Types of Federal Student Loans
Federal student loans are available to help students and their families cover the cost of higher education. These student loans offer long-term, low-interest financing to eligible students. To qualify for federal student loans, students must be enrolled at least half-time (6 credit hours for undergraduates or 5 credit hours for graduate students) each term. Unlike grants or scholarships, loans must be repaid, with repayment typically beginning six months after the student leaves school, graduates, or drops below half-time enrollment.
Federal Direct Subsidized Loans (also referred to as Stafford Loans)
Direct Subsidized Loans are available to undergraduate students with financial need only. Interest does not accrue on these loans so long as a student is enrolled at least half time.
The school will determine the amount a student can borrow based on cost of attendance and other financial aid received. This loan is commonly referred to as Direct Stafford Loan. This loan requires one time Entrance Loan Counseling and completion of Master Promissory Note.
Federal Direct Unsubsidized Loans (also referred to as Stafford Loans)
Direct Unsubsidized Loans are available to undergraduate and graduate students; and there is no requirement to demonstrate financial need. The school will determine the amount a student can borrow based on cost of attendance and other financial aid received. Interest is charged throughout the life of the loan. The borrower may choose to pay the interest charged on the loan or allow the interest to be capitalized (added to the loan principal). This loan is commonly referred to as Direct Stafford Loan. This loan requires one time Entrance Loan Counseling and Completion of Master Promissory Note.
Federal Direct Parent Loan for Undergraduate Dependent Students (PLUS)
The Federal Direct Parent Loan for Undergraduate Students (PLUS) is not based on financial need and is limited to a parent borrower for a dependent student attending at least half-time. To receive a Direct PLUS Loan, the student must complete the Free Application for Federal Student Aid (FAFSA®), and the student’s eligible parent borrower must complete a Direct PLUS Loan Application at studentaid.gov (PLUS) An eligible parent borrower is currently defined as a person's natural or adoptive mother or father, or the step-parent married to the custodial parent. The annual limit is equal to the student's cost of attendance, minus any other financial aid the student is receiving. Parents are required to pass a credit check. PLUS loans carry a fixed interest rate and an origination fee.
Federal Graduate PLUS Loan for Graduate Students (Grad PLUS)
The Federal Graduate PLUS Loan for Graduate Students (Grad PLUS) is not based on financial need and is limited to graduate and professional level students attending at least half-time. To receive a Direct Grad PLUS Loan, the student borrower must complete the Free Application for Federal Student Aid (FAFSA®), and complete a Direct PLUS Loan Application at studentaid.gov (Grad Plus) The annual limit is equal to the student's cost of attendance, minus any other financial aid the student is receiving. Direct Lending checks each applicant to ensure he/she has no adverse credit history. (Not having established credit is not the same as having adverse credit history and, therefore, does not prevent one from applying for the Graduate PLUS Loan). PLUS loans carry a fixed interest rate and an origination fee.
Subsidized and Unsubsidized (undergraduate program) 6.533%
Unsubsidized (graduate program/professional) 8.083%
Parent PLUS (undergraduate program/dependent student) 9.083%
Graduate PLUS (graduate program/professional) 9.083%
| Dependent Undergraduate | Dependent Undergraduate with a Parent PLUS Loan Denial* | Independent Undergraduate | |
|---|---|---|---|
| Freshman |
$5,500 A maximum of $3,500 may be subsidized |
$9,500 A maximum of $3,500 may be subsidized |
$9,500 A maximum of $3,500 may be subsidized |
| Sophomore |
$6,500 A maximum of $4,500 may be subsidized |
$10,500 A maximum of $4,500 may be subsidized |
$10,500 A maximum of $4,500 may be subsidized |
| Junior/Senior |
$7,500 A maximum of $5,500 may be subsidized |
$12,500 A maximum of $5,500 may be subsidized |
$12,500 A maximum of $5,500 may be subsidized |
| Aggregate Loan Amounts |
$31,000 A maximum of $23,000 may be subsidized |
$57,500 A maximum of $23,000 may be subsidized |
$57,500 A maximum of $23,000 may be subsidized |
If the parent borrower is denied a Direct Parent PLUS loan, the dependent student may be eligible for an additional Direct Unsubsidized Loan. However, if the parent borrower is later approved for the Direct PLUS loan, or another parent borrower is later approved, the dependent student will no longer be eligible for the additional Direct Unsubsidized Loan.
| Graduate Program | $20,500 annual limit | $138,500 aggregate limit |
|---|---|---|
| Professional/VetMed Program | $40,500 annual limit | $224,000 aggregate limit |
The graduate debt limit includes Direct Loans received for undergraduate study.