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Considering and applying for Student Loans
Considering and applying for Student Loans

Federal vs Private Student Loan

Written by Cyndi Myers
Updated over a week ago

As you prepare for ministry, it isn’t always possible to pay out of pocket or raise the funds needed for tuition, books and living expenses. While the goal should be to minimize the debt you take into ministry, sometimes a student loan may be required to assist along the way. We would encourage you to seek out other funding as much as possible. If a loan is necessary, we would then encourage you to borrow only what you need and borrow as you need it. It is helpful to check out an online student loan calculator before borrowing to estimate what your repayment may look like.

There are two types of student loans that Westminster can administer: federal and private. Because of our participation in title IV loans, we can also do Canadian Student loans as well. Both are great options, so check out the pros and cons of both options to see which option is best for you!

**Note that the MAC and Dmin programs are not eligible for Federal or Canadian Loans at this time.

Private Student Loans

You are able to pursue private loans through alternative servicers, including banks. Private loans have different terms and payment options and most likely will be dependent on a credit check. You will want to check out interest rates, fees, deferment options and payback options to make sure these loans will work for you. For a list of loan servicers we have worked with in the past, search our seminary on ElmSelect, but know that we are happy to work with other providers not listed!

You will work directly with your lender to apply for a private school loan. Once the bank has processed and approved the loan application, the financial aid office at Westminster will be contacted to certify the enrollment status of the loan applicant. Alternative loan disbursement dates will be aligned with those of government loans whenever possible.

Pros of private loans:

  • Banks can be more personal to work with and can offer in-person assistance.

  • These are often available to international students with a valid cosigner.

  • There are numerous repayment options available to fit your needs.

  • You can choose a fixed interest rate or a variable interest rate, allowing for more flexibility.

Cons of private loans:

  • If you opt for a variable interest loans, your rates can change at a moment’s notice, and one rate is not guaranteed for the life of the loan.

  • Eligibility requirements can be more strict, and can often be based on credit history.

Federal Student Loans

Westminster is approved to participate in the Federal Direct Student Loan Program (FDSLP), part of the Title IV program, in administering:

  1. Direct Unsubsidized Loans:
    Loans disbursed July 1, 2023 - June 30, 2024
    Interest rate of 7.05%, Origination Fee of 1.057% for 22-23 academic year.

  2. Graduate PLUS Loans:
    Loans disbursed July 1, 2023 - June 30, 2024
    Interest Rate of 8.05%, Origination Fee of 4.228% for 23-24 academic year.

Loans are available to students whose enrollment status is at least half-time and who have completed a minimum of 72 credits of undergraduate or graduate study prior to attending Westminster. To determine your enrollment status, check out this article.

Pros of federal loans: 

  • They are the most common type of loans, making them easy to access and make payments on later.

  • The interest rate is a fixed percentage for the entirety of the loan and are typically lower than private loans.

  • Eligibility requirements can sometimes be less strict.

  • There are numerous repayment options available to fit your needs.

Cons of federal loans:

  • Students who may request up to the smaller of $20,500 or the Cost of Attendance (COA), which is determined by the sum of living expenses, tuition, fees (student and loan), and books

  • Since these are unsubsidized, interest on the loan begins accruing immediately upon disbursement.

Disclosure Note: Federal loans taken out by students attending Westminster will be submitted to the National Student Loan Data System (NSLDS), and will be accessible by guaranty agencies, lenders, and schools determined to be authorized users of the data system.

Applying for a Federal Loan

If you intend to use a Federal Loan to cover tuition, please be sure to allow time for everything to be processed and applied to your account before your invoice is due. It can take a week or 2 for everything to be processed.

Step 1: Please review the Department of Education’s website to learn about the different types of loans, how much to borrow, how to manage your loan and repay successfully, and the consequences of default.

Step 2: Complete the Westminster Theological Seminary Loan Request Form online. Students can receive a maximum of $20,500 per academic year in Direct Unsubsidized loans from the government.

Step 3: Complete the Free Application for Federal Student Aid online.
Please note that you will use tax information for two years prior to the academic year you are applying for (for the 2023-24 FAFSA, please use your 2021 tax data) at present.

Step 4: Submit tax information in one of three ways:

  1. Electronically transfer your filed Federal Tax Return information to the FAFSA using the IRS Data Retrieval Tool online; OR

  2. Submit a Tax Return Transcript obtainable from the IRS’ Get Transcript website; OR

  3. If you did not file taxes for that appropriate year, please submit a Verification of Non-Tax Filing to the Financial Aid Office.

Step 5: If this is your first time receiving or applying for a loan with Westminster, please complete a Master Promissory Note for your specific loan:

  1. Direct Unsubsidized Loan: Complete the Master Promissory Note for Direct Loans.

  2. GraduatePLUS Loan borrowers: Complete the Master Promissory Note for GraduatePLUS Loans if you are seeking additional loan funds in excess of the total amount allowable from a Direct Unsubsidized loan.

Step 6: If this is your first time receiving or applying for a loan with Westminster, please complete Entrance Counseling online.

Step 7: Complete the Annual Student Loan Acknowledgement (helpful but not mandatory)

Step 8: After completing all of the steps above, the Financial Aid team will process your request and notify you to visit your Populi Financial page to view the loan(s) offered and accept or change the amount.

Through the generosity of our donors for scholarships and our matching grants and the fund raising efforts of our students, only 6% of our student body had to borrow a student loan last year. The majority of these students only borrowed to cover tuition. This responsible borrowing has meant that our current loan cohort default rate is 0%. **For reference, the national cohort default rate for federal student loans is currently 2.3%.

Loan Refund Checks

Loans must be approved, disbursed, and processed before a check of excess funds will be issued to a student. Residential students will be notified when checks can be picked up in the student success office. Online students' checks will be mailed, so please make sure your address in Populi is current.

Have more loan questions? Don't hesitate to email: We are happy to help!

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