Undergraduate Student Loans

To receive a Federal Direct Subsidized or Unsubsidized Loan, you must:

• File a FAFSA Annually: You must have a valid FAFSA on file with Baylor University to determine general eligibility.
  • Be a US citizen or an eligible non-citizen
  • Have a valid Social Security number
    (with exception of students from the Republic of the Marshall Islands, Federated States of Micronesia, or the Republic of Palau)
  • Show that you are qualified to obtain a college education by:
    • Having a high school diploma or a recognized equivalent - OR -
    • Complete a high school education in a homeschool setting approved under state law
      (or—if state law does not require a homeschooled student to obtain a completion credential—completing a high school education in a homeschool setting that qualifies as an exemption from compulsory attendance requirements under state law)
• Sign the certification statement on the FAFSA form stating that you are not in default, owe money for a federal grant, and will use federal student aid for educational purposes only.
• Be enrolled at least half-time
• Be enrolled in a program that leads to a degree
• Maintain Satisfactory Academic Progress (SAP) 
• Be offered any eligible Federal Pell Grant

Additional eligibility requirements may apply to certain situations including non-U.S. citizens, students with criminal convictions, students with intellectual disabilities, or ability-to-benefit eligible students.

Direct Subsidized Loans are loans made to eligible undergraduate students who demonstrate financial need (as determined by the FAFSA) to help cover the costs of higher education. This loan is authorized by Title IV, Part D of the HEA and is one component of the Direct Loan Program. The Department of Education subsidizes the interest for this loan while the borrower is in an in-school, grace, or deferment period. Baylor will review the results of your Free Application for Federal Student Aid (FAFSA) and determine the maximum amount you can borrow. See Annual and Aggregate Federal Educational Loan Limits below.

Direct Unsubsidized Loans are awarded to eligible undergraduate, graduate, and professional students, but eligibility is not based on financial need.  This loan is authorized by Title IV, Part D of the HEA and is one component of the Direct Loan Program. The Federal Direct Unsubsidized Stafford/Ford Loan Program provides loans to undergraduate, graduate, and professional students attending schools that participate in the Direct Loan Program. The borrower is responsible for the interest that accrues during any period.

If you are a dependent student whose parents are not eligible for a Direct PLUS Loan, you may be able to receive additional Unsubsidized funding.  Please see “Next Steps for Denied Parent PLUS Borrowers” below.

There are limits to the amount of subsidized and unsubsidized loans that you may be eligible to receive each academic year (annual loan limits) and the total amounts that you may borrow for undergraduate study (aggregate loan limits).

The actual loan amount you are eligible to receive each academic year may be less than the annual loan limit. These amounts vary depending on:

• Your grade level year of education.
• FAFSA Determined Information
  • Your student status – dependent or independent.
  • Your Estimated Family Contribution (EFC) to determine your level of need for Subsidized Loans
  • Your Cost of Attendance, Estimated Financial Assistance (EFA), and remaining student budget.
• Annual loan limits assume that your program of study is at least a full academic year.
• Annual limits associated with Direct Loans are based on the SAY or BBAY defined academic year the student is in.  Learn more about SAY/BBAY and loan periods under “Private Loans” and “Loan Periods” below. 
• If a student intends to attend for an entire academic year, they will be offered eligible loans with substantially equal disbursements for each term. 
• If an undergraduate student is scheduled to graduate in December and will not attend for an entire aid year, their Direct Loans will be subject to proration.

With careful planning allowing you to graduate on time or early, you will not reach the aggregate limit. Click here and here to view sample loan disclosure statements. You will receive a statement specific to your loan before your loan is disbursed.

• Remember, only borrow what you need.  You can borrow less than you are offered each year.
• If you advance a grade level by the end of spring (freshman to sophomore, sophomore to junior), you may be eligible to borrow an additional $1,000 for the summer.
• Be aware of aggregate limits when you borrow the max amount for four years.  You will be limited in the amount you can borrow for the fifth year of study.

Annual and Aggregate Federal Educational Loan Limits

• The aggregate loan limits include any Subsidized Federal Stafford Loans or Unsubsidized Federal Stafford Loans you may have previously received under the Federal Family Education Loan (FFEL) Program. As a result of legislation that took effect July 1, 2010, no further loans are being made under the FFEL Program.
• If the total loan amount you receive over the course of your education reaches the aggregate loan limit, you are not eligible to receive additional loans. However, if you repay some of your loans to bring your outstanding loan debt below the aggregate loan limit, you could then borrow again, up to the amount of your remaining eligibility under the aggregate loan limit.

Origination Fees

The total origination fee for Subsidized and Unsubsidized Loans is 1.057% of the amount borrowed for loans disbursed after October 1, 2020. The origination fee is subject to change annually at the end of September. Origination fees for the next academic year are released in June.

