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Financial Aid

Education Loans

Federal Direct Student Loans

Subsidized and unsubsidized loans are federal student loans for eligible students to help cover the cost of higher education at a four-year college or university; community college; or trade, career, or technical school. The U.S. Department of Education offers eligible students at participating schools Direct Subsidized Loans and Direct Unsubsidized Loans. (Some people refer to these loans as Stafford Loans or Direct Stafford Loans.)

Federal Direct Subsidized Loans are available to students who demonstrate financial need. Under the subsidized loan program, interest is not charged on the loan:

  • During periods of at least half-time enrollment
  • During grace periods
  • During periods of deferment

Federal Direct Unsubsidized Loans are available to students who meet the criteria listed in Loan Process. Unlike the Subsidized Loan, interest on the Unsubsidized Loan begins from the date the loan is disbursed until it is paid in full.

Interest Rates

Interest Rates for New Direct Loans

LoanInterest Rate
Direct Subsidized Loans (Undergraduates) 4.45%
Direct Unsubsidized Loans (Undergraduates) 4.45%
Direct Unsubsidized Loans (Graduate Students) 6.00%

The interest rates listed above are effective for borrowers with a first disbursement date between July 1, 2017 and June 30, 2018 and are fixed for the life of the loan.

Borrowing Limits

The amount a student can borrow is regulated by the Department of Education and is based on their year in school and dependency status, as determined by the FAFSA. There is also an overall limit based on the student’s cost of education.

Academic ClassDependent StudentIndependent Student
Freshman (0 – 29 Earned Credits) $5,500 $9,500
Sophomore (30 – 59 Earned Credits) $6,500 $10,500
Junior (60 – 89 Earned Credits) $7,500 $12,500
Senior (90 or more Earned Credits) $7,500 $12,500
Graduate Student N/A $20,500

NOTE: For freshmen, only $3,500 may be subsidized; for sophomores $4,500; for juniors and seniors $5,500. Graduate students are not eligible for subsidized direct loans.

The Department of Education also limits the total debt you may have outstanding. The maximum amount of combined loans a student may have is as follows:

  • $31,000 as a dependent undergraduate student, only $23,000 of which may be subsidized
  • $57,500 as an independent undergraduate student, only $23,000 of which may be subsidized
  • $138,500 as a graduate or professional student, only $65,500 of which may be subsidized (this includes debt incurred as an undergraduate)

Loan Fees

Your loan servicer will charge a fee for processing your loan. This fee will be deducted from your loan prior to disbursement to your student account. It is important to consider this when calculating how much you need to cover your student bill.

Loan TypeOctober 1, 2017 - September 30, 2018
Direct Stafford Loan - Unsubsidized (Graduate/ Professional Students) 1.066%

Federal Direct Parent PLUS Loans

The PLUS loan is a loan parents can obtain for the dependent, undergraduate student(s). It is a credit-based loan in the parent’s name and is intended to supplement the student’s other financial aid resources. The PLUS loan is not based on financial need, but parents must demonstrate credit-worthiness to receive the loan. If your parent is interested in applying for the PLUS loan, they can go to studentloans.gov and apply. The student must have a valid FAFSA on file with the school before a parent can be considered for a PLUS loan.

A credit check will be performed during the application process. If you have an adverse credit history, you may still receive a Direct PLUS Loan through one of these two options:

  1. Obtaining an endorser who does not have an adverse credit history. An endorser is someone who agrees to repay the Direct PLUS Loan if you do not repay it. If you are a parent borrower, the endorser cannot be the child on whose behalf you are borrowing.
  2. Documenting to the satisfaction of the U.S. Department of Education that there are extenuating circumstances relating to your adverse credit history.

With either option 1 or option 2, you also must complete credit counseling for PLUS loan borrowers at studentloans.gov.

If a parent borrower is unable to obtain a PLUS loan, the undergraduate dependent student may be eligible for additional unsubsidized loans.

Interest Rates

Interest Rates for New Direct Parent PLUS Loans

LoanInterest Rate
Direct PLUS Loans (Parents) 7.00%

The interest rate listed above are effective for borrowers with a first disbursement date between July 1, 2017 and June 30, 2018 and are fixed for the life of the loan.

Borrowing Limits

The maximum PLUS loan amount you can borrow is the cost of attendance (determined by the school) minus any other financial assistance received.

During the application process, you will either indicate a specified dollar amount or request that the school process the award based on your student’s maximum level of eligibility.

Loan Fees

Your loan servicer will charge a fee for processing your loan. This fee will be deducted from your loan prior to disbursement to your student account. It is important to consider this when calculating how much you need to cover your student bill.

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Loan TypeOctober 1, 2017 - September 30, 2018
Direct Parent PLUS Loan 4.264%

*Private Education Loans

Private loan programs are becoming more popular among students and parents as tuition costs rise. In short, private loans, also referred to as alternative loans, are non-federal loans made to students to help cover the cost of tuition. These loans are based on consumer credit and feature competitive interest rates. Most students require a co-signer. Students can borrow up to the cost of attendance less any financial aid received.

Before borrowing through a private education loan program, students/parents should compare the differences between federal parent PLUS and private student loans:

Private Student Loans

Federal Student LoansPrivate Student Loans
You will not have to start repaying your federal student loans until you graduate, leave school or change your enrollment status to less than half-time. Many private student loans require payments while you are still in school.
The interest rate is fixed and is often lower than private loans—and much lower than some credit card interest rates. Check the current interest rates on federal student loans. Private student loans can have variable interest rates, some greater than 18 percent. A variable rate may substantially increase the total amount you repay.
Undergraduate students with financial need will likely qualify for a subsidized loan where the government pays the interest while you are in school on at least a half-time basis. Private student loans are not subsidized. No one pays the interest on your loan but you.
You don’t need to get a credit check for most federal student loans (except for PLUS loans). Federal student loans can help you establish a good credit record. Private student loans may require an established credit record. The cost of a private student loan will depend on your credit score and other factors.
You won’t need a cosigner to get a federal student loan in most cases. You may need a cosigner.
Interest may be tax deductible. Interest may not be tax deductible.
Loans can be consolidated into a Direct Consolidation Loan. Learn about your consolidation options. Private student loans cannot be consolidated into a Direct Consolidation Loan.
If you are having trouble repaying your loan, you may be able to temporarily postpone or lower your payments. Private student loans may not offer forbearance or deferment options.
There are several repayment plans, including an option to tie your monthly payment to your income. You should check with your lender to find out about your repayment options.
There is no prepayment penalty fee. You need to make sure there are no prepayment penalty fees.
You may be eligible to have some portion of your loans forgiven if you work in public service. Learn about loan forgiveness programs. It is unlikely that your lender will offer a loan forgiveness program.
Free help is available at 1-800-4-FED-AID and on our websites. The Consumer Financial Protection Bureau’s private student loan ombudsman may be able to assist you if you have concerns about your private student loan.

A variety of lenders participate in these loan programs. When applying for a private loan, it is important to do your homework.

Each of these loan programs is different, and you want to be certain you are getting what is right for you. Spend a few moments comparing interest rates, fees, repayment terms and requirements.


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