Luther's Financing Philosophy
Students are encouraged to borrow only what they need and to seek outside scholarships and save summer earnings in order to reduce overall indebtedness. The Financial Aid Office works closely with students to achieve this goal. We also work diligently to ensure that our graduates will be able to repay their loans upon graduation--Luther's Stafford Loan default rate of less than two percent is evidence of our success.
At Luther College, the following types of loans may be available to you and your family to assist in financing educational costs:
Federal Loan Programs
Student loan programs awarded based on completion of the Free Application for Federal Student Aid (FAFSA). Subsidized loans borrowed under this program in 2012-13 will have a fixed interest rate of 3.4%, while unsubsidized loans will have a fixed interest rate of 6.8%.
Need-based loan program where funds are awarded to students based on FAFSA results. Loans in this program have a 5% fixed interest rate.
This program allows parents to share the responsibility of financing a college education to help reduce the debt burden of their student. Parents borrow at a fixed rate of 7.9%. FAFSA filing is required.
Institutional Loan Programs
Loans offered by Luther College based on financial need, therefore, FAFSA filing is required. Loans in these programs have a fixed interest rate. These loans are not available to new borrowers after January 1, 2012.
Private Loan Programs
Other loan programs are available to allow a student or their parents to finance educational expenses over a longer period of time. These loans offer both fixed and variable interest rates, usually require a co-signor, and should be considered only after federal and institutional loan options have been exhausted.