Interest Rates

New rates will be established each June for the upcoming year. The interest rate for a loan will apply for the life of the loan (fixed-rate). As a result, it is likely you will have a set of fixed-rate loans, each with a different interest rate. See studentaid.gov for new rate information annually. 

Additional Interest Rate Support

• Understanding interest rates and fees—Find out how interest is calculated.
• Information for military members—If you are a member of the military, you may be eligible for special interest benefits relating to your federal student loans.

The Master Promissory Note (MPN) for Direct Subsidized Loans and Direct Unsubsidized Loans is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the U.S. Department of Education. It also explains the terms and conditions of your loan(s).

You may receive more than one loan under an MPN over a period of up to 10 years to pay for your educational costs, as long as the school is authorized to use the MPN in this way and chooses to do so.

You must sign a Direct Loan Master Promissory Note. This will be the only promissory note you will have to sign as long as you continue to attend Baylor as an undergraduate student. Your FSA ID is required to eSign at studentaid.gov/mpn. 

• Undergraduate MPN

• You have the right to decline any financial aid that you are offered.
• Before your loan money is disbursed, you may cancel all or part of your loan at any time.
• After your loan money is disbursed, you may return all or a portion of your loan proceeds that credited to your account, to your lender within 90 days of the notice that we send you. 
• If you want to cancel or return loan proceeds, please submit a Contact Us form.
• You have a number of rights and responsibilities pertaining to borrowing student loans. Click here for a list of important rights and responsibilities of which you should be aware.

Entrance counseling ensures you understand the terms and conditions of your loan and your rights and responsibilities. You will learn what a loan is, how interest works, your options for repayment, and how to avoid delinquency and default.

Complete Direct Loan entrance counseling after accepting a Direct Subsidized or Unsubsidized Loan offer. Go to studentaid.gov/entrance-counseling and sign in with your FSA ID to complete entrance counseling.  Entrance Counseling will only need to be completed once, for first time borrowers of a loan type, before loan disbursement can take place.

• Learn more about terms, conditions, borrower responsibilities, and important information about the Direct Loan Program.  

• Loan Disbursement
  • Once all requirements are met, accepted Federal educational loans will schedule to disburse, no earlier than ten days before the first day of class.
  • In most cases, we will apply the loan money to your student account to pay tuition, fees, and any other authorized charges. 
  • If there is money left over, we will initiate a refund of the surplus.
• Reporting
  • Federal educational loan information will be submitted to NSLDS and accessible by authorized agencies, lenders, and institutions, for students, or parents of students, who enter into an agreement regarding Federal Educational loans [HEOA 489 amended HEA Sec. 485B] – Access Federal Educational loan information here: https://nsldsfap.ed.gov/nslds_SA/.
• After your loan is disbursed, you will be contacted by your loan servicer.

Exit counseling is required each time you cease to be enrolled at least half-time. If you drop below half-time hours, withdraw, graduate, or stop attending, you are required to complete exit counseling by logging in with your FSA ID at studentaid.gov/exit-counseling. This applies for borrowers under the Federal Perkins Loan Program, William D. Ford Federal Direct Student Loan Program, and under the Federal Stafford Loan Program. The purpose of exit counseling is to ensure you understand your student loan obligations and are prepared for repayment.

• Learn more about repayment and exit counseling for the Direct Loan Program

If a student meets the criteria above, exit counseling is required each time there is more than a 30 day break in at least half-time enrollment, EXCEPT during non-compulsory terms.

Understanding the details of repayment on your federal student loan is extremely important. Direct Subsidized and Unsubsidized loan programs generally observe the following provisions:

• A 6-month grace period is provided before payments are due.
• Interest accrues during your grace period (excluding Direct Subsidized Loans).
• Your loan servicer will provide you with a loan repayment schedule.
• There are multiple repayment options available to choose from.
• Your billing statement will explain how much to pay and when.
• You are required to repay all loans that you have borrowed. Under special circumstances, there are student loan forgiveness options.

Repayment Support Information

• Who is my loan servicer? 
  • Find out at the Student focused National Student Loan Data System (NSLDS)
• What support does the Department of Education provide? 
  • Repayment Options & Making Payments:  Repaying your Federal Student Loans
  • Steps to Repayment Success:  Student Loan Repayment Checklist
• Sample Re-Payment Schedule

Private loans should be considered once you have explored the options available through the Direct Subsidized/Unsubsidized and/or PLUS loan programs. Some families turn to private loans when the federal loans don't provide funding or when they need more flexible repayment options. (For example, a parent might be willing to co-sign a note for the student but may want the student to bear primary responsibility for repaying the loan.)  

Private loans will NOT be added to the student's package if verification has not been completed, unless the student acknowledges that they understand that adding private loans in advance may impact their need-based aid.

