Loans Frequently Asked Questions
The following questions and answers are designed to assist you with educational borrowing.
How do I apply as a student for a Federal Direct Loan?
If you wish to borrow a Federal Direct Loan (FDL), you must have completed the Free Application for Federal Student Aid (FAFSA) for the academic year in which you wish to borrow. The FAFSA results must be sent to us (federal FAFSA code: 002918), and we will then use your results and other financial data to determine your FDL eligibility.
You must complete also the Master Promissory Note (MPN) on the federal government's website. The online MPN needs to be completed only once during your Davidson career. However, you must notify us of the amount of FDL you wish to borrow each year. Please complete the Direct Stafford Loan Response Form and Application, found in our Financial Aid Forms page, to indicate the amount of FDL you wish to borrow, and the loan period this amount will cover.
Borrowers must also complete the online loan entrance counseling before proceeds can be released.
You can find the appropriate documents on our Financial Aid Forms page.
How much of my loan amount will be subsidized or unsubsidized?
We will use your FAFSA results, your cost of attendance, and any aid you are receiving (such as grants, work, outside scholarships, etc.) to determine what portion of your FDL qualifies to be subsidized (interest paid by the federal government while you are enrolled) or will be unsubsidized (the borrower is responsible for the loan's interest while enrolled). Some borrowers qualify to have part of their loan be subsidized and part be unsubsidized.
How much FDL can I borrow in an academic year?
As a student, you may borrow up to the following academic year maximums (set by the federal government):
- First-year students $5,500
- Sophomores $6,500
- Juniors $7,500
- Seniors $7,500
In those instances where parent borrowers are unable to secure a Federal PLUS Loan, you can apply for up to an additional $4,000 (first-year and sophomores) or $5,000 (juniors and seniors) unsubsidized FDL.
How do I apply as a parent for a Federal Direct PLUS Loan?
Parents wishing to borrow only a Federal Direct PLUS Loan (PLUS) are not required to complete loan entrance counseling but must complete a FAFSA. Additionally, they must complete the PLUS MPN, as well as a PLUS application (which includes a required credit check) on the federal government website. The PLUS MPN needs to be completed only once during your Davidson career.
How much PLUS can I borrow in an academic year?
Parents can borrow up to the entire cost of attendance for an academic year, minus any financial aid the student is scheduled to receive.
What are the fees and interest rates on both student FDL and PLUS?
Fees and interest rates are set annually by the federal government, and specific fee and interest rate information is provided on the federal government website.
Are there non-federal loan options available?
Private, alternative education loans are available to student borrowers if federal loan options are either not available or families feel they need additional financing. These loans typically require you, as a student borrower, to secure a creditworthy co-signer. You and your parents should exhaust all federal loan options before utilizing this type of loan to assist with educational expenses.
How do I find private, alternative education lenders?
There are numerous lenders of these types of loans. We will certify any private, alternative loan application presented to us. The Higher Education Opportunity Act of 2008 restricts institutions of higher education from recommending specific lenders of this type of loan. To find a private, alternative education lender, search online for "private student loan" or "private educational loan."
Are there other funding options?
Yes, there are other possible funding sources your family might want to consider. Learn more about other funding sources.