Vermont Student Loans

Girl and father discussing Vermont student loansStudents wishing to attend college in Vermont have a wide range of options, from small liberal arts schools to big universities.

The first institute of higher education to give public support to the freedom of religion and the fifth oldest university in New England, the University of Vermont (UVM) provides its diverse student body with over 100 fields of study to choose from. It is located on the banks of Lake Champlain and in the shadow of the Adirondack and Green mountain ranges in Burlington, Vermont.

The Community College of Vermont (CCV) is the second largest college in the state and may be the most affordable. With campuses in Montpelier, Bennington, Upper Valley, Middlebury, Rutland, St. Johnsbury, Springfield, Morrisville, Brattleboro, St. Albans, Newport, and Winooski, there is bound to be a CCV campus convenient to any Vermonter.

Northfield, Vermont, is home to Norwich University, which is the oldest private military college in the United States. The only technical college in Vermont, the Vermont Technical College, has two campuses, one in Williston and the other in Randolph Center, with small classes enabling each student to reach their full potential.

Top Liberal Arts Colleges in Vermont

One of the oldest liberal arts colleges in the United States, Middlebury College is private institution known for its international and environmental studies and language instruction. Nestled in the Champlain Valley in the central part of the state, Middlebury College in Middlebury, Vermont, teaches its students to think globally.

The first college in the state with two-thirds of its full-time undergraduates being Vermonters, Castleton College in Castleton, Vermont boast a low student-to-teacher ratio, and it is part of the Vermont State College System. Two other public liberal arts colleges are also part of the state system: the Lyndon State College in Lyndonville and Johnson State College in Johnson.

There are numerous small, private liberal arts colleges in Vermont, each with its own unique character and source of pride, including the Catholic St. Michael’s College in Colchester, the not-for-profit Champlain College in Burlington, Bennington College in Bennington which requires its students to gain real-world experience while attending school, Marlboro College in Marlboro which provides a progressive and interdisciplinary approach, and Green Mountain College in Poultney, Vermont, to name a few.

Borrowing Money to Pay for College

When all grants, scholarships, and forms of free money have been utilized, there may still be a gap between what a student can afford and the cost of college. Student loans are an option to help close this gap. Federal student loans generally are considered the best option for students, as they offer flexible repayment plans and low and fixed interest rates. There are two federal loan programs: the William D. Ford Direct Loan Program and the Perkins Loan Program. Schools participating in the Perkins Loan program distribute funds directly, making the school your lender instead of the U.S. Department of Education like loans through the Direct Loan Program. Perkins Loans are for undergraduate, professional, and graduate students with extreme financial difficulties, and they have a low and fixed interest rate of 5%. Undergraduate students may borrow up to $5,500 per year, up to a maximum of $27,000 total, while professional and graduate students may borrow $8,000 per year, up to a cap of $60,000 (including undergraduate loan amounts).

Loans in the Direct Loan Program include Subsidized and Unsubsidized Direct Loans, PLUS Loans, and Direct Consolidation Loans. Subsidized Direct Loans are for undergraduate students with financial need, as the interest is covered by the federal government. Unsubsidized Direct Loans do not require students to have financial need to qualify. Your school will determine how much you can borrow through a federal Direct Loan based on the COA minus any other financial aid you may be using.

Loan amounts also consider whether or not the student is dependent or independent. Dependent students are under age 24, unmarried, and have no dependents of their own. Undergraduate dependent students may borrow $5,500 the first year of college ($3,500 in subsidized loans), $6,500 the second year ($4,500 in subsidized loans), and $7,500 ($5,500 in subsidized loans) the third year and beyond, up to $31,000 total with $23,000 coming from subsidized loans. Current interest rates for Unsubsidized and Subsidized Direct Loans are fixed at 3.76%.

Independent undergraduate students may borrow more in unsubsidized loans each year ($9,500 the first year, $10,500 the second year, and $12,500 the third year and beyond) up to a maximum of $57,500. Graduate and professional students may borrow up to $20,500 each year, to an aggregate total of $138,500 that also includes any loan funding from the undergraduate years.

Graduate or professional students enrolled at least half-time and parents of dependent undergraduate students may take out a Direct PLUS Loan, which may cover the entire COA minus other financial aid funds received. PLUS Loans require a credit check and generally good credit in order to be eligible. The loan origination fee for Direct PLUS Loans disbursed between October 1, 2016 and October 1, 2017 is 4.276%, and the current interest rate is 6.31%.

Students may take out more than one type of federal student loan, and a Direct Consolidation Loan is a convenient way to combine these loans. As a result, students only need to make one payment each month instead of multiple payments. There is no application fee for consolidating eligible federal student loans, although it is important to note that this is new loan that may have different repayment plans and new rates. Terms from the old loans may change as a result.

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