Congress made major changes to the interest rates on the federal loan programs in July 2013. Various other changes to the terms of some loans during the grace period and the total period of time for which loans can have subsidized interest have also been made recently. Student and parent borrowers may have loans with different terms. For a detailed explanation of the terms of your loans, you must contact your loan servicer. Your loan will be assigned to a servicer after your first disbursement is made. Your servicer's contact information will always be available to you through the National Student Loan Data System website, NSLDS - Student Access.
Federal Direct Subsidized and Unsubsidized Loans (Student Loans)
The type and amount 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. Most students receiving loans must be enrolled in at least 6 units to be eligible. Classified and conditionally classified graduate students meet the enrollment requirement with 4 units. For more information on these loans visit the Direct Loans website.
- Subsidized Loans
- These are awarded based on calculated financial need. The federal government pays the interest while you are enrolled at least half-time. For many subsidized Direct Loans, the federal government also pays the interest during the 6-month grace period after you graduate, leave school or drop below half-time enrollment. However, for subsidized Direct Loans first disbursed between July 1, 2012 and June 30, 2014, interest will not be subsidized during the grace period. As of July 1, 2013, first-time borrowers of subsidized Direct Loans will have their eligibility for the interest subsidy limited to a period of time not to exceed 150% of the length of the educational program.
- 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 you will pay less in the long run. You will receive quarterly statements and can choose to pay the amount due or have it deferred.
Interest Rate and Origination Fees
For students not pursuing a master’s degree, the interest rate is fixed at 3.86% for new subsidized and unsubsidized loans taken out for the 2013-14 academic year. There is also a 1% origination fee. (Please note: Due to the federal budget sequestration, the origination fee charged on your loan may slightly exceed 1%. The Disclosure Statement sent to you by your loan servicer will state the actual origination fee.) For students pursuing a master’s degree or post-master's certificate, the interest rate is fixed at 5.41% for unsubsidized loans taken out for the 2013-14 academic year.
Repayment of Loans
Regardless of your loan type, subsidized or unsubsidized, you do not need to begin repaying your loans until 6 months after you have graduated or your enrollment has dropped below half-time. This 6-month period of time is called your grace period. After your first disbursement is made, your loan will be assigned to a servicer. Your servicer's contact information will always be available to you through the National Student Loan Data System website, NSLDS - Student Access.
After you've found your servicer's name in NSLDS, next visit the Federal Student Aid Loan Servicers web page to find your servicer's website.
Through your servicer's website you can create an account for online access, find forms, and view repayment information.
Loans are subject to annual limits set by the federal Department of Education.
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.
|Loan Type Maximum Amounts|
|Freshman||$5,500 (maximum $3,500 subsidized)||$9,500 (maximum $3,500 subsidized)|
|Sophomore||$6,500 (maximum $4,500 subsidized)||$10,500 (maximum $4,500 subsidized)|
|Junior/Senior, 2nd Bachelor||$7,500 (maximum $5,500 subsidized)||$12,500 (maximum $5,500 subsidized)|
|Credential, Unclassified Grad (taking pre-requisites)||$5,500||$12,500 (maximum $5,500 subsidized)|
|Graduate Students||N/A||$20,500 (unsubsidized only)|
Federal Lifetime Loan Aggregates
- Total maximum amount of Direct Loans allowed for undergraduates is $57,500, of which no more than $23,000 may be in subsidized funds. (Students who are dependent throughout their undergraduate career are further limited by the annual maximums listed above.)
- 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.
PLUS Loans are for parents and step-parents of dependent students. Borrowers must meet credit history and debt burden requirements. The interest rate is fixed at 6.41% for loans taken out for the 2013-14 academic year. PLUS Loans are always unsubsidized, and interest begins accruing after the loan is fully disbursed. The processing fee is 4%.(Please note: Due to the federal budget sequestration, the origination fee charged on your loan may slightly exceed 4%. The Disclosure Statement sent to you by your loan servicer will state the actual origination fee.) Repayment begins 60 days after the loan is fully disbursed. After your first disbursement is made, your loan will be assigned to a servicer. Your servicer's contact information will always be available to you through the National Student Loan Data System website, NSLDS - Student Access. Delayed Repayment Option: If requested, repayment can be delayed until 6 months after your student drops below half-time or graduates. You must request this by contacting your loan servicer. 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 9 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 completed through MySSU 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 is fixed at 6.41% for loans taken out for the 2013-14 academic year. The processing fee is 4%. (Please note: Due to the federal budget sequestration, the origination fee charged on your loan may slightly exceed 4%. The Disclosure Statement sent to you by your loan servicer will state the actual origination fee.) After borrowing the aggregate annual 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.
For information on alternative loans, please visit the Alternative Loans page of our website.