As of this academic year, graduate students have a new means of securing loans in advance of their stipends.
The Duke Credit Union has partnered with the Graduate School in order to provide graduate students with short-term loans. The two new packages are the Graduate Student Assistance Program and the Helen & Gordon McKinney Emergency Loan Fund.
Graduate students are paid monthly stipends, the first of which they receive in September after Duke has confirmed that they are on campus and ready to start classes. In the past, however, this has proven an inconvenience for incoming students who want to put down payments on a house but need the stipend money in order to do so.
Amol Yadav, president of the Graduate & Professional Student Council said, “The new loan wasn’t on the GPSC agenda for last year, but the GPSC President Bill Hunt initiated a dialogue with Graduate School Dean Paula McClain about students not getting their stipends until the end of September and having trouble financially, since they already move in early August.”
The Duke University Credit Union decided to partner with the Graduate School this year to assist graduate students.
“We knew that students were arriving in August short on cash and so we partnered with the graduate program to offer a loan product,” said Scottie Dowdy, a financial counselor at the credit union.
GSAP offers students loans of up to $2,500 for up to one year at a competitive interest rate. Students can use this money to settle into a new home or purchase a new computer.
In order to qualify for a GSAP loan, graduate students who receive a stipend from the University must first become a member of the Duke University Federal Credit Union with a minimum deposit of $25 in a savings account. These students can then apply and upon approval, loan payments can be made via mail, electronic payment, payroll deduction or in-person.
The interest rate is 8.75 percent during the course of 12 months, which some graduate students consider to be steep.
“Something that I’ve heard from students is that the interest rate seems to be higher than expected,” Yadav said.
Because the GSAP loan is an unsecured loan as opposed to a student loan, it necessitates an interest rate.
“Students may be used to no interest rates on student loans but this rate is pretty good for an unsecured loan,” Dowdy said, “It’s less than what you’d pay for a credit card.”
Another loan available to graduate students came into existence this year. The Helen & Gordon McKinney Emergency Loan was created by the graduate school with funds from the Helen McKinney trust.
“Based on the guidelines in terms of the trust, we were able to utilize available resources and turn it into student funding,” said Shanna Fitzpatrick, director of budgets and finance at the Graduate School.
The emergency loan was advertised at orientation during multiple financial seminars in which the loan was introduced.
Five applications for the emergency loan have been submitted so far, and all five were approved.
The graduate school expects additional applicants for the emergency loan throughout the year.
“People are thrilled to have loans approved, based on the brief interaction that our office has had, students seem very appreciative of having emergency funds available,” Fitzpatrick said.
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