Learn about different types of loans and where to find more details on each.

What is a loan?

A loan is money you borrow and are required to pay back, likely with interest. If you choose to take out a loan to help pay for college, make sure you understand who is giving you that loan, as well as the specific terms and conditions of the loan.

Types of loans

There are three main types of loans: Federal Direct Loans, Direct PLUS Loans, and Alternative Education Loan Programs. Below, we walk you through each type of loan and direct you to the specific loan program for more details.

Federal Direct Loans

Federal student loans are available to help cover the cost of higher education for students who are enrolled at least half-time (six credits).

How it works:

  • Subsidized Federal Direct Loans
    These loans are available to degree-seeking undergraduate students who demonstrate financial need. Interest is waived on subsidized loans as long as a student is enrolled full time. Upon graduation or dropping below full-time (12 credit) status, interest will begin to accrue.
  • Unsubsidized Federal Direct Loans
    These loans are not based on financial need; therefore, interest is charged throughout the life of the loan (as opposed to beginning after graduation).

Students can choose to make monthly interest payments or allow interest to capitalize—which means the interest you owe each month is added to the principal balance (the original amount you borrowed).

The Department of Education will then charge interest on this new principal balance (the original amount you borrowed + the interest you owe). This option will increase the total amount repaid over the life of the loan.

How to apply for a Federal Direct Loan

  1. File a FAFSA

Once financial aid eligibility is determined through your FAFSA, you will receive a financial aid offer letter. You may accept all or a portion of the offered loans.


2. Complete Entrance Counseling
This online counseling session helps guide you in managing your student loans, both during college and after you graduate.

3. Submit a Master Promissory Note

You must complete and submit a legal document in which you promise to repay your loan(s).

Federal Direct Loan Details

Federal Direct PLUS Loans

Federal Direct PLUS Loans are available to parents of dependent undergraduate student, as well as graduate or professional students.

How it works:

Federal Direct PLUS Loans help pay for education expenses not covered by other financial aid. Eligibility is not based on financial need, but a credit check is required.

  • Parent PLUS Loan: Loans that are available to parents of an undergraduate student.
  • Grad PLUS Loan: Loans that are available to graduate and professional students

Federal Direct PLUS Loan Details

Private Alternative Education Loan Program

These private education credit-based loans are offered by several financial lending institutions.

How it works:

University of Jamestown maintains a preferred listing of private lenders through which private loans have been processed for students. Loan options can be compared and applications accessed from For a more in-depth look and comparison of participants in the Private Loan program visit

You have the right to select an eligible lender; University of Jamestown will process the request in compliance with federal and institutional packaging guidelines. We will certify a private loan through any lender for an eligible student, whether that lender is on our preferred lender listing or not.

Private Alternative Loans

Private loans can be utilized in addition to or in lieu of Title IV, Higher Education Act (HEA) programs, referred to as Federal Direct Student Loans. Prospective borrowers may qualify for loans or other assistance under the Title IV, HEA programs. Terms and conditions of the Title IV, HEA program loans may be more favorable than the provisions of the private education loans.

Need more information?

Our team is ready to help. Please reach out with any questions.

Financial Aid Office

The Financial Aid Office is open M-F, 8 a.m.-5 p.m. It is located on the lower level of Liechty Center/Taber Hall.