Self-Help: Student Loans

Beginning with the 2008-2009 school year, Amherst College will replace all initially packaged student loans with grant assistance. This change in policy is intended to help middle income families applying to Amherst. Additional information is available here.

Students may still decide to borrow loans to purchase a computer, replace student income contributions, or replace work in the financial aid packaage. All student loan programs provide for long-term repayment at moderate interest rates.  The repayment period may be as long as ten years and a monthly minimum payment is required. Repayment of principal is not required while a student is enrolled at Amherst or another recognized post secondary institution.  Repayment may be deferred for graduate school attendance, for service in the military, Peace Corps, Action programs such as Vista, and other social service agencies. Deferments may also be approved for temporary total disability, or unemployment. The loan will be canceled in the event of death or total permanent disability. Other details are outlined below.

Federal Direct Stafford/Ford Loans

This federal program allows a student to borrow as much as: $3,500 in the first year of study, $4,500 in the second year, $5,500 a year for subsequent undergraduate study (to a maximum of $23,000).

The interest rate is fixed at 6.80% for loans disbursed after July 1, 2006. (For loans disbursed prior to 2006, the rate is variable and set annually; currently, 6.62% in-school rate and 7.22% repayment rate through June 30, 2008, with a maximum rate cap of 8.25%).

There is a net 1% origination fee (2.5% less a 1.5% rebate).

There are both subsidized and unsubsidized Federal Direct Stafford/Ford Loans. The federal government pays the interest on subsidized loans while the student is in college and for six months after graduation or termination of studies. The subsidized loan program is need-based; the amount that may be borrowed is limited to the difference between the student expense budget and all other financial aid received. Unsubsidized loans are non need-based and may be borrowed for the difference between the statutory loan limits (above) and the amount of subsidized Federal Direct Stafford/Ford Loan. Again, all aid resources (including parent loans) cannot exceed the student expense budget. Interest on unsubsidized loans is charged from the disbursement of the loan funds. Students have the option of paying the interest as it accrues, or allowing it to be capitalized (i.e., added to the loan principal at the start of repayment). Federal Direct Stafford/Ford Loans are administered by Amherst College.

Federal statute requires that all students receiving a Direct Loan must attend an Entrance Interview before receiving loan proceeds. You can now complete the Entrance Interview on-line at the U.S. Department of Education. Submit your completed form to the Office of Financial Aid.

Federal Perkins Loans

This federal program provides loans to students with demonstrated financial need, and is administered by Amherst College. The maximum that a student may borrow is $4,000 a year, and no more than $20,000 may be borrowed as an undergraduate. The interest rate is fixed at 5%. There is no repayment required and no interest charged while a student is in college and for nine months after graduation or termination of studies. The program has special cancellation provisions outlined in the publication Notes Concerning your Financial Aid Award for additional information.

Amherst College Loans

The College provides loans from its own funds for a limited number of international students and for others whose borrowing requirements exceed federal loan limits or who do not qualify for federal loan programs. The interest rate is 5% for subsidized Amherst College Loans. The grace period, deferment, and cancellation provisions of the Federal Direct Stafford/Ford Loan program apply to Amherst College Loans. In some instances unsubsidized loans are offered. Interest is charged from the making of an unsubsidized loan, although the borrower has the option of paying the interest as it is charged or allowing it to accumulate and be capitalized (i.e., be made a part of the loan principal) at the beginning of the repayment period. In addition, there are special cancellation provisions in certain circumstances for international students from economically underdeveloped countries.

Short-Term Loans

Short-term loans may be made to any Amherst student for emergency purposes and in case of financial need not covered in the usual procedures for long-term loans. The Morris Morgenstern Student Loan fund and the New England Society loan fund provide a limited number of interest-free short-term loans.  Other, interest-bearing short-term loans are available through the College's Student Loan fund.