Babson participates in the federal student loan programs, and we strongly recommend that all U.S. citizens and permanent residents of the U.S. apply for federal student loans first before pursuing any other loan option.
Follow the instructions for applying for financial aid here to be considered for the federal and state student loans listed in this section. Please read our loan policy statement
Federal Direct Loan
- The Federal Direct Loan is the most widely available student loan for U.S. citizens and permanent residents of the U.S.
- Students are eligible to borrow up to the following amounts through the Federal Direct Loan program:
||Maximum loan amount
||Maximum portion that can be subsidized|
- Effective for loans processed after July 1, 2013, the Direct Subsidized Loan and Direct Unsubsidized Loan rate is fixed at 3.86% with a 1.051% origination fee.
- Independent students can borrow additional amounts through the Direct Unsubsidized Loan program.
- For students who qualify for the Direct Subsidized Loan, the interest is paid by the federal government while in school.
- For students who don't qualify for the subsidy, the interest begins accruing at the time of the loan disbursement. Students can elect to pay the interest while in school or have it capitalized into a repayment schedule that starts six months after you leave school.
- Borrowers are required to sign a Master Promissory Note and to complete entrance and exit loan counseling.
- Loan funds are issued in two disbursements each year, typically timed to coincide with the start of each semester. Students are notified via email each time Federal Direct Loan funds are credited to their account.
Federal Perkins Loan
- Awarded to students with the greatest financial need.
- No fees and interest rate is fixed at 5%.
- Interest starts accruing and repayment begins 9 months after you leave school.
- Limited funds are available.
Mass No Interest Loan
- For Massachusetts residents with the greatest financial need.
- No fees and an interest rate fixed at 0%.
- Repayment begins 6 months after you leave school.
- Limited funds are available.
For students and parents who need financing beyond what is available through the federal student loan programs, we offer a list of recommended loans and lenders:
A co-signer with a strong credit history will increase a student’s chances of being approved for an alternative/supplemental loan. If you are an undergraduate who is planning to ask a parent to serve as a co-signer, you should also consider the parent loan options to ensure that, as a family, you are getting the best rates available to you. We use the following criteria in developing our list of recommended loans and lenders:
- Loan terms and cost to borrower
- Borrower benefits
- Differentiated options (fixed rate vs. variable rate loans, for-profit vs. non-profit organizations, regional vs. national lenders)
You are in no way limited to loans/lenders on our list of options. Babson will process a loan from any lender, and it is your right to apply for loans through the lender of your choice.
For your planning purposes, Babson offers BorrowSmart®, a tool that shows how you can minimize education debt by combining a monthly payment plan with the loan of your choice. You will input the amount that you feel you can reasonably afford each month, and the system will present options based on Babson’s list of recommended loans and lenders. Go to BorrowSmart® at Tuition Management Systems
Federal Direct Parent PLUS Loan Program
- For Parents who wish to borrow through the Federal Direct Parent PLUS Loan, please complete the application, Master Promissory Note, and entrance counseling
- The Federal Graduate PLUS Loan interest rate is 6.41% and there is a 4.204% origination fee deducted at disbursement
- Parents can request to borrow up to their full cost of attendance, less any financial aid awarded
Another resource is the Student Loan Market Place where you can submit information to determine whether you qualify and for what pricing terms for loans available through the Student Loan Market Place participating lenders.