Loans
Federal Direct Stafford Loans (Student Loans)
There are two types: subsidized loans and unsubsidized loans. The types and amounts of loans you will be offered will be determined by your financial eligibility as calculated by the Federal Processor, your Dependency Status, and your grade level. Students receiving loans must be enrolled in at least six units to be eligible. Classified and conditionally classified graduate students meet this requirement with 4 units. For more information on these loans visit the Direct Loans web site.
- Subsidized Loans
- These are awarded based on calculated financial need. The federal government pays the interest while you are in college and during the six-month grace period after you graduate, leave school or drop below half-time enrollment.
- Unsubsidized Loans
- Unsubsidized loans are for eligible students, regardless of income and assets. You are responsible for paying the interest, but you can have it deferred while you are in college and during the grace period. If you do, the interest will be capitalized, which means that it is added to the principal amount you borrowed. Future interest will be calculated based on the higher loan amount. Therefore, it is to your advantage to pay the interest as you go along, so will pay less in the long run. You will receive quarterly statements and can chose to pay the amount due or have it deferred.
Interest Rate and Origination Fees
As of July 1, 2006 the interest rate is fixed at 6.8%. There is also a 2.5% origination fee. However, there is a 1.5% rebate that is given to you up front, so you end up being charged only 1% for your processing fee.
Repayment of Loans
Regardless of your loan type, subsidized or unsubsidized, you do not need to begin repaying your loans until six months after you have graduated or your enrollment has dropped below half-time. This six-month period of time is called your Grace Period.
Loan Limits
Loans are subject to annual limits set by the federal Department of Education.
| Loan Type Maximum Amounts | ||
|---|---|---|
| Grade Level | Dependent | Independent |
| Freshman | $3,500 |
$7,500 (maximum $3,500 subsidized) |
| Sophomore | $4,500 |
$8,500 (maximum $4,500 subsidized) |
| Junior/Senior, 2nd Bachelor | $5,500 |
$10,500 (maximum $5,500 subsidized) |
| Credential, Unclassified Grad (taking pre-requisites) | $5,500 |
$12,500 (maximum $5,500 subsidized) |
| Graduate Students | N/A | $20,500 (maximum $8,500 subsidized) |
- Total maximum amount of Direct Loans allowed for Undergraduates is $46,000, of which no more than $23,000 may be in subsidized funds.
- Seniors graduating in the fall semester are subject to proration of their Direct Loan amount, based on the number of their registered units. This is a federal requirement.
- Total maximum amount of Direct Loans allowed for Master’s degree students is $138,500, of which no more than $65,500 may be in subsidized funds.
Parent Loan for Undergraduate Students (PLUS)
PLUS loans are for parents and step-parents of dependent students. Borrowers must meet credit history and debt burden requirements. As of July 1, 2006 the interest rate is fixed at 7.9%. PLUS loans are always unsubsidized, and interest begins accruing after the first disbursement. The processing fee is 4%, but there is a 1.5% rebate given up front, so you end up being charged just 2.5% for the processing fee. Repayment begins 60 days after the second disbursement. Parents or step-parents who would like to apply for a PLUS loan must fill out a PLUS Loan Application each academic year. Refund of excess financial aid checks consisting of PLUS funds will be made payable to the parent borrower and mailed to the parent's home address.
Federal Perkins Loans (Student Loan)
Federal Perkins Loans are low-interest loans for undergraduate and graduate students with exceptional financial need. They are awarded by colleges, and colleges are also the lender. Interest does not accrue while you are enrolled at least half time. You must begin repaying your loan nine months after you graduate or are enrolled less than half-time. The interest rate at repayment is fixed at 5% and there are no loan processing fees.
The Perkins loan requires a separate promissory note and/or other forms that will be mailed to you by the Financial Services Office.
Master’s students eligible for PLUS
The Direct Grad PLUS Loan is available to students who are admitted to a Master’s program and are attending at least half-time (4 units). The interest rate on the Grad PLUS Loan is 7.9%. After borrowing the annual aggregate subsidized and unsubsidized loans available to you, the Grad PLUS Loan can be used to borrow beyond the annual aggregate federal loan limits. A credit check is required to determine if the borrower has an adverse credit history. Please contact the Financial Aid Office for more information.
Alternative Loans
For information on alternative loans, please visit the Alternative Loans page of our web site.