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Loan Programs

Borrow Wisely

Although student loans are a convenient source of funding for your education, it is important to budget and borrow carefully.
  • Consider ways to keep your costs down to reduce student loan debt.
  • Borrow only what you need.
  • Keep track of your loan debt and the amount you will have to repay when you graduate.

Take very seriously the responsibility of borrowing and repaying an educational loan.

  • Read and understand the terms and conditions on your promissory note. You are agreeing to repay the loan with all accrued and capitalized interest and deducted fees.
  • It is your responsibility to read and keep all your records and contact your lender regarding any changes in your status as a student.
  • You are obligated to repay your loan regardless of whether you complete your education, are satisfied with your education, or are able to find a job.

How conscientiously you make payments on your student loan will affect your ability to borrow for a car, a house, or other purchases in the future.  If you are late with your student loan payments, it will have a negative effect on your credit history. On the other hand, repaying your student loan on time can help you establish and maintain an excellent credit history.

Entrance and Exit Counseling

A Student who uses any federal loan program is required to complete Entrance and Exit Counseling.  Loan counseling provides borrowers with information on the Terms and Conditions fo the loan and your Rights and responsibilities as a borrower.  Direct loan Borrowers complete loan counseling at www.studentloans.gov.  Federal Perkins Loan borrowers will complete counseling with the University Servicer, Hearland ECSI. Hearland ECSI notifies students who need counseling via the student's Detroit Mercy email account.

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    Repayment

    Loan Exit Counseling (Exit Interview)

    When you are about to graduate from UDM we will send you information so that you can participate in Loan Exit Counseling.  This Loan Exit Counseling will be performed on the Internet, using Direct Loan Services. Loan counseling provides information on what to expect as you begin repaying your loans.

    National Student Loan Data System (NSLDS)

    NSLDS lets you look up information about YOUR loans, including how much you owe and who your lenders and servicers are.

    Whom to contact about your loans after you graduate or leave school

    • Perkins loans, Health Professions Loan, and Nursing Student Loans
      • After graduating or leaving UDM, you will receive a repayment information from ECSI, a servicing company UDM has contracted with to collect loans, and after 9 months you begin sending your payments to UDM
      • For questions while in repayment contact ECSI at 888-549-3274 or on the web at www.ecsi.net
    • Stafford loans, Parent Plus and Grad PLUS loans
      • Direct Loans (Direct Stafford, Direct PLUS) 800-557-7394.
      • For other servicers, consult your loan history on NSLDS
    • For private alternative loans refer to your loan applications to find your lender or servicer.

    Loan Forgiveness Programs

    Under certain circumstances the federal government will cancel all or part of an educational loan. This practice is called loan forgiveness or loan cancellation.

    Loan Consolidation

    If you are considering consolidation you should be aware that if you received special borrower benefits by borrowing through the federal loan programs, you may lose some of these benefits.

    Financial Hardship, Deferment, Forbearance, Default

    If you are unable to make your student loan payments, there are deferment and forbearance options available. The consequences of defaulting on your student loans are severe, so explore your options BEFORE you default. See more information from the Department of Education on repaying your loans.

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    Loan Consolidation

    What is consolidation?

    Loan consolidation is a new loan that is created by combining the repayment of two or more loans to reduce the amount of monthly payments and extend the loan repayment term.

    Should you consolidate?

    You may already be receiving advertisements from banks, lending institutions, and consolidators urging you to consolidate your loans with them. These ads usually say you get lower interest rates and/or smaller monthly payments if you sell your loans to them.

    An important consideration in the decision to consolidate should be the total cost of the loan.  This can be higher with consolidation because the repayment period can be much longer than the standard period.  Further benefits associated with loans are lost when those loans are consolidated.

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    Helpful Resources

Detroit Mercy Loan Programs

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    Federal Stafford (Direct) Loans

    Eligibility Requirements

    In addition to program specific eligibility requirements students must also meet general eligibility requirements to be eligible for all federal grants and loans.  Contact your financial aid advisor if you have any questions regarding your eligibility for federal financial aid.

