TYPES OF FEDERAL LOANS
Federal Direct loans are offered to undergraduate students at a low fixed interest rate. Students must be enrolled at least half time (6 units) to be eligible. Repayment begins six months after the student leaves school or drops below half-time status. Students must complete Entrance Counseling and a Master Promissory Note before they can receive their first disbursement (see section below).
The Federal Direct Loan Program offers the following types of loans:
Subsidized: for students who demonstrate financial need, as determined by the FAFSA. No interest is charged while a student is in school at least half-time, during the grace period, and during deferment periods. The Subsidized loan MUST be accepted in full before accepting the Unsubsidized loan.
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. Student needs to complete the FAFSA.
CURRENT INTEREST RATES
Subsidized/Unsubsidized Loans - 5.05% (Fixed - valid July 1, 2018 to June 30, 2019)
*Upcoming Interest Rate for Subsidized/Unsubsidized Loans - 4.53% (Fixed - valid July 1, 2019 to June 30, 2020)
Parent PLUS Loan - 7.60% (Fixed - valid July 1, 2018 to June 30, 2019)
*Upcoming Interest Rate for Parent PLUS Loan - 7.08% (Fixed - valid July 1, 2019 to June 30, 2020)
A loan fee (or origination fee) is an expense of borrowing a Federal Direct Loan (Sub/Unsub/PLUS). It is the percentage of the amount of each loan the borrower receives and is subtracted proportionately from each disbursement. Federal Direct Loan originated/disbursed on 10/01/2018 to 09/30/2019, the following loan fees will be applied:
Subsidized/Unsubsidized Loans – 1.062% (10/01/2018 to 09/30/2019)
Parent PLUS Loan – 4.248% (10/01/2018 to 09/30/2019)
Example: $5,500 loan for the 2018/2019 school year:
FA18 Disbursement $2,750 - 1.062% = $2,721
SP19 Disbursement $2,750 - 1.062% = $2,721
Total Received = $5,442
Dependent Students* Independent Students
Freshman (0-29 units) $5,500 ($3,500 sub) $9,500 ($3,500 sub)
Sophomore (30-59 units) $6,500 ($4,500 sub) $10,500 ($4,500 sub)
Junior (60-89 units) $7,500 ($5,500 sub) $12,500 ($5,500 sub)
Senior (90+ units) $7,500 ($5,500 sub) $12,500 ($5,500 sub)
Total $31,000 ($23,000 sub) $57,500 ($23,000 sub)
Amount in parenthesis represents the maximum amount of subsidized loan a student is eligible to receive. Amounts can vary, depending on financial need as determined by the FAFSA. The remaining amount is offered in the form of a Direct Unsubsidized Loan.
If you have changed grade levels after receiving your award letter, as determined by cumulative units earned, you may contact the Financial Aid Office to request an increase to your loans based on the above information. Please note, not every instance of a grade level change will result in additional aid, all increase approvals are pending review and approval by a Financial Aid Administrator.
*Dependent students whose parents cannot get approved for the Direct Parent PLUS will receive an additional $4,000/yr Unsubsidized loan Freshman/Sophomore or $5,000 for Junior/Seniors . These additional amounts cannot exceed the independent aggregate limit.*