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Financial Aid and Scholarships

US Federal Aid

US Federal Aid regulations for Foreign Schools differ from those for US domestic schools. Students from the United States of America who choose to study at foreign institutions are not eligible for grants from the US Federal government but may apply for US Federal Loans to help fund their studies.

Most of the following information can also be found on the US Department of Education websites: and .

Loans and Interest Rates

Direct Loans are fixed-rate student loans from the US Department of Education for undergraduate and graduate students attending university at least half-time. As a Foreign school, LAU can only participate in the Subsidized, Unsubsidized, and PLUS loans.

Student loans are borrowed money that must be repaid, with interest, just like car loans and house loans. You repay these loans to the U.S. Department of Education Direct Loan Servicing Center. They cannot be canceled just because you didn’t get a job or are having financial difficulty. Loans are legal obligations, so you need to think about the amount that you really need because you’ll have to repay it.

Subsidized Loans

Subsidized loans are federally guaranteed loans based on financial need as determined by the Department of Education. They can be offered to undergraduate students only. Interest does not accumulate on the loan while you are in university at least halftime, for the first six months after you leave the university (referred to as the grace period) and during any future deferment periods. The federal government subsidizes the interest during these times.  Interest accrues during the repayment period.

Unsubsidized Loans

Unsubsidized loans are federally guaranteed loans that are not based on financial need. They can be offered to both undergraduate and graduate students. Interest accumulates from the time the loan is disbursed to the school. If you choose not to pay the interest while you are in school and during grace periods and deferment or forbearance periods, your interest will accumulate and be capitalized (that is, your interest will be added to the principal amount of your loan).

PLUS Loans

PLUS loans are available from the US Department of Education and are not based on financial need. The parents, who are U.S. citizens, of an undergraduate dependent student may be eligible (as defined by the US Department of Education) for a parent PLUS loan if they meet certain credit guidelines. Independent graduate students are eligible for a Graduate Plus loan if they meet certain credit guidelines. Interest accumulates from the time the loan is paid out to the school. The maximum amount that can be borrowed is the cost of attendance minus other financial aid or scholarships received.

Interest Rates

Interest rates for federal student loans are determined by federal law and change every year. For the 2024-2025 academic year, the rates are as follows:

Loan Type First Disbursed between
July 1st, 2024 & July 1st, 2025
Direct Subsidized & Unsubsidized Loans (Undergraduate Students) Fixed at 6.53%
Direct Unsubsidized Loans (Graduate or Professional Students) Fixed at 8.08%
Direct PLUS Loans (Parents and Graduate Or Professional Students) Fixed at 9.08%
​​Origination Fees for Direct Loans First Disbursed between October 1 2020, and September 30, 2025
Direct Subsidized & Unsubsidized Loans  1.057%
Direct PLUS Loans (Parents and Graduate Or Professional Students) 4.228%

Amount One Can Borrow

First-year undergraduates (sophomore) are eligible for loans up to $4,500 in a subsidized Direct Loan (for freshman it is $3,500), of which a processing fee is subtracted from the proceeds by the lender. Loan amounts that could be borrowed increase for subsequent years of study, with the highest amounts going for graduate students.

The amount of money that you can borrow depends on several factors including:

Direct Stafford Loan Limits (Subsidized and Unsubsidized)
  Undergraduate Students Graduate Students
Dependent1 Independent2
1st year $5,500 ($3,500)3 $9,500 ($3,500) $20,500 ($8,500) for each year
2nd year $6,500 ($4,500) $10,500 ($4,500)
3rd & 4th year $7,500 ($5,500) $12,500 ($5,500)
Aggregate $31,000 ($23,000) $57,500 ($23,000) $138,5004 ($65,500)
  1Except those whose parents are unable to borrow PLUS loan.
2These limits also apply to dependent students whose parents are unable to borrow a PLUS loan.
3These numbers in parentheses represent the maximum SUBSIDIZED
4The aggregate amounts for graduate students include loans for undergraduate study

What are the fees on these loans?

There is an origination fee on all Direct Subsidized, Unsubsidized and PLUS Loans. The origination fee is a percentage of each loan amount taken by the lender before the money is received by LAU. The loan fee will be proportionately deducted from each loan disbursement. For example, if you took out a $3,500.00 subsidized loan, you could expect to receive $1,731.00 during the fall semester and $1,731.00 during the spring semester.

​​Origination Fees for Direct Loans First Disbursed between October 1, 2020, and September 30, 2023
​Direct Subsidized & Unsubsidized Loans ​​ ​​​1.057%​​
​Direct PLUS Loans (Parents and Graduate or Professional Students) 4.228%

Eligibility for US Federal Aid

To receive aid from the William D. Ford Federal Direct Loan Program you must satisfy the following requirements at LAU.

INELIGIBLE Students are:

Loan Application Guidelines 

It is imperative that you read the following information to fully understand the application process. It is important to adhere to deadlines and to plan early as the process takes time from initial application to loan origination. 

