Borrowing Part 2 – U.S. Citizens and Permanent Residents

The following post is part of a three part series written by a member of the admissions and financial aid staff, Colin Sullivan.

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To participate in the Federal Direct Loan Program, US citizens/permanent residents must first complete the FAFSA (Free Application for Federal Student Aid) online at http://www.fafsa.ed.gov to determine their eligibility. From there, they have three options:

1. Federal Direct Stafford Subsidized/Unsubsidized loans:

* $20,500 annual limit = $8500 subsidized, $12,000 unsubsidized

* 6.8% fixed interest rate (“fixed” meaning for the life of the loan)

* 10 year standard repayment term, beginning 6 months after graduation or separation

2. Federal Perkins loans:

* $6000 annual limit for graduate students

* 5% fixed interest rate

* 10 year standard repayment term, beginning 9 months after graduation or separation

3. Federal Graduate PLUS loans:

* complete entrance counseling and Master Promissory Note

* take cost of attendance and subtract other financial aid awards = maximum amount you can borrow

* 7.9% fixed interest rate

* must pass a credit check, and not have any adverse credit history (e.g., 90+ delinquencies, bankruptcy discharges within past 5 years, default, foreclosures, tax liens, etc)

* 10 – 25 year repayment term, beginning 60 days after final disbursement, but may be deferred while enrolled at least half-time

Should any fellowships and federal financial aid fail to cover your total cost of attendance, you may then opt to apply for private education loans. In many cases of private lending (depending on your personal finances and credit history) a credit-worthy cosigner may be required, while your interest rate and repayment terms could vary significantly. Additionally, you cannot consolidate federal and private student loans together.

International students, stay tuned; we will post your borrowing options in the coming days.

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