LOAN FUNDAMENTALS

Federal Direct Loans ( website )

Federal Direct Loans are available to undergraduate and graduate students who enroll at least half-time. Subsidized Federal Direct Loans are awarded to students demonstrating financial need. Students are not responsible for interest accrued on Subsidized Direct Loans while in school. Unsubsidized Federal Direct Loans are awarded to students who do not qualify for the Subsidized Direct Loan or do qualify and are still in need of additional funding. Students are responsible for interest accrued on Unsubsidized Direct Loans while in school. Annual Direct borrowing limits for dependent undergraduate students are $5,500 for freshmen, $6,500 for sophomores and $7,500 for undergraduate students beyond sophomore standing. Independent undergraduate students may borrow additional unsubsidized loans beyond the above stated limits (additional amount depends on academic standing). Graduate students may borrow up to $20,500 per year in the Direct Loan Program. Repayment of principal and accrued interest begins six months after the student graduates, withdraws, or drops below half time enrollment. In order to receive a Direct Loan, students must first file a Free Application for Federal Student Aid (FAFSA)

Federal Direct PLUS Loans ( website )

The Federal Direct PLUS Loan is a low interest loan available to assist the parents of dependent students admitted and enrolled in an undergraduate degree program or graduate students admitted and enrolled in an graduate degree program. To be eligible for the Direct PLUS Loan, the parent borrower or the graduate student borrower should have no adverse credit history. Maximum eligibility is equal to cost of education minus other aid. Repayment of principal and interest begins within 60 days after the loan is fully disbursed. The borrowers may be eligible to defer repayment until student graduates or ceases to be enrolled at least half-time. In order to receive a Direct PLUS Loan, students must first file a Free Application for Federal Student Aid (FAFSA) .

Private Education Loans

Private Education Loans are a financial resource for students that are trying to bridge the gap between expenses and other forms of aid, but you should cautiously consider the amount of student loan debt that you incur. Student loan debt has serious long term financial obligations and it is a debt that must be repaid. You will be charged interest in addition to the amount that you borrow. If you fail to make your monthly payments on time, it could affect you credit rating and your ability to borrow money for other purposes, such as purchasing a car or a home.


Direct Loan Fact Sheet

Grad PLUS Loan Fact Sheet

Parent PLUS Loan Fact Sheet

Federal Loan Fees and Interest Rates

Student Education Loan Comparison Chart for Direct, PLUS and Private Loans

Factors to Consider When Borrowing

 

Last Modified - 05/18/2011

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