Types of loans

Getting loans

You must have a completed Free Application for Federal Student Aid (FAFSA) on file with the University to be eligible for federal loans.

The total amount of financial aid offered to a student, including all scholarships and grants, cannot exceed the cost of attendance at the University of Minnesota for that aid year. Financial aid offers (e.g., loans, work study, scholarships, or grants) may be reduced for students whose total aid exceeds the cost of attendance.

Loan terms

Federal student loan programs offer favorable terms reserved for students. Interest rates on federal student loans are typically lower than for other types of private loans, and repayment often does not begin until you are done with school or drop below half-time enrollment. Additionally, there may be an interest-free grace period before repayment begins. Some federal loans offer forgiveness options if you work in a particular program or position after graduation.

Student loans must be repaid. The University of Minnesota will offer student loans as part of your financial aid offer after reviewing your eligibility for grants, scholarships, and work-study.

Visit compare loans to see the differences between loans.

Types of loans

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Federal loans

You may be offered several types of federal student loans after you complete your FAFSA. Be sure to consider interest rates, repayment plans, and loan fees before deciding on a type of federal student loan. Some common federal loan types include Direct Subsidized loans, Direct Unsubsidized Loans, and Direct PLUS loans. Additional information on federal student loans is available on the Federal Student Aid website. 

Nursing loans

The Nursing Student Loan (NSL) program is available if you are a US citizen, US national, or permanent resident who is enrolled at least half-time as an undergraduate or graduate student in a nursing degree program. You may be offered up to $3,300 each academic year, depending on your need. This annual limit increases to $5,200 during your final two years of the nursing program. The aggregate NSL maximum is $17,000. The interest rate is 5%. Interest does not accrue during periods of deferment.

University Trust Fund Loan (UTFL)

If you're an undergraduate who is enrolled full time, you may be offered a University Trust Fund Loan (UTFL) for an amount up to $4,000 per academic year. If you're a full-time graduate student, you may be offered a UTFL for an amount up to $6,000 per academic year.

The current annual interest rate varies and may be as high as 5%. Some UTFLs begin to accrue interest while you attend the University, while others begin to accrue interest after you graduate or leave the University. If you are charged interest while attending the University, that interest rate may change after you graduate or leave the University.

If you accept a UTFL, you will be required to complete and review three separate disclosures at various points throughout the application process:

  • the Private Education Loan Applicant Self-Certification, 
  • a promissory note, and 
  • a loan disclosure form with three personal references.

Because the U.S. Department of Education considers the UTFL a private loan, the rules of the Truth In Lending Act govern the application process for this loan. As a result, all three disclosures must be completed prior to any UTFL funds being disbursed. 

The "Right to Cancel" checklist item is not a document you will need to complete. The checklist item will self-complete after the Right to Cancel period has ended. This waiting period lasts 8 business days.

When you accept a UTFL, you will be sent an email directing you to complete your promissory note and loan disclosure form online.

SELF loans

SELF loans are non-need-based loans funded by the state of Minnesota. They offer the option of fixed or variable interest rates. There is a maximum borrowing annual limit of $20,000 per grade level. SELF loans require a credit-worthy cosigner and quarterly interest-only payments while in school and during grace period. 

For more information or to apply, see the state website on SELF loans.

The lender will automatically notify the University if an application is fully approved and request school certification electronically. Approved loan funds are automatically sent to the University and applied to your student account.

Federal Parent PLUS loan

Federal Parent PLUS loans are non need-based loans funded by the Department of Education. 

To receive a Federal Parent PLUS loan, your parent(s) must apply for the loan through the Federal Student Aid website.

Approved loan funds are automatically sent to the University to be applied to the student account.

See the Federal Student Aid website on PLUS loans for more information and to apply.

Private loans

It is in your best interest to complete the Free Application for Federal Student Aid (FAFSA) and apply for any federal student loans for which you are eligible prior to borrowing private loans.

Private loans are non-need based loans funded by private lenders. They are not part of the federal student loan program (and may have less favorable terms).

The University of Minnesota does not promote nor endorse lenders. You may borrow from any lender you choose. FASTChoice is a tool that University of Minnesota students may use to find information on private loans that are available to them. 

The University recommends that students apply for private loans at least 6 to 8 weeks in advance of the beginning of the semester.

The lender will automatically notify the University if an application is fully approved and request school certification electronically. Loan funds are electronically sent to the University and applied to your student account, though some lenders will send you a paper check that will require your endorsement.