Loan Programs

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 Direct, PLUS, and Grad PLUS loans will be processed through the Federal Direct Loan Program. How to apply for Direct loan(s)

• File the Free Application for Federal Student Aid (FAFSA). Most students who apply will qualify for a subsidized or unsubsidized Loan.
• The summer semester loans require the FAFSA and a Detroit Mercy summer aid application.
• You must be enrolled at least half-time.
• You must accept your loans in My Portal.
• You must complete a Direct Loan Master Promissory Note (MPN). The MPN is good for ten years, provided at least one Direct 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 loans

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 studentaid.gov.

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.

Entrance and Exit Counseling

A student who uses any federal loan program is required to complete Entrance Counseling (prior to receiving the loan) and Exit Counseling (after graduation or less than half-time enrollment). Loan counseling provides borrowers with information on the Terms and Conditions of the loan and their rights and responsibilities as a borrower. Direct Loan borrowers complete loan counseling online through the Federal Student Aid website. University of Detroit Mercy will be notified when students complete these requirements.

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:

• are enrolled at least half-time in a degree-granting program
• file the Free Application for Federal Student Aid (FAFSA)
• pass a credit check
• Maintain Satisfactory Academic Progress for Financial Aid.

How to apply

1. Accept all or part of the Grad PLUS on your financial aid award in My Portal
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 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 a Direct Unsubsidized Loan and may not need to use the Grad PLUS.

Interest rate

• 7.05% Interest Rate for loans borrowed between July 1, 2023 and June 30, 2024
• 8.05% Interest Rate for loans borrowed between July 1, 2024 and June 30, 2025
• As with Direct Unsubsidized Loans and private loans, interest accumulates when the first disbursement is made. You may pay the interest while in school to avoid "paying interest on interest" (capitalizing interest).

Loan fees

• The Federal Direct PLUS Loan Program requires a 4.228% origination fee.

What occurs during Grad PLUS processing?

1. After the loan is accepted in My Portal, 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 Department of Education performs a credit check.
4. The Department of Education notifies you and Detroit Mercy about accepting or denying the loan based on the credit check.
5. If the loan is approved, funds are sent directly to Detroit Mercy and applied against your bill.
6. If the loan is denied, you can appeal the denial by documenting your extenuating circumstances directly to the Department of Education

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 studentaid.gov website.

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%.

The NSL funds are limited, and the 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 Detroit Mercy has contracted to service our Nursing Student Loans, Heartland ECSI.
• You will e-sign using the PIN provided by ECSI.

In order to borrow funds through the Nursing Faculty Loan Program (NFLP) 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 Detroit Mercy, for a minimum of two consecutive terms in the award year.

NFLP 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. For further information, please contact the College of Health Professions.

Students may borrow this loan to cover the cost of tuition, fees, and books. NFLP loans do not include stipend support (i.e. living expenses, student transportation costs, room/board, or personal expenses).

The NFLP is a 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. NFLP 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 NFLP loan cancellation provision.

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

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

Interest accrues on the NFLP 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 NFLP loan begins following a 9-month grace period after the borrower ceases to be a full-time student in the Nursing Education program.

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 Detroit Mercy has contracted to service our HPL loans, Heartland ECSI.

• You will e-sign using the PIN provided by ECSI.

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 My Portal
2. Complete the PLUS request process on line.
   • Click here to complete the PLUS request process. NOTE: The MPN signed will be valid for ten years, provided a PLUS loan is disbursed within 12 months of the MPN signing.
   • An FSA ID is required for an online PLUS MPN. If you do not have an FSA ID, you can apply for one at the FSA ID website.

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 8.08%.

Loan fees

The Federal Direct PLUS Loan Program requires a 4.228% origination fee.

PLUS repayment

The first payment is due within 60 days after each loan is fully disbursed. Therefore, the first fall/winter loan payment 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. 

When to apply

You should begin the application process before the beginning of the academic year 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 online.
• The Department of Education performs a credit check.
• The Department of Education notifies the parent and University of Detroit Mercy of acceptance or denial of the loan.
• If the loan is approved, Detroit Mercy will confirm eligibility then funds are sent directly to Detroit Mercy and applied against the student's bill.
• Any PLUS funds that exceed Detroit Mercy charges are mailed to the 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 Direct Loan
• Private alternative loans may be available.

Private education loans, or alternative education loans, can help cover education costs beyond what federal loans allow. Offered by private lenders, these loans don’t require federal forms but depend on your credit score and, often, a cosigner’s credit.

Key Points to Consider:

• Exhaust Federal Options First: Federal loans typically offer lower fixed interest rates, better repayment options, and forgiveness programs. Maximize federal and state funding before turning to private loans.
• Higher Costs: Private loans often have variable interest rates and are more expensive than federal loans but cheaper than credit card debt.
• Flexibility: Private loans may offer repayment options, like deferring payments until graduation, which federal Parent PLUS loans do not.

Application Process:

• Detroit Mercy students must apply directly with their chosen private lender. Most lenders offer online applications.
• If approved, the lender sends the application to Detroit Mercy for certification.

Graduate Students:
Graduate and professional students should explore Graduate PLUS loans before considering private loans.

Borrow Responsibly:
Students are encouraged to borrow only what is necessary to minimize debt.

Choosing a Private Loan Lender

You have the right to choose any lender for a private/alternative loan. Many lenders offer competitive terms and conditions, which you can explore online. Detroit Mercy encourages students to review all options carefully and make informed borrowing decisions.

Detroit Mercy and ELMSelect
Detroit Mercy partners with ELMSelect to streamline the private loan process for students. ELM maintains a list of lenders previously used by our students, but this list is not exclusive. The university does not endorse any specific lender and recommends comparing options to find the best fit for your needs.

How to Apply:

1. If Using a Lender on ELMSelect:

   • Apply through the ELMSelect portal.
   • Detroit Mercy will be notified and handle school certification.

2. If Using a Lender Not on ELMSelect:

   • Work directly with Detroit Mercy’s Loan Coordinator to complete your application process.

Remember, the choice of lender is entirely yours. Borrow responsibly.

Loan Exit Counseling (Exit Interview)

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

StudentAid.Gov (studentaid.gov)

Studentaid.gov 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 Detroit Mercy, you will receive repayment information from ECSI, a servicing company Detroit Mercy has contracted with to collect loans, and after 9 months, you begin sending your payments to Detroit Mercy
  • For questions while in repayment, contact ECSI at 888-549-3274 or on the web at www.heartlandecsi.net
• Direct loans, Parent Plus, and Grad PLUS loans
  • Direct Loans (Direct, Direct PLUS) 800-557-7394.
  • For your specific loan servicer, review your federal financial aid dashboard on studentaid.gov
• For private alternative loans, refer to your loan applications to find your lender or servicer.

Financial Hardship, Deferment, Forbearance, Default

If you cannot make your student loan payments, deferment and forbearance options are 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.

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.

• Federal loan forgiveness programs
  
  • Direct Loan teacher forgiveness
  • Public Service Loan Forgiveness
• Loan forgiveness through volunteer work
  • AmeriCorps, Peace Corps and Volunteers in Service to America (VISTA) offer the opportunity to reduce your student loan indebtedness.

What is consolidation?

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

Should you consolidate?

You may receive advertisements from banks, lending institutions, and consolidators urging you to consolidate your loans. 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.