Loans
There are two programs that provide federal loans for education:
- Federal Family Education Loan Program (FFELP), through which education loans are offered by private lenders.
- Federal Direct Loan Program (FDLP), through which loans are administered by the U.S. Department of Education.
The types of loans available are the same in both programs. Which type you obtain will depend on the school you choose to attend.
Types of Loans:
Stafford Subsidized Loans
Interest: Paid by the federal government while you are in school, deferment or grace periods. Variable interest rates depend upon the Treasury Bill interest rate which is subject to change every July 1.
For loans disbursed on or after July 1, 2006:
- During in-school, grace or deferment period: Fixed 6.8%
- During repayment period: Fixed 6.8%
Payments: No payments are required while you are in school. Repayment begins six months after you leave school, you graduate, or you go below half-time status. This six month period is known as a grace period.
Qualifications: Stafford Subsidized Loans are need-based. The Financial Aid Office will determine need using the information you provided on your completed Free Application for Federal Student Aid (FAFSA).
Stafford Unsubsidized Loans
Interest: All of the interest that is accrued on an unsubsidized loan is the borrower's responsibility. None of the interest is paid by the federal government. If you choose not to pay the interest during school, the interest will be added to the principal (also known as "capitalizing" or "compounding") when your loan goes into repayment. Variable interest rates depend upon the Treasury Bill interest rate which is subject to change every July 1.
For loans disbursed on or after July 1, 2006:
- During in-school, grace or deferment period: Fixed 6.8%
- During repayment period: Fixed 6.8%
Payments: No payments are required while you are in school. Repayment begins six months after you leave school, you graduate, or you go below half-time status. This six-month period is known as a grace period.
Qualifications: Loan limits for Stafford Unsubsidized Loans are not need-based like Subsidized Stafford Loans. The Financial Aid Office will determine your eligibility based on the information you provided on the FAFSA.
PLUS Loans - Parent Loans for Undergraduate Students
Interest rate:
For loans disbursed on or after July 1, 2006:
- During in-school or deferment period: Fixed 8.5%
- During repayment period: Fixed 8.5%
Payments: Repayment of the loan begins 30-45 days after the loan has been fully disbursed. The parent (not the child) is responsible for repayment of the loan.
Qualifications: A parent must not have any adverse credit within the previous five years.
Graduate PLUS Loans
Interest rate:
For loans disbursed on or after July 1, 2006:
- During in-school or deferment period: Fixed 8.5%
- During repayment period: Fixed 8.5%
Payments: Repayment of the loan begins 30-45 days after the loan has been fully disbursed. In-school deferments are available to postpone repayment until AFTER school is completed.
Qualifications: Borrower must not have any adverse credit history within the previous five years.
Perkins Loans
Interest rate: Fixed interest rate of 5.0%.
Payments: No payments are required while you are in school. Repayment begins nine months after you leave school, graduate, or go below half-time. A portion of the debt may be forgiven in certain cases (examples include teaching in a low income school, or a career in law enforcement). Contact your school's Financial Aid Office for more information.
Qualifications: Unlike Stafford and PLUS Loans, Perkins Loans are given directly by the schools and are only available to students with the greatest need.
All information contained in this Web site is subject to change without notice, depending in part, on changes to the Federal Higher Education Act. Your benefits will not be affected if your loan has already been disbursed.