    The University of Detroit Mercy participates in the Federal Direct Student Loan Programs. All Stafford, PLUS and Grad PLUS loans will be processed through the Federal Direct Loan Program. How to apply for Stafford loan

    • File the Free Application for Federal Student Aid (FAFSA). Most students who apply will qualify for a subsidized or unsubsidized Stafford Loan.
    • Summer semester Stafford loans require the FAFSA and a UDM summer aid application.
    • You must be enrolled at least half-time.
    • You must accept your loans in TitanConnect.
    • You must complete a Direct Stafford Loan Master Promissory Note (MPN). The Stafford MPN is good for ten years, provided at least one Stafford Loan is disbursed to you within the first 12 months after signing.
    • If you are a first time borrower, you must complete an Entrance Counseling.
    • Maintain Satisfactory Academic Progress for Financial Aid.

    Difference between subsidized and unsubsidized Stafford

    Subsidized Direct Stafford Unsubsidized Direct Stafford
    Interest The federal government pays the interest on a subsidized loan while you are in school at least half-time, so the student has no interest payable or accruing while in school. Interest does accrue on an unsubsidized Stafford while you are in school. You may choose to pay interest while in school in order to avoid "paying interest on interest" (capitalizing interest).
    Interest Rate for loans borrowed from July 1, 2016 to June 30, 2017 Interest rate fixed at 3.76%, once the loan goes into repayment. Interest rate fixed at 3.76, begins to accrue with final disbursement.  The interest rate for graduate students is 5.31%.
    Interest Rate for loans borrowed from July 1, 2015 to June 30, 2016 Interest rate fixed at 4.29%, once the loan goes into repayment. Interest rate fixed at 4.29%, begins to accrue with final disbursement.  The interest rate for graduate students is 5.84%.
    Loan Origination Fees Stafford Loans require a 1.068% origination fee. After October 1, 2016 the fee will be 1.069% Stafford Loans require a 1.068% origination fee. The loan origination fee for graduate students is 4.272%.  After October 1, 2016 the fee will be 1.069% for undergraduates and 4.276% for graduate students.
    Repayment 10 to 25 years 10 to 25 years

    Disbursement

    Funds are generally disbursed to student accounts at the beginning of each semester. Once the student account is paid in full, any remaining funds are disbursed to the student.

    Repayment and consolidation

    When you near graduation (or drop below half-time) you will be given information on loan repayment and consolidation. This is referred to as Exit Counseling or Exit Interview.  Repayment information, including repayment plans and sample loan repayment schedules can be found on the Federal Student Aid web site.

    Additional Information about U.S. Department of Education Loan Programs

    Federal Student Aid, an office of the U.S. Department of Education is a great resource for federal loan programs and other types of financial assistance.

    Credits required for grade level advancement with program maximums

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    Federal Graduate PLUS Loan

    Eligibility Requirements

    In addition to program specific eligibility requirements students must also meet general eligibility requirements to be eligible for all federal grants and loans.  Contact your financial aid advisor if you have any questions regarding your eligibility for federal financial aid.

    Grad PLUS Eligibility

    Grad PLUS is available to graduate students who:

    How to apply

    1. Accept all or part of the Grad PLUS on your financial aid award in TitanConnect
    2. Complete a Grad PLUS Direct Loan Master Promissory Note.
      NOTE: The MPN will be valid for 10 years provided a PLUS loan is disbursed within 12 months of the MPN signing.
    3. New borrowers must complete a Grad PLUS Entrance Interview

    Disbursement

    • Funds are generally disbursed to student accounts at the beginning of each semester.  Once the student account is paid in full, any remaining funds are disbursed to the student. 

     Loan limits

    • The loan limit for each year is the annual cost of education (the "budget") minus other financial assistance. If your requested amount is too high, it will be reduced to fit within the budget.
    • Your Stafford Loan eligibility must be determined before you may borrow under the Grad PLUS program. This means that some graduate students, will have their costs covered fully with Stafford Loan and may not need to use the Grad PLUS.

    Interest rate

    • Under Direct Loans, the interest rate is 6.31%.
    • As with Unsubsidized Stafford Loans and private loans, interest begins to accumulate at the time the first disbursement is made. You may choose to pay the interest while in school in order to avoid "paying interest on interest" (capitalizing interest).

