Student Loans
Student loans are a form of self-help aid that students can use to bridge the gap between the direct charges and the gift-aid that they have been awarded. Borrowing student loans is completely optional, and you are encouraged to discuss with Moravian’s Office of Financial Aid Services your options and rights as a potential student loan borrower. Be sure to review Moravian’s Student Loan Code of Conduct.
Understanding Your Financing Options: Federal vs. Private Loans
When financing your education, it’s important to remember that borrowing is a personal choice, not a requirement. At Moravian University, we encourage you to explore all "free money" first—scholarships, grants, and work-study—before looking at loans.
If a gap remains, you have two primary paths: Federal Loans (funded by the government) and Private Loans (funded by banks or credit unions). Here is how to navigate the choice with confidence.
Which loan should you choose? Any combination that works for you!
We recommend students maximize their Federal Direct Unsubsidized loans first because of the repayment protections.
However, if you still have a remaining balance, compare a Private Loan side-by-side with the Federal Parent PLUS loan. Often, families with good credit find that the private option is cheaper due to the lack of origination fees and potentially lower interest rates.
Pro Tip: Use our ELMSelect tool to compare our most-used private lenders. It allows you to see real rates and terms without affecting your credit score until you actually apply.
Federal Student Loans: The Safety Net
Federal loans are a great starting point because they offer unique protections that private lenders typically cannot match.
- Borrower Protections: Access to government-backed deferment, forbearance, and Public Service Loan Forgiveness (PSLF).
- Income-Driven Repayment: Starting July 1, 2026, the new Repayment Assistance Plan (RAP) ensures your monthly payments stay capped based on your actual income after graduation.
- No Cosigner Needed: Students can build their own credit history without needing a parent to sign for them.
Private Student Loans: The Strategic Bridge
Many families worry about private loans, but when used correctly, they can actually be more cost-effective than federal PLUS loans.
- 0% Fees Save You Money: Unlike federal PLUS loans, which charge a 4.228% fee upfront, most private lenders charge $0 in origination fees. This means more of the money you borrow actually goes toward your Moravian bill.
- Competitive Rates: If the student has a cosigner with a strong credit score, you may qualify for an interest rate that is significantly lower than the federal Parent PLUS rate.
- Choice of Terms: Private lenders allow you to choose your repayment length (e.g., 5, 10, or 15 years), giving you more control over your monthly budget.
- Cosigner Release: Many modern private loans allow the parent to be "released" from the loan after the student makes a certain number of on-time payments after graduation.
Graduate Students: Borrow up to $20,500 per award year but no more than $100,000 over your lifetime.
Undergraduate Students: If you are a dependent student on the FAFSA, borrow up to $31,000 toward your undergraduate education or $57,500 if you are an independent student.
For Students: If federal loans don’t cover your full balance, which is more likely now that Grad PLUS has been eliminated for new borrowers, a private student loan can bridge that gap. These loans are in your name but usually require a credit-worthy cosigner to help you secure a lower interest rate.
For Parents: If you have reached your federal Parent PLUS annual limit ($20,000), private "Parent Loans" are available. These allow you to borrow the remaining cost of your student's education, often with the choice of fixed or variable rates that may be more competitive than federal options if you have strong credit.
For New Parent Borrowers: Starting July 1, 2026, the federal government has placed a strict "hard cap" on how much you can help your child. You are limited to $20,000 per year and a $65,000 lifetime maximum per student. This is a major change from the previous "up to the full cost of attendance" rule.
For "Legacy" Parents: If you have already borrowed a Parent PLUS loan for your current student before July 1, 2026, you are grandfathered in. You can continue to borrow up to the full Cost of Attendance for up to three years or until your student graduates, provided they stay in the same program.