US Federal loans are educational loans that are expressly used for the purpose of covering the primary costs of educational study e.g. tuition, student accommodation & board, books/academic requisites, commuter travel etc. The primary costs of education cannot exceed the student’s ‘Cost of Attendance (COA)’ which is the official estimate of your tuition and living costs for the academic year of study. Loans are not intended to cover other expenses that are not directly related to academic study.  It is advisable that you plan a budget to make sure that you have enough funding to cover your period of study. You should note that it is important to borrow what you need but to remember at all times that you will have to repay it in the long term. 

Step 1: Completing the FAFSA Application

Applying for Federal Direct Loans in done online.The Free Application for Federal Student Aid (FAFSA) is used to determine student eligibility for all federal student aid including Direct Loans. It will collect demographic and financial information related to both the student applicant and his or her parent(s) so it is best to sit down and complete it together.

When completing the FAFSA, make sure you include the LAU college code (G41133) in the college release section otherwise the Financial Aid & Scholarships office will not receive a copy of your application.

You cannot receive federal student aid unless all your information is complete and accurate, so please read the FAFSA instructions very carefully and pay close attention to questions on income because most errors occur in that area. When selecting the “Grade level in college” make the selection based on LAU’s class classification

Once completed and submitted, you will receive a confirmation email. Make sure to read the email carefully. If there are no errors, you will see your SAI (Student Aid Index) that is used to determine your eligibility for need based federal aid. For foreign schools it would be used to determine eligibility for Subsidized Loans.

The FAFSA application must be completed each year you would like to be considered for U.S. federal Loans.

LAU will not charge any fees of any kind, to student or parent borrowers for the FAFSA, or loan certification, or the provision and processing of any information necessary for a student or parent to receive a loan.

Step 2: Loan Eligibility

After you submit your FAFSA, please fill in the LAU federal loan application Information form and submit it to the financial aid and scholarships office. Once submitted, the financial aid and scholarships office will access your FAFSA form and collect any additional information or documentation that is needed. Once the necessary information has been provided, an Eligibility Letter will be emailed to you indicating the type(s) and amount(s) of loans that you are eligible to borrow for the specified academic year. You will have the opportunity to indicate the amount of the loan that you would like to borrow or decline it altogether. The Eligibility Letter will include instructions on how to proceed including completing the Entrance Counseling (if you are a first time borrower) and signing the Master Promissory Note as well as the Annual Student Loan Acknowledgment form.

Please let me know if anything needs clarifying.

Step 3: Entrance Counseling

All students who wish to apply for US Federal loans must complete loan entrance counseling. Entrance counseling is a federal requirement. The purpose of loan entrance counseling is to help you to better understand your responsibilities in relation to your loans. It will provide you with consumer information related to borrowing Direct Loans. Entrance Counseling is done one time only and must be completed prior to the first time a loan is disbursed. Entrance Counseling can be completed online at the website.

Step 4: Master Promissory Notes and Title IV Authorization Form

The Master Promissory Note (MPN) is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the US Department of Education. It also explains the terms and conditions of your loan(s).  You must complete a new MPN each academic year that you wish to receive a Direct Loan. One MPN is completed for the Subsidized/Unsubsidized loans. A separate MPN is required should you wish to take out a Graduate PLUS or Parent PLUS loan. 

The MPN can be completed online at the website.

Federal regulations require universities to obtain authorization from students in order to use federal loan aid funds for other educationally related institutional charges that may be incurred such as parking fees, health insurance, library fines, etc. You will be asked to sign a Title IV Authorization Form that authorizes LAU to use the loan proceeds for these charges. When the loan funds are disbursed to your account to cover all dues and there is an excess amount remaining, LAU will refund you by issuing a check within 14 calendar days, unless you specify in writing authorizing LAU to hold the funds for future charges.

Step 5: Loan Approval

All loans will be originated by LAU with the US Department of Education.  Once approved, you will be notified in an email indicating the amounts approved as well as the disbursement dates. Funds that are approved for the academic year are disbursed in two equal payments, one for each term (fall and spring). LAU receives your funds less the origination fee deducted by the US Department of Education.

Step 6: Receiving the funds

Disbursements are made during the statement of fees period. If your loan is certified and you have not received the funds at time of payment (first time borrowers receive their loans 30 days from the 1st day of classes), the Business office will be notified that you are expecting Direct Loan funds and will therefore defer payment of a portion of your tuition fees equivalent to the loan amount expected until loan funds are received. Once the funds are disbursed to your account, you will be notified through an email. The email will also include information regarding any refunds that you might have as well as cancelation deadlines.

Canceling the loan

Before your loan money is disbursed, you may cancel all or part of your loan at any time by notifying the financial aid and scholarships office. After your loan is disbursed, you may cancel all or part of the loan within certain time frames. Your promissory note explains the procedures and time frames for canceling your loan. If for some reason, your loan has been cancelled while you are still registered at LAU, then you must settle any deferred or outstanding balance of your semester fees.

Parents and or Graduate Students

Parents of dependent students can borrow from the Direct PLUS Loan program. Parents may borrow under the Direct PLUS program up to their cost of attendance, minus other financial aid(s) received.