    Loan fees

    • The Federal Direct PLUS Loan Program requires a 4.276% origination fee. 

    What occurs during Grad PLUS processing?

    1. After the loan is accepted in TitanConnect, we confirm your eligibility for a Grad PLUS and transmit the application to the PLUS loan servicer.
    2. Student completes Grad PLUS MPN
    3. The servicer performs a credit check.
    4. The servicer notifies you about acceptance or rejection of the loan.
    5. If the loan is approved, funds are sent directly to UDM and applied against your bill.

    How is Grad PLUS repaid?

    • You will receive an automatic deferment while you are enrolled at least half-time. Since Grad PLUS is not a subsidized loan, interest will accrue during this time. Repayment begins immediately upon your graduation, or if you drop below half-time enrollment. Grad PLUS loans have a 6-month grace period. In case of hardship, you may request forbearance for up to 42 months.
    • When you near graduation (or drop below half-time) you will be given information on loan repayment. This is referred to Exit Counseling or Exit Interview.
    • Repayment information, including repayment plans and sample loan repayment schedules can be found on the Federal Student Aid web site.
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    Federal Carl Perkins Loan

    Eligibility Requirements

    In addition to program specific eligibility requirements students must also meet general eligibility requirements to be eligible for all federal grants and loans.  Contact your financial aid advisor if you have any questions regarding your eligibility for federal financial aid.

    How to apply

    • File the Free Application for Federal Student Aid (FAFSA). Perkins Loan will be included in your aid package if you are eligible.
    • Summer semester Perkins requires the FAFSA AND an UDM summer aid application.

    The Federal Perkins Loan Program Extension Act of 2015 enacted on December 18, 2015, extends the Perkins Loan Program through September 30, 2017. The Extension Act eliminates the Perkins Loan grandfathering provisions that the Department previously enacted. The Extension Act establishes new eligibility requirements for undergraduate and graduate students to receive Perkins Loans.  The grandfathering guidance is no longer applicable to the Perkins Loan Program.

    Per the changes in the Extension Act, effective December 18, 2015, schools participating in the Perkins Loan Program may make Perkins Loans as specified below:

    Undergraduate Students

    A school may make Perkins Loans through— To an— Who, on the date of disbursement— If the school has  awarded the student—
    September 30, 2017 Eligible current undergraduate student Has an outstanding balance on a Perkins Loan made by the school. All Direct Subsidized Stafford Loan aid for which the student is eligible.
    September 30, 2017 Eligible new undergraduate student Does not have an outstanding balance on a Perkins Loan made by the school. All Direct Subsidized and Unsubsidized Stafford Loan aid for which the student is eligible.

    Graduate Students

    A school may continue to make Perkins Loans through— To an— If the graduate student— And the new Perkins Loan will—
    September 30, 2016 Eligible graduate student who has received a Perkins Loan before October 1, 2015. Received his or her most recent Perkins Loan from the school, for enrollment in an academic program at the school. Enable the graduate student to continue or complete the academic program for which the student received his or her most recent Perkins Loan.

    If you have any questions regarding the Extension Act above please contact The Financial Aid Office at (313) 993-3350 or email us at finaid@udmercy.edu.

    Other requirements to receive Perkins Loan

    • You must accept your loan in TitanConnect.
    • You must complete a Perkins Master Promissory Note on the web, with our servicer, ECSI.  
      • You will receive an e-mail when your Perkins Loan Promissory Note is ready to e-sign.  The email will be from the company that UDM has contracted to service our Perkins Loans, Education Computer Systems (ECSI).
      • You will e-sign using the PIN provided by ECSI. 

    Eligibility

    Disbursement

    • Funds are generally disbursed to student accounts at the beginning of each semester.  Once the student account is paid in full, any remaining funds are disbursed to the student.  

    Annual and lifetime Perkins Loan limits

    • The program limit for Perkins is $5500/year for undergraduate students, with cumulative limits of $27,500.  Students who have not yet completed two years of their program of study are limited to $11,000.  Program of study advancement for Perkins is the same as the Stafford loans.

    Interest rate

    • The interest rate is 5% with the interest paid by the federal government while the student is in school at least half-time and during a 9-month grace period after graduation or less than half-time enrollment.
    • There are no loan origination fees.

