Types of Loans

Samuel Merritt University offers a variety of loans to students to meet the cost of education.

Direct Stafford Loans There are two types of Direct Stafford Loans: Subsidized and Unsubsidized. You do not have to start repaying the principal of either type of loan until six months after you are out of school (or after you stop attending at least half-time).  Read more about Direct Stafford Loans at the Department of Education website.

Direct Subsidized Loans are available to undergraduate students with financial need.

  • SMU determines the amount you can borrow based off of the type of program that you are in, and the amount may not exceed your financial need.
  • The U.S. Department of Education pays the interest on a Direct Subsidized Loan
    • while you’re in school at least half-time,
    • for the first six months after you leave school (referred to as a grace period*), and
    • during a period of deferment (a postponement of loan payments).

*Note: If you received a Direct Subsidized Loan that was first disbursed between July 1, 2012, and July 1, 2014, you will be responsible for paying any interest that accrues during your grace period. If you choose not to pay the interest that accrues during your grace period, the interest will be added to your principal balance.

Direct Unsubsidized Loans are available to undergraduate and graduate students; there is no requirement to demonstrate financial need.

  • SMU determines the amount you can borrow based off of the type of program that you are in, the cost of attendance and other financial aid you receive.
  • You are responsible for paying the interest on a Direct Unsubsidized Loan during all periods. 
  • If you choose not to pay the interest while you are in school and during grace periods and deferment or forbearance periods, your interest will accrue (accumulate) and be capitalized (that is, your interest will be added to the principal amount of your loan).

Under Department of Education, there is also a provision for a Direct Consolidation Loan Program. This program provides borrowers who have multiple types of loans the opportunity to combine those loans for repayment purposes. Since this program is designed to provide a repayment option, it is not detailed here.

When you compare the costs of attending different schools, you should compare the amounts you may have to borrow. If your academic program will take more than one year to complete, try to project the total amount of debt you will have to assume to complete the entire program. Then consider whether you'll be able to repay that debt based on typical starting salaries for the job you're likely to get after you finish school. Each school can help you make projections about total debt and repayment amounts. You can also get information about starting salaries from the school or from library reference books. The Financial Aid Information Page offers a variety of financial aid calculators.

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Direct PLUS Loans are available to parents who do not have an adverse credit history. These loans are not based on financial need. Parents may borrow through this program to obtain money for the cost of college for their dependent children. These loans carry an interest rate that varies annually, but may not exceed 7.9%.

The origination and insurance fees are the same as for the Direct Stafford Loan. The first payment of interest and principal for Direct PLUS borrowers is due 60 days after the loan is fully disbursed and ends no later than 10 years after repayment begins, excluding periods of deferment and forbearance.

A Direct PLUS borrower may qualify for one of the loan deferments listed earlier under the Direct Stafford Loan Program. Parent borrowers who qualify for a deferment may have payment of their loan principal deferred and pay interest only on the loan. Or, they may capitalize the interest, which means it will be added to the loan principal. However, whenever feasible, parent borrowers (like all other borrowers) should try to pay the interest. Otherwise, they will end up paying interest on interest, as well as on loan principal. This can make the cost of borrowing more expensive than necessary.

You can get Direct Stafford and Direct PLUS loan applications and more detailed information about Direct loans from the school's financial aid office.

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Perkins Loans are low-interest loans (currently 5%) with generous repayment conditions. In order to be offered this loan, a student needs to have financial aid need. Students are not responsible for paying the interest on the loan during in-school, grace, and deferment periods. To inquire about the Perkins Loan program, please contact your Financial Aid Counselor by calling the Campus Service Center at 510-869-1550 to set up an appointment with your counselor. For questions regarding repayment for this loan a borrower can contact the Business Office at 510-869-6728.

FNSL Loans are low-interest loans (currently 5%) with generous repayment conditions. In order to be offered this loan, a student needs to have financial aid need. Students are not responsible for paying the interest on the loan during in-school, grace, and deferment periods. To inquire about the Federal Nursing Loan program, please contact your Financial Aid Counselor by calling the Campus Service Center at 510-869-1550 to set up an appointment with your counselor. For questions regarding repayment for this loan a borrower can contact the Business Office at 510-869-6728.

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Private Alternative Loans are available to students who must borrow additional funds to pay for their cost of education.  To assist in choosing a lender for an Alternative Loan, students can go to ELM Select to compare lenders side by side. ELM Select is a search and comparison tool that allows students to compare and apply for Alternative Loans with various lenders. Their features allow students to choose lenders that best fit their needs and financial situation. Once the student has chosen a lender, they must follow their lenders instructions to apply for the loan. If you have been awarded an Alternative Loan on your award letter, take a look at the ELM Select website to choose a lender and apply for the loan.