Types of Federal Loans

Federal loans are available to students who are US citizens, permanent residents, or US nationals with a valid Social Security number. Those with a valid I-94 form showing refugee or asylum status or also eligible. These loans must be repaid with interest, usually after graduating or separating from the education program. Awards include long-term, low-interest loans.

Repayment of the principal and interest of these loans is usually deferred until six months after graduation or withdrawal. Some loans are eligible for internship/residency deferment while others only allow for forbearance. When you are offered a loan, you will be given additional information to assist you with your final decision to accept or reject long-range indebtedness. Interest rates vary, depending on the particular loan source.

Please note: Students in the US on student visas are NOT eligible for federal loans.

For more information about the different types of federal loans available to 2-Year PPID students, please refer to the items below.

Federal Direct Loans

The William D. Ford Federal Direct Loan Program provides low-interest unsubsidized (interest accrues while in school) loans financed by the US Department of Education rather than a bank or other financial institution. Loans are available to students who are US citizens or eligible non-citizens. Loan repayment begins six months after graduation or dropping below half-time enrollment.

The government will set the interest rate for each July 1st through June 30th of the following year.  The interest rate for a loan, once established, will apply for the life of the loan – that is, the loan will be a fixed rate loan.  As a result, it is likely that many borrowers will have a set of fixed-rate loans, each with a different interest rate, including the 3.4% and/or 6.8% Direct Subsidized and Direct Unsubsidized loans made prior to July 1, 2013.

Federal Subsidized Direct Loans have been discontinued for graduate and professional students.

Federal Unsubsidized Direct Loans are available to all students regardless of income. Interest accrues from the date of disbursement, but the extra costs of accrual can be avoided by making regular interest payments while in school. The unsubsidized amount may be used to meet the difference between the student budget and financial aid awarded (i.e., to replace the family contribution).

Because graduate/professional students are not eligible to receive Direct Subsidized Loans, the annual loan limit for the new graduate/professional Direct Unsubsidized Loan includes the amount that would have been previously offered for a Direct Subsidized Loan.

Health professions students qualify for greater amounts of Unsubsidized Direct Loan funds than other disciplines.  Including the amount that would previously have been offered in Direct Subsidized Loans, health professions students can receive up to $40,500 in our 9-month first year.  In subsequent years, when students are here year round, that eligibility rises to $47,167.  The combined aggregate limit for both the subsidized and unsubsidized loans is $224,000.

Federal Direct Grad PLUS Loans

Federal Direct PLUS Loans are now available for graduate and professional students as Direct Grad PLUS Loans. The interest rate for the Grad PLUS Loan is fixed annually in the same manner as listed above for other Direct Loans. Interest accrues from the day the funds are released.

To be eligible for a federal Direct Grad PLUS Loan, you must be a US citizen or eligible non-citizen with a valid Social Security number, must not be in default on a federal loan or liable for a grant or federal Perkins Loan overpayment, and must meet a minimal credit eligibility as determined by the Department of Education. A federal Direct Grad PLUS Loan may only be considered after Direct Loan eligibility has been determined through the financial aid application process. Direct Grad PLUS eligibility may cover the full cost of attendance minus the amount of other financial aid received.