Financial Aid: Loans and Loan Counseling

Information about the Student and Parent Loan Programs at Cottey

Cottey has made the decision to transition from the Federal Family Education Loan (FFEL) Program to the William D. Ford Federal Direct Loan (Direct Loan) Program.  In the FFEL loan program, the lender is a bank, credit union, or other participating private lender.  In the Direct Loan program, the lender is the U.S. Department of Education.   

For the 2010-11 academic year, we will participate in both loan programs.  All new borrowers will borrow through the Direct Loan Program while all previous borrowers will continue to borrow through the FFEL program.  For the 2011-12 year and beyond, we’ll only participate in the Direct Loan Program.

Annual student loan limits are:

Annual Loan Limits Dependent Undergraduate Students (except students whose parents cannot borrow PLUS loans) Independent Undergraduate Students (and dependent students whose parents cannot borrow PLUS loans)

First Year Total
(maximum $3,500 subsidized)

$5,500

$9,500

Second Year Total
(maximum $4,500 subsidized)

$6,500

$10,500

Third Year and Beyond (each year)
(maximum $5,500 subsidized)

$7,500

$12,500

If you accept a Federal Direct Loan in your financial aid package and you are a first-time borrower, you must complete the following steps:
1) Complete a Master Promissory Note at https://dlenote.ed.gov/empn/index.jsp
2) Complete loan entrance counseling at
    https://www.dl.ed.gov/borrower/CounselingSessions.do?cmd=initializeContext

Direct PLUS Loans are made to parents of dependent undergraduate students to help pay for the cost of education.  On the parent loan, parents may borrow up to the cost of attendance minus the amount of any other financial aid the student receives.  To be eligible, a parent must be:

  1. The biological or adoptive parent of the dependent undergraduate student or the spouse of the student’s parent and your income and assets were reported on the FAFSA.
  2. You and your child must be a U.S. citizen or national, a permanent resident of the U.S. or an otherwise eligible non-citizen.
  3. You and your child must not be in default on a federal education loan or owe an overpayment on a federal education grant and must not have been convicted of, or pled no contest or guilty to, a crime involving fraud in obtaining funds under the Act.
  4. You must not have an adverse credit history (unless you can document extenuating circumstances or obtain an endorser who does not have an adverse credit history).

The interest rate on a Direct PLUS loan is a fixed rate of 7.9%.  There is a loan fee of 4% of the principal amount of each loan you receive.   If a parent wishes to apply for a Federal Direct PLUS Loan, they should complete and submit the PLUS Loan Information Sheet to the financial aid office.

Student Loan Code of Conduct

Cottey College will administer its student loan program with integrity and in a manner which provides the maximum benefit to its student borrowers. These guidelines are designed to avoid any potential for a conflict of interest between Cottey College, its students, or their parents in the student loan program. The College shall adhere to the following principles in the financial aid operations:

  • The College shall not engage in any revenue sharing arrangement with any student lending institution.
  • No employee of the College shall accept on his or her behalf, anything of more than nominal value from a student lending institution.
  • No employee or representative of a student lending institution shall be authorized by the College to be identified to the public as an employee or representative of the College.
  • No employee or representative of a student lending institution shall provide staffing services to the College financial aid office.
  • No employee of the College who is employed in, supervises or otherwise has responsibility or authority over the College's financial aid office shall receive any remuneration for serving as a member or participant of a student loan advisory board of a lending institution.

If the College decides to offer a list of preferred or recommended lenders for student loans, the selection of lenders shall be based on the best interests of the College's students and their parents, without regard to the financial interests of the College. Students and their parents have the right to select the lender of their choice and will suffer no penalty imposed by the College for choosing a lender that is not a preferred or recommended lender. The College shall review and update the contents of any lender list on an annual basis.

Loan Entrance and Exit Counseling

All first-time federal student loan borrowers at Cottey must receive loan entrance counseling before the first loan disbursement is made. And, all student loan borrowers must receive loan exit counseling before leaving school.