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Stafford Loans

Student loans, unlike grants and work study, are borrowed money that must be repaid with interest. Loans are legal obligations, so before you borrow a student loan, think about the amount you’ll have to repay over the years, as well as the kind of job you will be pursuing to be able to afford repayment of your student loans.

Effective summer 2010, as a result of the Health Care and Education Reconciliation Act of 2010 (HR 4872), all Stafford loans will be processed under the William D. Ford Federal Direct Loan Program.

Effective July 1, 2011 as a result of the Budget Control Act of 2011, the interest subsidy for graduate and professional students has been eliminated.

On July 6, 2012, President Obama signed a new regulation into law (MAP-21), which placed a limit on Direct Subsidized Loan eligibility for first time borrowers borrowing on or after July 1, 2013. Subsidized loan eligibility for these first time borrowers will be capped at 150 percent of the published length of the program in which the borrower is enrolled under. For example, if your program requires four year to complete, you are limited to 6 years of subsidized borrowing (if eligible). The purpose of this statutory change is to encourage students to complete their academic program in a timely manner and avoid incurring unnecessary student loan debt.

Loans may take up to eight weeks to fully process. This process largely depends on YOU. Once the loan data form is submitted to the Financial Aid Office (your FAFSA must be complete; entrance counseling complete and you must be enrolled in courses applicable to your degree or program of study); your loan is certified and originated by our office. You must sign your master promissory note before loan money will be released.  It is best to turn in your Loan Data Form when you submit your FAFSA. Otherwise, you can choose to wait for your award letter in late May or early June to determine how much more, in addition to what your current awards, you might require. Remember, always borrow conservatively. Plan ahead if you will be enrolling in the summer sememster!

The maximum amount of what you may borrow using a Stafford Loan depends on other aid you may have in your financial aid package. It also depends on your student classification and the cost of attendance at Highlands. Loans based on financial need and dependency status are subsidized, which means that interest will not be charged until you graduate or leave school and begin repayment.

Interest on Stafford Loans will not exceed 8.25% and will vary according to economic conditions. For current interest rate updates, go to

You do not want to borrow any more than you need. Remember, this is a loan that must be repaid with interest. For example, you may have $3,500 available to you, however, you may choose to borrow only $200. Also, remember the maximum annual loan amount is the total available to you in an academic year: fall, spring and summer (if enrolling). Also, this includes amounts you may have borrowed elsewhere if you are a mid-year transfer student. You will need to budget a certain amount from this total to cover each semester.

A financial aid adviser can help you understand the details of a Stafford Loan.

Borrowers at Highlands must complete an online loan entrance counseling session at before a loan will be processed. Once the loan has been processed, then go back to and sign your master promissory note (MPN) on this website. One MPN will allow you to continue to borrow direct loans through your entire undergraduate and/or graduate education, if you borrow continuously for a maximum of ten years.

You will receive the Stafford Loan in two disbursements. For a two-semester loan, you will receive the first credit to your student account receivable (SAR) on the third Friday after the beginning of the fall semester and the second disbursement on the third Friday of the spring semester. Loan amounts exceeding your charges will be reimbursed to you on the third Friday of each semester. For a one-semester loan, you will be credited with the first disbursement on the third Friday of the semester, and the second disbursement the week of midterms. Freshmen and first-time borrowers will not receive their first disbursement until 30 days after classes have begun.

Federal Subsidized Stafford Loan

Qualifications: Undergraduate students only; need based.
Annual Amount: Up to $3,500 to $5,500, depending on grade level.
Deadlines & Application: Free Application for Federal Student Aid (FAFSA); Loan Data Form.
Deadline: No later than two weeks prior to the end of semester. Otherwise, release will be subject to satisfactory academic progress review for late disbursement.
Description: To be eligible for the Stafford Loan, as well as other federal financial aid, fill out the FAFSA application or Renewal FAFSA.

Federal Unsubsidized Stafford Loan

Qualifications: Undergraduate and graduate students.
Annual Amount: Up to $3,500 to $20,500, depending on grade level and subject to cost of attendance (budget).
Deadlines & Application: Free Application for Federal Student Aid (FAFSA); Loan Data Form.
Deadline: No later than two weeks prior to the end of semester. Otherwise, release will be subject to satisfactory academic progress review for late disbursement.
Description: To be eligible for the Stafford Loan, as well as other federal financial aid, fill out the FAFSA application or Renewal FAFSA.

Federal PLUS Loan

Qualifications: Available to parents of dependent undergraduate and graduate students.

Annual Amount: Cost of attendance minus any other financial aid received. Cannot exceed cost of attendance.
Deadlines & Application: Free Application for Federal Student Aid (FAFSA); PLUS Loan Application prescreening form. Deadline – No later than two weeks prior to the end of semester.
Description:  eligibility for this loan is based on credit worthiness and approval from the Federal Department of Education. Repayment conditions apply.

