Federal Loans

Federal loans are borrowed funds that you must repay with interest. A federal student loan allows students and their parents to borrow money to help pay for college through loan programs supported by the federal government. They have low interest rates and offer flexible repayment terms, benefits, and options.

What kinds of federal student loans are available?

Federal Loan Program Loan Details (subject to change)

Direct Subsidized Loan

  • For undergraduate students who are enrolled
    at least half-time (6 credits)
  • Demonstrate financial need
  • Interest is 4.45% for loans first disbursed between
    July 1, 2017 and June 30, 2018
  • Student is not charged interest on the loan while in school
    at least half-time and for 6 months after dropping
    below half-time
  • The U.S. Department of Education (ED) is the lender;
    payment is owed to ED (via a loan servicer)

Direct Unsubsidized
Loan

  • For undergraduate and graduate student who are enrolled at
    least half-time (6 credits for undergraduates and 4.5 credits
    for graduates)
  • Financial need is not required
  • For loans first disbursed between July 1, 2017 and
    June 30, 2018, interest is 
    • 4.45% for undergraduate students and
    • 6.00% for graduate and professional students
  • Interest begins accruing after first disbursement
  • ED is the lender; payment is owed to ED (via a loan servicer)

Direct PLUS Loan

  • For parents of dependent undergraduate students and for
    graduate/professional students
  • Financial need is not required
  • Parent/borrower must pass a credit check
  • Student must be enrolled at least half-time
     (6 credits for undergraduates and 4.5 credits for graduates)
  • Interest is 7.00% for loans first disbursed between
    July 1, 2017 and June 30, 2018
  • Interest begins accruing after first disbursement
  • ED is the lender; payment is owed to ED (via a loan servicer)
  • Apply for the PLUS Loan at studentloans.gov

Federal student loans have loan fees that are deducted proportionately from each loan disbursement you receive. This means the money you receive will be less than the amount you actually borrow. You're responsible for repaying the entire amount you borrowed and not just the amount you received.

Here are the loan fees for federal student loans first disbursed on or after Oct. 1, 2016:

  • 1.069% for Direct Subsidized Loans and Direct Unsubsidized Loans
  • 4.276% for Direct PLUS Loans for parents and graduate/professional students

Loan Repayment

Remember, federal student loans are real loans, just like car loans or mortgages. You must repay a student loan even if your financial circumstances become difficult. For detailed information on repayment plans, consolidation, deferment, etc. please go to studentaid.ed.gov. Loan history and lender contact information is found at nslds.ed.gov. 

A loan repayment calculator can be found here. 

 

Questions