Federal Direct Stafford Loans
The Federal Direct Stafford Student Loan Program enables students who are enrolled at least half-time (two units) to borrow from eligible lenders at a low interest rate to help meet educational expenses. The interest on the Federal Direct Stafford Loan may be subsidized or unsubsidized. Eligibility for the interest subsidy is determined by a federal needs formula based upon the information the student and her parents provide on the Free Application for Federal Student Aid (FAFSA). If a student qualifies for the subsidized loan, the federal government pays the interest until repayment begins. If a student does not qualify for the interest subsidy, she may borrow under the unsubsidized program and will be responsible for paying the interest from the time the loan is disbursed until it is paid in full. Under both programs, the principal is deferred as long as the student is enrolled at least half-time.
Repayment begins six months after the student is no longer enrolled at least half-time at an accredited institution. The repayment term ranges from 10 to 25 years depending on the amount borrowed and the repayment plan chosen. The minimum monthly payment is $50. If the student borrows a smaller amount, she will have shorter payment terms. If the student borrows a larger amount, she may wish to consolidate her loan to extend the repayment term. The student should review her options at http://www.ed.gov/DirectLoan. The interest rate for
Subsidized Federal Direct Loans first disbursed on or after July 1, 2011 is 3.4%.
The interest rate for Unsubsidized Federal Direct Stafford Loan is fixed at 6.8%. A loan origination fee of 0.5% will be deducted from the gross amount on all Federal Direct Stafford Loans first disbursed on or after July 1, 2010.
The charts below outline the annual loan limits for the Federal Direct Stafford Loan. Additional information on the Federal Direct Stafford Loan Program is available from the Office of Student Financial Services or the Financial Aid Handbook (which is also available online.)
The Perkins Loan Program is administered by the College from allocated federal funds. Eligibility for a Perkins Loan is determined through a federal needs test. The 5% interest rate and repayment of the loan begin nine months after graduation, withdrawal from the College or dropping below half-time status. No interest accrues on the loan until repayment begins. Cancellation and deferment of loan payments are possible under certain circumstances, which are detailed in the loan promissory note. Awards range from $500 to $4,000 per year and are based on financial eligibility and the availability of funds.
The Federal Direct PLUS Loan is a federally subsidized loan program designed to help parents of dependent undergraduates pay for educational expenses. Repayment begins on the date of the last disbursement. Parent PLUS loan borrowers whose funds were first disbursed on or after July 1, 2009 have the option of delaying their repayment on the PLUS loan either 60 days after the loan is fully disbursed or six months after the dependent student is not enrolled at least half-time. During this time, interest may be paid by the parent or capitalized.
Interest rate on the PLUS Loans borrowed on or after July 1, 2006, the interest rate is fixed at 7.9%. A loan origination fee of 2.5% will be deducted from the gross amount on all Federal Direct PLUS Loans first disbursed on or after July 1, 2011 and before July 1, 2012. By law the total origination fee is 4%, but the Department of Education offers an up-front rebate of 1.5% on this origination fee as an incentive to Direct Loan PLUS borrowers to establish a good repayment relationship. To retain the interest rebate, the parent must make the first 12 required monthly payments on time. If all 12 payments are not made on time, the up-front rebate will be added back to the outstanding balance of the loan.