourself to the College’s list of selected lenders on the BorrowSmart website.
The Massachusetts Educational Finance Authority (MEFA)
The Massachusetts Educational Finance Authority (MEFA) has in the past played a significant role in providing our families with educational loan products please read this most recent letter that addresses the availability of a MEFA loan product (.pdf) for the 2008-2009 academic year.