Direct Loan Overview
Federal Student Financial Aid
Federal Financial Aid Rules and Regulations were “reauthorized” by the U.S. Congress in October, 2010. In addition, in April 2011 during budget negotiations, further funding cuts and financial aid laws were enacted. As a result, significant changes have occurred in the recent year, and more changes may occur before the start of fall semester 2012.
The Direct Loan Program offers the following types of loans for Graduate Students as of the current 2012-2013 school year:
- UNSUBSIDIZED: not based on financial need; interest is charged during all periods, even during the time a student is in school and during grace and deferment periods. Students will have a six-month grace period after graduating, leaving school, or dropping below half-time status. Maximum loan amount per academic year $20,500.00
- PLUS: unsubsidized loans for graduate/professional students. PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest is charged during all periods. Note: PLUS loan borrowers cannot have an adverse credit history (a credit check will be done). Repayment on a PLUS loan begins 60 days after the final loan disbursement for the academic year unless the borrower makes deferred payment arrangements with the Direct Loan Servicing Center (1-800-848-0979). Deferred payment on a GRAD PLUS Loan begins six months after the student graduates or drops below half-time in a semester.
- CONSOLIDATION: Eligible federal student loans can be combined into one Direct Consolidation Loan.
The aggregate (total) limit for Direct Subsidized and Unsubsidized Loans is $138,500 for graduate or professional students (no more than $65,500 may be subsidized; includes loans for undergraduate study)
Current Interest Rates for 2012-2013
- For Unsubsidized Direct Loans – 6.8%
- For Plus Loans – 7.9%
Each federal education loan has a loan origination fee that is deducted from the gross amount of the loan that you accept. Student will see a slight change in their disbursed loan amounts because a small, upfront rebate no longer exists
- Unsubsidized loan origination fee = 1%
- Graduate PLUS loan origination fee = 4%