Financial Aid for Graduate School

Financial Aid for Graduate School

Graduate students who would like financial aid will need to complete the Free Application for Federal Student Aid (FAFSA), which can be done online at www.fafsa.ed.gov. Because some of the questions might be confusing, additional guidance is provided below.

Under the student status questions, the applicant is asked to answer “At the beginning of the school year, will you be working on a master's or doctorate program?”

• You should answer "YES" to this question.
• By answering yes to one or more questions in the student status section, you will automatically be considered an independent student.
• You will receive a pop-up box asking if you wish to provide parental information on the FAFSA - it will indicate that some schools require this information.
• Lock Haven University does not require parental information for students seeking a master's degree.
• If you are submitting your FAFSA to other schools, you should check with their Financial Aid Office to determine if you need to put parental information on your FAFSA.

There is a question referring to your grade level and another question on the degree you are seeking: “Degree or Certificate you will be working on during the upcoming year.”

• You will answer Graduate or professional degree

When asked about your grade level the options available are:

• You will answer Graduate Student (first year or after first year)

Awarding of Financial Aid/Loans

Students seeking a Master's Degree, who have submitted a FAFSA, are typically only eligible for loans. Once a student receives his/her first bachelor's degree, he or she is no longer eligible for federal or state grants.

Each student who has a FAFSA on file and is enrolled at LHU will receive a financial aid award letter that lists the aid the student is eligible. This can also be viewed online on the myHaven site. Because graduate students are not eligible for grants, typically all that is listed on the award letter is loans.

As a Graduate Student, you are eligible for up to $20,500 for one academic year in Unsubsidized Loan funds.

To qualify for Direct Stafford Loans:

• You must be enrolled for a minimmum of three credits in a degree-seeking graduate program each term to qualify for the Federal Stafford Loan. Half time for most programs is 3 credits per semester.
• Graduate loans cannot be processed for certificate programs. 
• You must be maintaining Satisfactory Academic Progress. For more information about Satisfactory Academic Progress, please review the Satisfactory Academic Progress Document.
• You must not be in default of any other federal loan to qualify for federal aid.
• Have completed a FAFSA for the academic year in which you are applying for the loan.

Please Note: If it is the student’s intention to receive a Federal Direct Stafford Loan, he or she must complete an Entrance Counseling session and Master Promissory Note before the funds will be sent to LHU. These steps can be completed at https://studentloans.gov. Even if a student has completed these steps as an undergraduate student, all students must have a current MPN on file and have completed entrance counseling for LHU.

For more information about Direct Stafford Loans, please review the Federal Direct Student Loan Document.

Graduate PLUS Loans

If the Federal Direct Stafford Loan is not enough to cover your expenses, there is additional funding for which a graduate student can apply. It is the Graduate PLUS Loan.

The Federal Direct Graduate PLUS Loan is a fixed interest loan program that enables graduate students to borrow directly from the U.S. Department of Education to help pay for their educational expenses. The Program is administered by the Financial Aid Office, which works with the U.S. Department of Education to offer this loan. This loan is only available to U.S. Citizens and permanent residents.

With a Grad PLUS Loan you may borrow up to the full cost of attendance less other financial aid. The interest rate is fixed at 7.9%. There is a 4% loan origination fee deducted from the loan by the U.S. Department of Education. The Grad PLUS Loan is credit based and requires credit approval. Credit approval is valid for 90 days. Your credit is evaluated every time you request a new loan unless you have had a credit decision within the preceding 90 days.

This loan has many benefits such as a fixed interest rate, high credit approval rate and streamlined application process. Loan payments can be deferred while in school at least half time and the loan has flexible repayment options. As part of the Federal Direct Loan Program, this loan would also conveniently become part of your loan account that contains your Federal Direct Subsidized/Unsubsidized Loan(s), thus reducing your number of lenders.

To apply for a Graduate PLUS Loan, students must have a complete FAFSA on file. Next, they should submit an application at https://studentloans.gov/myDirectLoan/index.action. After the application is submitted, the student will receive an immediate response as to whether or not they have been approved. If approved, the student will need to complete a Master Promissory Note for the Graduate PLUS loan. It is important to complete all three of these required steps, or the loan will not process. Normal processing timeframes for PLUS loans is approximately 2-3 weeks.

Alternative Loans

Alternative Loans are educational loans that help students who may be in need of further financial assistance for educational costs. Alternative Loans are available through private lenders and institutions. Many of these loans can be deferred. Students should pay special consideration to fees and interest rates when exploring various loan products. The Alternative Loan is credit based and will require credit approval. All students who have been approved to receive a loan of this nature will have the information sent to LHU electronically. One of the Financial Aid Counselors will review the information within two weeks and certify the loan, basically approving the loan information for the lender. Once the loan is certified the lender of the loan will continue to process the loan and send the funds to LHU’s business office. The Student Accounts office will see that the funds are applied to the student’s account and if overpaid, process a financial aid refund accordingly. Because of all of the steps required in this process, please allow 4-6 weeks for processing.

For more information regarding Alternative Loans, please refer to the Alternative Educational Loan Document.

Loan Comparison: PLUS vs. Alternative

The graduate PLUS loan presents an interesting alternative to private education loans. Here are some of the key differences:

Eligibility

Eligibility for private education loans typically depends on your debt-to-income ratio and FICO score. Eligibility for the PLUS Loan does not depend on these factors. You can get a PLUS loan even if you have a bad credit score, so long as you don't have an adverse credit history (i.e., no more than 90 days late on any debt and no defaults, bankruptcies or other adverse action on any Title IV debt).

Interest Rates

Most private education loans are variable rate loans with an interest rate that depends on the borrowers (and/or co-borrower's) credit score. The PLUS loan has a fixed interest rate of 7.99% that does not depend on your credit score. Generally, the PLUS loan will be less expensive than most private student loans.

Loan Fees

The loan fees on a PLUS loan total 4.004%, while the loan fees on private education loans depend on your credit score and can be as high as 11%.

Consolidation

Grad PLUS loans can be consolidated with other federal education loans, such as the Stafford and Perkins loans. Private loans cannot. Also, the Grad PLUS loan balance will count toward the economic hardship deferment, while private education loans do not.

Borrower

Both the Grad PLUS and private student loans are student obligations. With the Grad PLUS a parent may be added to the loan as an endorser if the student has an adverse credit history or if the parent wants to help pay for the loan. With private student loans the parent can cosign the loan if the student has bad credit or if they have better credit (cosigning often reduces the interest rates and fees).

FAFSA

Graduate and professional students who borrow the Grad PLUS loan must submit the Free Application for Federal Student Aid (FAFSA) and max out the Stafford Loan first. Private student loan borrowers do not need to submit the FAFSA.

Internship Aid Exception

It is LHU’s policy that 40 working hours equals 1 semester credit hour for internships.  Although an internship might equate to 3 semester credit hours, LHU would define the number of working hours as equivalent to or exceeding a part-time academic workload.  As a result, students will be classified as part-time for Federal Student Aid purposes while on an internship. 

A graduate student example would be as follows:  the student is on an internship that requires 300 working hours.  Due to the 40:1 ratio mentioned above, this graduate student would be considered to be enrolled in 7.5 credit hours for Federal Student Aid purposes. 

Students must complete the Internship Enrollment Status form.