Applying for, certifying, and processing private loans takes time.  Please allow 4-6 weeks for this entire process. 

Remember, you may qualify for loans or other assistance under the Title IV, HEA programs.  Terms and conditions of Title IV, HEA program loans may be more favorable.  Learn more about federal versus private loan borrowing here:

Federal versus Private Loans 

Eligibility for private loans often depends on the student's credit score; therefore, a co-signer is most often required. Even if a co-signer is not required, the student can usually receive a more favorable rate with a co-signer. Private loans generally cost more than the education loans offered by the federal government but are less expensive than credit card debt. 

Some lenders offer a fixed rate product, while others offer a variable rate product. Some lenders offer both types. A fixed interest rate will not fluctuate over time. A variable interest rate moves (up or down) based on changes of an underlying index. Some variable rate loans have an interest cap which cannot be exceeded. 

Use your financial aid offer, your BearWeb account, or contact Baylor One Stop to determine your maximum private loan eligibility. You should only request loan funds to cover your specific educational needs rather than the maximum allowed for the enrollment period. We recommend you borrow for the full academic year, not one semester at a time. Interest does not begin accruing on each portion of the loan until that portion is disbursed. Calculate how much you need to borrow for the semester and double that amount to cover both the fall and spring semesters. If you need help preparing a personalized budget, you may make an individual appointment by emailing Financial_Foundations@baylor.edu.

When submitting a loan application with a lender, please be sure to enter your desired loan amount. 

Please use the following dates as a guide to help select the loan period you will request on a loan application with a lender. 

It is important that the start and end dates indicated on your loan application match the start and end dates of the term or terms you are needing the loan to cover. 

Traditional Academic Year (SAY) 

• Begins in fall and ends in the spring, with summer as a non-compulsory trailer term.  
• All summer aid is packaged separately.  Summer aid is not packaged until a student enrolls in the summer term.  Summer loans must be applied for separately.  
• There are undergraduate and graduate programs that operate under a SAY. 

General Loan Periods

• Undergraduate Students
  • Fall/Spring - August to May
  • Fall - August to December
  • Spring - January to May
  • Summer - May to August

Some important factors for you to consider in choosing a lender include cost (interest rates and potential origination fees), flexibility (re-payment options), and customer service. Common customer service considerations include the availability of a fixed-rate loan product, account information online, deferment options, and co-signer release options. 

Baylor utilizes ELMSelect, a neutral lender and product comparison tool, to present the lenders on our preferred lender list to you. Access our lender list by visiting: 

ELMSelect

IMPORTANT:  You are NOT restricted to the lenders presented on our preferred lender list. You should not be directed to any specific lender by the University; you may choose any lender and follow their application process. 

We provide this list as a resource for you to research and make the best selection for your educational funding needs. This list is not exhaustive and other options are available. You do not need to borrow from a lender on this list. 

Preferred Lender Arrangements

Placement on the lender list is the result of our annual evaluation of the lender's borrower benefits offered, timely processing, flexibility, historical certification levels at Baylor University, and customer service to you and our staff. To ensure lenders on this list are selected based on the best interests of the borrowers we specifically review: 

• Payment of origination or other fees on behalf of the borrower.
• Highly competitive interest rates, or other terms, conditions, and/or provisions. 
• High quality loan servicing. 
• Additional benefits beyond typical standard terms, conditions, and/or provisions in loan borrowing. 

We exercise a duty of care and loyalty to our students when compiling the preferred lender list without prejudice and for the sole benefit of students and families at Baylor University.  We will not deny, impede the borrower’s choice of lender, or cause unnecessary delay in loan certification for those who choose a lender that is not included on the preferred lender list. Vendors on our preferred list were last reviewed July 2024.

When viewing Lenders on ELMSelect, PLEASE BE SURE TO: 

• Click on the VIEW button to see more information about the lender and loan options. 
• View the DETAILS to see the Lender & Servicer information to understand any vendor affiliation to other lenders on the list and loan program specific disclosures. 

Private Education Loan Self-Certification

Instructions: Obtain the Private Education Loan Applicant Self-Certification form from your lender or print it and complete Sections 2, 3 and 4. Return the completed form to your lender; do not submit it to the Financial Aid Office.

The Texas Higher Education Coordinating Board offers two loan programs, The College Access Loan and FORWARD Loan, to Texas residents who qualify. Both programs require a student meet eligibility requirements including, but not limited to, confirming Texas state residency, completion or exemption of Selective Service, meeting Satisfactory Academic Progress, and passing a credit check. Full eligibility requirements, instructions to apply, and eligible programs of study (FORWARD Loan) can all be viewed at http://www.hhloans.com/.

Students who borrow from either state loan program are subject to manageable debt limits and should be aware of their maximum borrowing eligibility.