    Repayment

    • The standard repayment period is 10 years.
    • Perkins Loan is subject to partial forgiveness/cancellation for some types of teaching/public service.
    • For Perkins deferment and repayment questions contact the Student Accounting Office.  You will be making your payments to UDM (or Heartland ECSI, a company we contract with), since the school acts as lender for the federal government.
    • When you near graduation (or drop below half-time) you will be given information on loan repayment. This is referred to as exit counseling or an exit interview.

    Helpful links

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    Nursing Student Loan (NSL)

    The funding for the Nursing Student Loan (NSL) was initially made by the U.S. Department of Health and Human Services, amount available each year depends on the successful repayment of students who are in repayment.

    Students must be enrolled at least half-time in the nursing program in order to borrow a Nursing Student Loan (NSL).  This loan is a need-based loan and it has a 10-year repayment period. This loan remains in deferment while the student is enrolled at least half-time.  Once the student drops below half-time enrollment, stops attending for any reason, or graduates, there is a nine-month grace period before the first payment is due.  No interest accrues while the student is enrolled at least half-time or during the nine-month grace period.  The interest rate on this loan is fixed at 5%.

    With the exception of nursing students in their last two years of a program, the annual maximum loan is $2,500.  The annual maximum NSL is $4,000 for students who are in their last two years of study.  The aggregate maximum NSL that any nursing student may obtain is $13,000.

    The NSL funds are limited and availability of funds varies from year-to-year.  Students who borrow the Nursing Student Loan must complete the NSL Promissory Note, Rights and Responsibilities Statement, Truth in Lending Statement, and the NSL Entrance Counseling each year. 

    • You will receive an e-mail when your NSL Loan Promissory Note is ready to e-sign.  The email will be from the company that UDM has contracted to service our Nursing Student Loans, Hearland ECSI.
    • You will e-sign using the PIN provided by ECSI.
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    Faculty Nursing Loan Program

    In order to borrow funds through the Faculty Nurse Loan Program (FNLP) the student must be enrolled at least part-time (part-time is defined as a minimum of 4.5 credits) in the Master of Science in Nursing Education program at UDM, for a minimum of two consecutive terms in the award year.

    NLFP loans are made on a first-come-first serve basis for an academic year until funds are expended.  Funds are limited and availability of funds varies from year-to-year.  This is not a need-based loan program.

    Students may borrow this loan to cover the cost of tuition, fees, and books.  FNLP loans do not include stipend support (i.e. living expenses, student transportation costs, room/board, or personal expenses).  FNLP loans to a student may not exceed $35,500 during the 2016-2017 academic year and students who remain enrolled beyond five years may not receive additional FNLP loan support.

    The FNLP is a direct loan program with cancellation provisions.  Up to 85% of the loan may be canceled if the student fulfills specific requirements.

    The borrower may cancel:

    • 20% of the principal and interest of the unpaid loan balance upon completion of each of the first, second, and third year of full-time employment as a nurse faculty member.
    • 25% of the principal and interest of the unpaid loan balance upon completion of the fourth year of full-time employment as a nurse faculty member.

    The borrower is responsible for requesting cancellation.  FNLP borrowers are limited to a 12-month timeframe to establish employment as a full-time nurse faculty at a school of nursing following graduation from the program.  If employment verification is not submitted within the 12-month period, the borrower will NOT be eligible for the FNLP loan cancellation provision.

    Students who are borrowing the FNLP Loan must complete the FNLP Promissory Note, FNLP Loan Application, Rights and Responsibilities Statement, and the FNPL Entrance Interview.  These forms must be completed each year that the student borrows this loan. 

    • You will receive an e-mail when your FNLP Promissory Note is ready to e-sign.  The email will be from the company that UDM has contracted to service our FNLP Loans, Heartland ECSI.
    • You will e-sign using PIN provided by ECSI.

    Interest accrues on the FNLP loan at a rate of 3% per annum, beginning 3 months after the borrower ceases to be a full-time student in the Nursing Education program.  The initial repayment period for an FNLP loan begins following a 9-month grace period after the borrower ceases to be a full-time student in the Nursing Education program.

