Student Loans

Educational loans must be repaid, generally beginning six months after students cease to be enrolled at least half-time. There is no interest or payment on need-based federal loan programs such as the Federal Perkins Loan or the subsidized Federal Stafford Loan while students are enrolled. The College will determine eligibility for student loan programs by evaluating students' applications for financial aid and will inform them of their eligibility through an Award Notification.

The Federal Perkins Loan is a need-based loan up to $3,000. The interest rate is a fixed 5%. The loan is interest-free while students are in school and during a nine-month grace period after leaving school. The minimum monthly payment is $40 and begins 10 months after leaving school.

The Federal Direct Stafford Loan is a need-based loan up to $3,500 in the first year and $4,500 in the second year. The interest rate is variable, with a cap of 8.25%. The loan is interest-free while students are in school and during a six-month grace period after leaving school. The minimum monthly payment is $50 and begins seven months after leaving school.

The Federal Direct PLUS Loan is a non-need-based loan that parents can borrow to cover remaining educational expenses. The interest rate is variable with a cap of 9%, and carries interest rate payments during the entire length of the loan. The minimum monthly payment is $50, and repayment begins 30 to 60 days after the loan has been fully disbursed. A credit check is performed on all applications.

There are alternative loans available for students needing additional financial aid. An alternative loan is a loan in which students may borrow additional money to cover any remaining education expenses (including some housing costs). These loans are based on creditworthiness and are not guaranteed. For more information, students should contact the Financial Aid department at OTC. Alternative loan lenders include Sallie Mae (Click here to apply online), TERI, Wells Fargo and others.

The Federal Direct Unsubsidized Stafford Loan is a non-need-based loan that students may borrow each year while they are in school. Dependent students may borrow a maximum of $3,500 in the first year and $4,500 in the second year, if they are not eligible for the Direct Subsidized Stafford Loan. Independent students may borrow a maximum of $4,000 each year in addition to the Direct Subsidized Stafford Loan amounts. The interest rate is variable with a cap of 8.25%, and carries interest rate payments during the entire length of the loan. The minimum monthly payment is $50 and begins seven months after leaving school.

For more information, contact our Financial Aid Office at 1.800.322.7000.