Parents do not need to file a FAFSA however they need to apply online through the website.

Eligibility Requirements for Direct PLUS Loans

The Parent PLUS loan is borrowed in the name of the parent; A PLUS loan has a repayment period that begins once your loan is fully disbursed (paid out); and has a fixed interest rate. If a parent is borrowing on behalf of a dependent undergraduate student, s/he must:

When applying for a PLUS loan a credit check will be carried out on the individual requesting the loan. No PLUS loan can be certified until this credit check is completed. You must select Complete PLUS Request Process to initiate the credit check. 

As a parent if you have an adverse credit history, you may still be eligible to receive a Direct PLUS loan. You can obtain an endorser who does not have an adverse credit history. An endorser is someone who agrees to repay the Direct PLUS loan if the student/parent is unable to repay the loan. In the case of a parent borrowing on behalf of their dependent student, the endorser cannot be the student on whose behalf the parent is obtaining the Direct PLUS loan. 

In case of documenting extenuating circumstances or obtaining an endorser, a mandatory PLUS Counseling is required for the parent and graduate/professional student Direct PLUS Loan applicants. The applicant must complete the counseling on the Department’s website.

The maximum Direct PLUS Loan amount that a parent or graduate and professional degree student can borrow is the student’s cost of attendance minus any other financial aid the student receives.

If a parent obtains a Direct PLUS Loan to help pay for a dependent student’s education, LAU will first apply the Direct PLUS Loan funds to the student’s school account to pay for tuition, fees, room and board and other school charges. If any loan funds remain, they will be sent to the parent borrower, unless the parent authorizes the school to hold the funds or release them to the student. Any remaining loan funds must be used for education expenses.

Satisfactory Academic Progress

At the end of each academic semester, we will assess your academic progress by checking your grades in order to maintain eligibility for Direct Loans as outlined in LAU’s SAP Policy. Among other things, this means that you must maintain a CGPA of 2.0 or higher and show that you are completing your degree requirements in a timely manner.

Withdrawal and Return of Title IV Funds (Direct Loans)

If you withdraw from or fail to attend all your classes at any point during a semester, you must inform the Financial Aid and Scholarships office and the US Department of Education no later than 5 working days after withdrawal. Students who withdraw from their program of study are required to inform LAU in writing to You should note that failure to attend after enrollment is deemed to be a withdrawal. You should also note that when you withdraw, any disbursed unearned loan funds must be returned to the US Department of Education. Please review our Return to Title IV Policy for more information.

Exit Counseling

Federal regulations require that all Direct Loan borrowers who graduate or withdraw from their program of study need to complete a Loan Exit Counseling Session. This session is designed to provide borrowers with important information regarding their responsibilities as well as repayment information. Students who withdraw from their course of study or fall below at least half-time study at any point during the current academic year will be required to complete Exit Counseling via the website. The US Department of Education will also be notified.

Graduation and Loan Repayment

After you graduate or once you are no longer enrolled at least half time in an eligible program, you will enter a six (6) month grace period before repayment of your loans begins. You should receive repayment information from your loan servicer approximately 3 months after you leave LAU. If you do not receive this information, it is your responsibility to contact the US Department of Education or loan servicer before the end of your grace period to arrange for the repayment of the loan. It is important that you plan for the repayment of your loan. There are several repayment plans you can choose from and typically you will have between 10 and 25 years to repay your loan. To get an early look at which repayment plans you may be eligible for and see estimates for how much you would pay monthly and overall, you can use the Federal Student Aid Repayment Estimator. There is no prepayment penalty on any of the Direct Loan types. You can make payments, including interest-only payments, while in school. Making interest payments while in school will save you money in the long run.

You should note that the 6 month grace period commences from the date of course completion as opposed to your graduation date. You must check with the US Department of Education for full details on the repayment of your loan. Any information that LAU has regarding your Direct Loans will be reported to the National Student Loan Data System (NSLDS). NSLDS provides a centralized, integrated view of Title IV loans so that recipients can access and inquire about their Title IV loans data. You can see your Title IV loan history by going to .

Loan Defaulting

If you default on your loan (fail to make repayments) and are delinquent for more than 270 days, a report is filed to all national credit bureaus which may result in potential garnishment of wages, inability to secure other forms of credit which include credit cards, mortgages or other loans. You will also remain ineligible for all other forms of financial aid in the U.S. It is important to note that defaulted loans are reported to the Internal Revenue Services and the US Department of Education may proceed with an action in order to recover defaulted loans. 

If you have trouble making payments on your loans you should contact your loan servicer as soon as possible. You may be eligible for a deferment or forbearance. In a deferment or forbearance period, you will not be required to submit payments and there will be no penalties. A deferment is a temporary suspension of loan payments for specific situations such as re-enrollment in school, unemployment, or economic hardship. Forbearance is a temporary postponement or reduction of payments for a period of time because you are experiencing financial difficulty. You can receive forbearance if you’re not eligible for a deferment. You should contact your loan servicer if you need more information on these options.

Summary of Student Responsibilities while benefitting from Federal Loans