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    Health Professions Loan

    The funding for the Health Professions Loan (HPL) was initially made by the U.S. Department of Health and Human Services, amount available each year depends on the successful repayment of students who are in repayment.

    This program is only available to Dental student who demonstrate need, including family resources by disclosing parent income and assets, regardless of dependency, on the FAFSA.  Priority awards for FAFSA’s filed by April 1st.  This loan has a 10-year repayment period. This loan remains in deferment while the student is enrolled at least half-time.  Once the student drops below half-time enrollment, stops attending for any reason, or graduates, there is a twelve-month grace period before the first payment is due.  No interest accrues while the student is enrolled at least half-time or during the nine-month grace period.  The interest rate on this loan is fixed at 5%.

    The HPL funds are limited and availability of funds varies from year-to-year.  Awards typically range from $2,000 to $5,000 with a fixed interest rate at 5% and no origination fee.  Students who borrow the Health Profession Loan must complete a Promissory Note, Rights and Responsibilities Statement, Truth in Lending Statement, and Entrance Counseling each year.

    • You will receive an e-mail when your HPL Promissory Note is ready to e-sign.  The email will be from the company that UDM has contracted to service our HPL loans, Heartland ECSI.
    • You will e-sign using the PIN provided by ECSI.

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    Parent PLUS Loan

    Eligibility Requirements

    In addition to program specific eligibility requirements students must also meet general eligibility requirements to be eligible for all federal grants and loans. Contact your financial aid advisor if you have any questions regarding your eligibility for federal financial aid.

    Who may borrow?

    You may borrow if you are the parent/stepparent of a dependent student, you are not in default on any federal education loans, and you are a U.S. citizen or eligible non-citizen.

    How to apply for PLUS

    1. Student must accept the Parent PLUS on TitanConnect
    2. Complete the PLUS request process on line.

    Loan maximum

    The loan limit for each year is the annual cost of education (the "budget") minus other financial assistance. If your requested amount is too high, it will be reduced to fit within the budget.

    Interest rate

    Under Direct Loans, the interest rate is 6.31%.

    Loan fees

    The Federal Direct PLUS Loan Program requires a 4.276% origination fee.

    PLUS repayment

    The first payment is due within 60 days after each loan is fully disbursed. Therefore the first payment of a fall/winter loan will usually be due in February. Interest begins to accumulate when the first disbursement is made. You may contact the servicer and request forbearance of the principle. Read more about forbearance.

    When to apply

    You should begin the application process prior to the beginning of the academic year in order to ensure timely processing. Depending on the time of year, it can take up to four weeks from the time Detroit Mercy receives the Parent PLUS Loan Application until the servicer sends notice of acceptance or rejection.

    Steps in PLUS processing:

    • Parent completes the PLUS request process on line.
    • The servicer performs a credit check.
    • The servicer notifies the parent of acceptance or rejection of the loan.
    • If the loan is approved, Detroit Mercy will confirm eligibility then funds are sent directly to Detroit Mercy and applied against student's bill.
    • Any PLUS funds that exceed Detroit Mercy charges are mailed to parent borrower as a refund by the Student Accounting Office. Refunds can be issued to the student if the parent selects the "Refund to Student" option on the Parent PLUS application.

    PLUS disbursement

    Disbursement of the PLUS funds depends on when the loan is approved. By law PLUS funds cannot be disbursed until 10 days prior to the first day of classes in a semester. If that date has passed and the approval process has been completed, Detroit Mercy will generally disburse the funds within two days of approval.

    Options if PLUS is not approved

    These are some options the family may want to consider:

    • Parent may be approved with an endorser (co-signer).
    • If the parent is not approved, the student can contact the Financial Aid Office and request additional Unsubsidized Stafford Loan
    • Private alternative loans may be available.

Private Loans

Are Private Loans Right for you

Private Education Loans, also known as Alternative Education Loans, help bridge the gap between the actual cost of your education and the limited amount the government allows you to borrow in its programs. Private loans are offered by private lenders and there are no federal forms to complete. Eligibility for private student loans often depends on your credit score.  Students and families are encourage to take advantage of all federal and state sources of funding prior to the use of private loans.

