304 Student – Loan Program
Fiscal Operations Manual
Section 300: Accounts Receivable
Oregon State University Institutional Loans are funded and administered by OSU Office of Business Affairs Student Loan Office after being awarded by the Office of Financial Aid and Scholarships. The Office of Business Affairs disburses funds.
The Federal Perkins Loan is a need-based, university administered federal loan with a 5% interest rate. Selection of recipients is handled by the Office of Financial Aid and Scholarships in accordance with federal regulations. The government pays the interest while the student is enrolled at least half time. Repayment begins nine months after graduation, withdrawal, or if attendance drops below at least half-time enrollment. A student must sign a promissory note in order to receive the loan funds. The amount listed on the award is the total amount that may be borrowed. Prior to the start of the term, the student will be notified by the OSU Business Office regarding procedures for signing the promissory note and collecting borrower information. The Office of Financial Aid and Scholarships sends the promissory note to the student with enclosures from the Office of Business Affairs. The OSU Office of Business Affairs Student Loan Office is the holder of the signed promissory note. Loan funds are disbursed as a credit to the student’s billing account. See Federal Programs on the Financial Aid & Scholarships website for further information.
Federal Direct Ford Loan funds come directly from the U.S. Department of Education, and are funded and administered by the Department of Education Loan Servicing Center. The Department of Education establishes a loan origination fee that is assessed against the loan and is deducted from the total loan proceeds. This deduction is reflected in each disbursement. The Office of Financial Aid and Scholarships is responsible for the selection of the recipients in accordance with federal regulations. OFAS obligates loans, reports to the Department of Education, and assures that the loan program is administered correctly.
The Unsubsidized Federal Direct Ford Loan is non-need-based with the student being responsible for paying the interest while enrolled. Students may choose to defer the interest by having it added to the principal, which is called capitalization. The loans have a variable interest rate. Students must be enrolled at least halftime and repayment begins six months after graduation, withdrawal, or if the student drops below half-time enrollment.
The Subsidized Federal Direct Ford Loan is need-based with the government paying the interest on the loan while the student is enrolled. The loans have a variable interest rate. Students must be enrolled at least halftime and repayment begins six months after graduation, withdrawal, or if the student drops below half-time enrollment.
The FDPLUS is a federal loan borrowed by the parent on behalf of a dependent student to assist with educational expenses. The FDPLUS is a non-need based loan at a variable interest rate capped at 9%. Interest is charged on the loan to the borrower from the date the first disbursement is made until the loan is paid in full. Repayment generally begins within 60 days after the final loan disbursement. A 4% loan fee is deducted proportionately by the federal government each time a loan disbursement is made. See Federal Programs on the Financial Aid & Scholarships website for further information.
When students complete their coursework at OSU and are ready to graduate, the staff of the Office of Business Affairs Student Loan Office sends a letter to the student requesting borrower information, providing a repayment schedule for the loan, and also providing a rights and responsibilities pamphlet. The student borrower is responsible for keeping OSU informed of all address changes during the entire repayment period. OSU reports all loans to the credit bureau.
A student loan hold is placed when a borrower is delinquent on a loan that is collected at OSU (Federal Perkins loan, OSU institutional loan, OSU Pharmacy loan). The borrower is not allowed to register for classes and cannot get a transcript until the past due amount has been taken care of.