Federal Perkins Loan

Qualifications: Undergraduate and graduate students; need based.
Annual Amount: Up to $3,000 undergraduates; up to $5,000 graduates.
Deadlines & Application: March 1, Free Application for Federal Student Aid (FAFSA) and complete file by April 15.

Description: The Perkins Loan is given to undergraduates and graduates, in-state and out-of-state students, with financial need. Be sure to indicate your interest in receiving loans on the FAFSA form. Students pursuing a second bachelor’s degree or educational/professional licensure are also eligible for the Perkins Loan.

Funds for the Perkins Loan are limited, as they come from previous borrowers in repayment. Make sure your FAFSA is submitted by March 1, and your file complete by April 15 for award consideration.

The Perkins Loan is repaid by you to the university through a third party servicer, New Mexico Student Loans. Interest (five percent) and payments are deferred until nine months after graduation, after you leave school, or drop below six hours (called a grace period). The repayments of previous loan recipients create the money for current ones.

In certain circumstances, your Perkins Loan repayments may be deferred, postponed, or cancelled. Some of these circumstances include becoming a teacher, nurse or health care professional, law enforcement officer, Peace Corps volunteer, or member of the armed forces. For more information on these options, contact the Financial Aid Office or New Mexico Student Loans.

The Perkins Loan is part of your Financial Aid Package. Each academic year, you will complete a Perkins Entrance Counseling session and sign a promissory note before these funds can be disbursed.  The loan amount will then be applied to your student account receivable on the third Friday of each semester.

Alternative Private Loans

A private alternative loan is a non-federal educational loan, through a private lending institution, typically issued in the student’s name and requiring a co-signer. These loans vary in the terms, conditions, and eligibility requirements.

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 alternative loans. Compare Federal Loans to Private.

Why borrow an Alternative (Private Loan)?
Federal student loans provide the most favorable terms, so apply first for any federal loans for which you are eligible. If you need additional support, you may wish to evaluate private loan options.

A private loan may be an appropriate choice for you, if:

  • You have been offered and accepted the maximum annual amount for all federal loans and still have a difference between the cost of attendance and the total financial aid you have received.
  • You are ineligible for a federal loan. You may still qualify for a private loan because such programs are not bound by the same federal regulations. For example, if you are not making satisfactory academic progress, are in default on a federal loan, or did not respond to verification requests, you may be eligible for private loans instead.
  • You owe a balance from a previous semester. You may be able to receive a private loan for an earlier loan period.
  • You have read the comparison chart federal vs. private loans and still believe that a private loan is a better choice for you and your family.

How do I apply for an Alternative (Private) Loan?
1. To apply for an Alternative Private Loan you must contact the private lender of your choice and complete their private loan application. The Financial Aid Office does not have access to private lender applications, nor does NMHU endorse any particular Lender. The student needs to contact the lender/bank directly for information on the private loan application process.
2. Visit FastChoice to explore some of your private loan options.
3. By applying for a Private (Alternative) School Loan, the Lender of your choice will send a “School Certification Form” to NMHU for processing (the majority of Private loan certifications are done electronically).
4. Once NMHU receives the certification request from the lender, the Cost of Attendance (COA) and loan eligibility information is sent. NOTE: Private (Alternative) Loans are only available to students whose cost of attendance has not already been met with other aid. If a student applies for a private loan, and NMHU is unable to process it due to the COA being maximized with other types of financial aid the certification will send it back with “ZERO” ($0) eligibility.
5. From the time the certification is received from the lender, NMHU needs 7-10 business days to complete and send back the certification. You (the student) must begin the process of certification with the lender. NMHU cannot begin this process for you and is subject to the timeline of the lender as well. Once the funds are received electronically from the lender we need 5-7 business days in order to process and release those funds.

Code of Conduct

To ensure the highest ethical standards, the US Department of Education requires that a “Student Loan Code of Conduct” be maintained and published by all financial aid offices.

At NMHU, we never have and never will:

  • Accept payment from any outside entity in exchange for loan referrals or preferential treatment
  • Accept gifts from an outside entity for loan referrals (a gift is defined as any gratuity, favor, discount, entertainment, hospitality, loan, or other item having monetary value of more than a de minimus amount). A gift is NOT a brochure used for default aversion or financial literacy. Food, training or informational material provided as part of training to improve services. Entrance or Exit counseling assistance that does not promote a lender. Philanthropic contributions unrelated to loans; state education grants or scholarships
  • Accept consulting fees or other contractual financial benefit from a provider of student loans
  • Intentionally delay certification of loans from any lender or automatically assign students to a particular lender
  • Accept services or staffing assistance from any outside entity in exchange for referrals or preferential treatment
  • Accept compensation in exchange for appointments to advisory boards or committees of any entity involved in the processing of alternative student loans
  • Accept a pool of funds from a lender to establish a university loan in exchange for federal loan referrals


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