Some families turn to private education loans when the federal loans don't provide enough money or when they need more flexible repayment options. For example, a parent might want to defer repayment until the student graduates, an option that is not available from the government parent loan (PLUS) program.

Private education loans tend to cost more than the education loans offered by the federal government, but are less expensive than credit card debt. The federal education loans offer fixed interest rates that are lower than the variable rates offered by most private student loans. Federal education loans also offer better repayment and forgiveness options. Since federal education loans are less expensive than and offer better terms than private student loans, you should exhaust your eligibility for federal student loans before resorting to private student loans.

Private student loans typically have variable interest rates, with the interest rate pegged to an index, such as LIBOR or PRIME, plus a margin. The LIBOR index is the London Interbank Offered Rate and represents what it costs a lender to borrow money. The Prime Lending Rate is the interest rate lenders offer to their most creditworthy customers. A rate of LIBOR + 2.8% is roughly the same as PRIME + 0.0%. The spread between LIBOR and PRIME has been growing over time. So all else being equal, it is better to have an interest rate pegged to the LIBOR index, as such a rate will increase more slowly than a rate pegged to the PRIME index.

The interest rates and fees you pay on a private student loan are based on your credit score and the credit score of your cosigner, if any. Generally, if your credit score is less than 650 (FICO), you are unlikely to be approved for a private student loan. An increase of just 30 to 50 points in your credit score is often enough to get you better terms on your loan.

It is better to apply for a private student loan with a cosigner even if you could qualify for the loan on your own. Just applying with a cosigner usually results in a slightly lower rate, as such loans are not as risky for the lender. Moreover, the interest rates and fees are usually based on the higher of the two credit scores. If your cosigner has a much better credit score than you, it could result in a much lower interest rate.

UDM students who intend to borrow a private loan must complete a private loan application with the lender of their choice. Most lenders have online applications available. Once the student completes the application, if the lender approves the student to borrow the loan, the lender will forward the loan application to UDM for certification.  In addition, borrowers must complete a Private Education Loan Applicant Self-Certification Form for the lender.

Graduate and professional students are encouraged to consider their borrowing options through the Graduate PLUS loan program before borrowing a private loan. It is also strongly recommended that all students borrow conservatively.

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    Lender Selection

    You have the right to select any lender you wish for an alternative/private loan.  Many lenders offer attractive terms and conditions which you can find by searching the internet.  As always, UDM recommends that students review all options and make educated borrowing decisions.

    UDM has partnered with ELM Resources to process private/alternative loans on the behalf of students at the University of Detroit Mercy.  ELM Resources maintains a comprehensive list of lenders that have been used by our students during the past few years.  This is by no means an exclusive list of lenders.  The University of Detroit Mercy does not recommend any particular lender and encourages students to compare different lenders to find the one that best fits their individual needs.  You have the right to select any lender of your choosing.

    Once you have selected your lender you can begin the loan process by completing the application on ELMSelect.  UDM will be notified of your request and will complete the school certification.  If you choose a lender not on ELMSelect, you should coordinate your application process with UDM's Loan Coordinator.

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    Private Educational Loan Disclosures

    In accordance with 34 CFR 668.14(b)(29)(ii), an institution must, upon the request of the applicant, discuss the availability of Federal, State, and institutional financial aid.   Financial aid advisors in University of Detroit Mercy's Scholarship and Financial Office are happy to discuss with students and prospective students, and their parents, the financial aid options available to them.  Students and parents may qualify for loans or other assistance under Title IV of the Higher Education Act programs.  The terms and conditions of Title IV HEA program loans may be more favorable than the provisions of private educational loans.

    The Higher Education Opportunity Act of 2008 (Pub. L. 110-35) (HEOA) added section 128(e)(3) to the TILA to require that before a private educational lender may consummate a private education loan for a student in attendance at an institution of higher education, the private education lender must obtain the completed and signed Self-Certification Form from the applicant.  The Federal Reserve Board’s Final Regulations published on August 14, 2009 incorporate this new requirement at 12 CFR 226.48(e).   Many lenders of private loans will provide the Self-Certification Form to the student borrower.  The form is also available here in pdf format:

    Private Education Loan Self-Certification

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