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Self-Help: Student Loans
Amherst College has replaced all initially packaged, need-based 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 the student income contribution, or replace work in the financial aid package. 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 Loans
There are both subsidized and unsubsidized Federal Direct Stafford Loans. The federal government pays the interest on subsidized loans while the student is in college. 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 not need-based and may be borrowed for as much as the difference between the statutory loan limits (cited below) and the amount of subsidized Federal Direct Stafford Loan. 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. Federal Direct Stafford Loans are administered by Amherst College.
A student may borrow a Federal Direct Stafford Loan (either subsidized, unsubsidized, or a combination) of as much as $3,500 as a first-year student, $4,500 as a sophomore, and $5,500 a year as a junior or senior. Dependent students may borrow an additional unsubsidized loan of as much as $2,000 a year. The cumulative loan maximum for dependent students is $31,000, of which no more than $23,000 can be subsidized.
Independent students may borrow additional unsubsidized loans of as much as $6,000 as a first-year student or sophomore, and as much as $7,000 as a junior or senior. The cumulative maximum for independent students is $57,500, of which no more than $23,000 can be subsidized.
There is a federal origination fee of 1.051 percent for loans disbursed on or before December 1, 2013, which is subtracted from the loan amount before the remaining proceeds are credited to the student account. Loans disbursed on or after December 1, 2013 will have an origination fee of 1.072 percent.
The interest rate on the Subsidized Federal Direct Stafford Loans is 3.86 percent as of July 1, 2013. The federal government pays the interest on subsidized loans while you are in college.
The interest rate on Unsubsidized Federal Direct Stafford Loans is fixed at 3.86 percent. Unsubsidized loans accrue interest from the date of disbursement. Interest may be either paid as it accrues or may be deferred and capitalized (i.e., added to the loan principal) while you are in school and for a six-month “grace” period after graduation or termination of studies.
To request a Federal Direct Stafford Loan, please complete and submit the Student Loan Request Form to the Office of Financial Aid. Federal statute requires that all students receiving a Direct Loan participate in an Entrance Interview and complete an electronic Master Promissory Note (eMPN) before receiving loan proceeds. You can complete the Entrance Interview on-line at the U.S. Department of Education website (https://studentloans.gov).
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 $5,500 a year, and no more than $20,000 may be borrowed as an undergraduate. The interest rate is fixed at 5 percent. 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 percent 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.
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.