Skip to content
Search Icon


Southwest Minnesota State University offers a variety of loans that are available for students. Borrow Wisely - Loans must be repaid!!

Please keep the following points in mind:

  • All loans must be repaid. Make sure you understand when repayment of principal and/or interest is expected. Repayment terms and start dates vary.

  • Make sure you understand all of your rights and responsibilities under the loan program(s) you choose.

  • If you are using a co-signer to acquire a loan make sure they understand their obligations.

  • If you are given the option of either paying or accruing the interest while you are in school, it is recommended that you pay the interest now rather than adding it to your loan debt.

  • Borrow wisely!! Do not borrow more than what is needed to achieve your educational goals.

Federal Direct Loans

Freshmen may borrow up to $5,500 per year, sophomores $6,500, juniors and seniors $7,500, graduate students $20,500. These maximums apply to Federal Direct Loans - Subsidized and Unsubsidized combined. Independent undergraduate students may borrow additional funds under the Unsubsidized Federal Direct Loan program. If from fall semester to spring semester you progress to the next grade level (i.e. from freshman to sophomore or from sophomore to junior standing), please contact the Financial Aid Office to determine if you have additional loan eligibility.

First-time borrowers must complete loan counseling and a Master Promissory Note online at before the loan will be processed by the Financial Aid Office.

Subsidized Federal Direct Loans -
These loans are need-based, long-term loans. Interest and principal on the Subsidized Federal Direct Loan is deferred as long as the student carries at least a half-time credit load (6 credits for undergraduate students and 5 credits for graduate students). When a student graduates or ceases to be enrolled at least half time, there is a six-month grace period before repayment begins. The interest rate for Subsidized  Federal Direct Loans is currently 5.5%.  An origination fee of 1.057% of principal will be withheld at disbursement.

Unsubsidized Federal Direct Loans-
These loans are similar to Subsidized Federal Direct Loans except that only the principal is deferred while the borrower is enrolled in school. The interest rate for Unsubsidized Federal Direct Loans is currently 5.5% for undergraduate students and 7.05% for graduate students.. Interest must either be paid during the in school period or the interest will accrue and be added to the principal balance. An origination fee of 1.057% of principal will be withheld at disbursement.

Federal Parent Loan for Undergraduate Students (PLUS)

The Federal Direct PLUS (Parent Loan for Undergraduate Students) Loan Program provides loans to parents of dependent undergraduate students attending post-secondary schools. The parent is the borrower of the PLUS Loan and is responsible for paying the interest and principal on the loan.


  • The interest rate on a PLUS loan is currently 8.05% and changes every year. Interest is charged on the loan from the date of the first disbursement until the loan is paid.
  • Fees are 4.228% of the principal. 
  • Parents may borrow up to the cost of attendance minus other aid the dependent student is receiving.
  • Parents have an option of beginning repayment on the PLUS Loan either 60 days after the loan is fully disbursed or wait until six months after the student ceases to be enrolled at least half-time.


  • Federal PLUS loans are available to creditworthy parents of dependent students
  • Students must be enrolled at least half time (6 credits or more)
  • An eligible parent borrower must be the natural, adoptive, or step-parent of the dependent student
  • The parent borrower must be a U.S. citizen or eligible non-citizen
  • The student must be eligible for Federal Financial Aid

Begin processing a PLUS Loan application here.


Federal Graduate Student PLUS Loan

This is a federally sponsored loan that is ONLY for students seeking a Master's degree.  This loan should only be utilized by graduate level students who have exhausted their eligibility for the Federal Direct Loan program.  The student is the borrower for this loan and if approved can borrow up to the cost of attendance less other financial aid.


  • A FAFSA application is required
  • The interest rate on a PLUS loan is currently 8.05% and changes every year. Interest is charged on the loan from the date of the first disbursement until the loan is paid.
  • Fees are 4.228% of the principal. 
  • Repayment begins 30 to 60 days after loan is fully disbursed. The student can also request to defer payments while the student is enrolled at least half-time.
  • The application and Graduate PLUS Loan Promissory Note must both be completed by logging in to


Private Education Loan Options 

Have you applied for Federal Student Financial Aid through the FAFSA (Free Application for Federal Student Aid)? You may be eligible for Federal Financial Aid including grants, work study and loans that may have more favorable terms than the Private Education Loan options listed below. Learn more about the Federal Student Aid process at Applying for Financial Aid at SMSU.

Private Education Loans are borrowed in addition to Federal Direct loans. Most private education loan programs allow students or parents to borrow up to the total cost of attendance, less other financial aid resources. In most cases, private education loans, other than the PLUS (Parent Loan for Undergraduate Students), require a co-signer. Credit checks will be done on both the applicant and the co-signer.

Important Information: If you decide to process a Private Education Loan, you will need the cost of attendance information found at this link. Each lender will require you to fill that information in on the Private Education Loan Applicant Self-Certification.

Several different Private Education Loan options are provided for you at this link. SMSU does not endorse any particular lender but does feel the options listed will provide fair terms and conditions to our student borrowers. This list is provided as a courtesy to our students. It is not necessary for you to have a prior relationship with a lender to borrow a Private Education Loan. If you wish to use a lender not listed below, please contact that lender for application information.

Please review the details carefully.

Code of Conduct

The SMSU Financial Aid Office staff are committed to helping students obtain educational funding. Each staff member has signed the Code of Conduct

Last Modified: 4/4/24 10:54 AM | Website Feedback