Loans provide students with an opportunity to defer part of the cost of the education by borrowing now and repaying later at a reduced rate of interest. However, before deciding whether to accept or pursue a loan, carefully read the following section. We urge students not to take a loan for an amount larger than necessary. We also encourage consideration of both part-time employment and cutting down on expenses as ways of keeping aggregate loan debt to a minimum. Students are responsible for keeping track of the aggregate total of their loans and the name of their lender(s). Information regarding the amount of Federal loan you have borrowed may be found at www.nslds.ed.gov.
Federal Direct Loans are available to students who complete a Free Application for Federal Student Aid (FAFSA) and enroll at least half-time in college. The federal government offers loans with an interest subsidy (SUBSIDIZED) to students who show financial need and loans without an interest subsidy (UNSUBSIDIZED), for students who do not show need or show a limited amount of need. If eligible for the interest subsidy, the government will pay the interest on the loan while you are enrolled at least half-time and during the six month grace period. If eligible for an unsubsidized loan, students are responsible for the interest charge upon receipt of the loan, but interest payments may be deferred until a student is no longer enrolled.
Freshmen will be eligible for up to $5,500 a year, sophomores $6,500 a year and all other undergraduate students $7,500 a year. The totals represent the maximum that a dependent student can normally borrow in a combination of the subsidized and unsubsidized loans. The interest rates for loans disbursed after July 1, 2015 is 4.29 percent for subsidized and unsubsidized loans for undergraduate students. Borrowers are normally allowed ten years to repay.
Independent (or dependent students whose parents are denied a Federal PLUS Loan) freshmen or sophomore students may be eligible to apply for up to $4,000 in Additional Federal Direct Unsubsidized Loan funds per year, in addition to the yearly amounts indicated above. Those students beyond the sophomore level may be eligible for an additional $5,000 per year.
The maximum aggregate amount available in a Federal Direct Loan for a dependent undergraduate is $31,000. For independent undergraduate students, the maximum aggregate amount available is $57,500. Of this amount, not more than $23,000 can be subsidized.
Graduate student are eligible for Unsubsidized Direct Loan only, with a maximum of $20,500/year. The aggregate maximum is $138,500, which includes all direct loan funds received for undergraduate study. The interest rate as of July 1, 2015 is 5.84 percent.
If a Federal Direct Loan is included in your financial aid award and you have indicated that you would like to take advantage of this aid source, a Master Promissory Note and Entry Counseling may need to be completed during your first term of borrowing. If the promissory note and entry counseling has been completed, the funds will be available to you at the beginning of each term/semester. After signing the Master Promissory Note the first time, a new note will normally not be required for subsequent borrowing. The amount of your disbursement will equal the amount you request or are eligible for minus an origination fee. The loan will typically be divided into three disbursements, but will depend on your enrollment plans.More about Federal Direct Loans
Federal Parent Loans (PLUS) are available to parents who have a dependent child in college. Parent must be a U.S. citizen or eligible non-citizen. These loans are guaranteed by the federal government. Individual eligibility is determined by subtracting other financial aid from the cost of education and credit analysis. There will be an origination fee subtracted from the disbursement(s). Financial need is not a prerequisite. Monthly repayment, with an interest rate of 6.84 percent, begins within 60 days after the loan is fully disbursed. This rate is subject to change in July of every year. A parent borrower may request a forbearance while the student is enrolled at least half-time. The borrower may usually take 10 years to repay the loan BVU must receive the results of a FAFSA, and a Federal Direct Loan must be originated while a student is still enrolled in the enrollment period for which the loan is intended.More about Federal Parent Loans for Undergraduate Students (PLUS)
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