2015-2016 Bulletin

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2015-2016 Bulletin > Financial Aid and Scholarships > Award sources > Educational loans

Educational loans

Federal Direct Loan (DL)

Portland State University participates in direct lending. Under this program, capital for student loans is provided by the federal government through colleges rather than by banks. When loans are due, borrowers repay them directly to the federal government through a loan servicer. Loans are available to students and parents of dependent students through the Direct Loan program. Undergraduate and post-baccalaureate students can borrow Federal Stafford loans; graduate students can borrow Federal Stafford loans and Graduate PLUS loans; and parents of dependent students can borrow a Parent PLUS loan. Graduate students and parents will apply for the Graduate PLUS or the Parent PLUS loan on our website, www.studentloans.gov. Students will apply for Federal Stafford loans online at www.fafsa.ed.gov.

Federal Direct Subsidized Stafford Loans

Subsidized loan eligibility is based upon the demonstration of financial need and in conjunction with other sources of student assistance. The federal government pays the interest on this loan while the student is in school, and enrolled at least half-time. The student is responsible for interest on the loans once repayment begins. The federal government has set loan limits: $3,500 for the first academic year of undergraduate study (up to 44 credits); $4,500 for the second academic year (45–89 credits); and $5,500 an academic year for the remaining years of undergraduate study. Not all students are eligible for the maximums. Graduate students’ are not eligible for Subsidized Stafford loans.

Student borrowers must be enrolled in good standing at least half-time and have been accepted for admission to a program leading to a degree or certificate. Once repayment begins, borrowers are charged a fixed interest rate.  For current interest rates, visit the Department of Education’s website at https://studentaid.ed.gov/types/loans/interest-rates.

Federal Direct Unsubsidized Stafford Loans

This program provides unsubsidized federal direct loans to students who do not qualify, in whole or in part, for the subsidized Federal Direct Stafford Loan. All Graduate level Stafford loans are Unsubsidized. Unsubsidized loans are not eligible for the federal government payment of interest while the student is in school. The student may make interest-only payments while in school, or the interest will be added to the loan balance. The interest rate for the Federal Direct Unsubsidized Stafford Loan is fixed. For current interest rates, visit the Department of Education’s website at https://studentaid.ed.gov/types/loans/interest-rates.  The student must pay the interest that accrues while in school, during their six-month grace period, and any authorized deferment periods. The federal government has set loan limits: $2,000–$5,500 for the first academic year of undergraduate study (up to 44 credits); $2,000–$6,500 for the second academic year (45–89 credits); and $2,000–$7,500 an academic year for the remaining years of undergraduate study. A student’s dependency and financial need determines the amount of the loan offered. Graduate and doctorial students may borrow up to $20,500 per year depending on their enrollment and financial need. Generally, the cumulative amount a student can borrow from all Federal Direct Stafford Loans is as follows: $31,000 (only $23,000 may be subsidized) as a dependent undergraduate; $57,500 as an independent undergraduate (only $23,000 of this amount may be subsidized); $138,500 as a graduate or professional student (only $65,500 of this may be subsidized).

Additional Federal Direct Unsubsidized Stafford Loan

Dependent undergraduate students whose parents are denied access to the Federal Direct Parent Loan for Undergraduate Students program may be eligible for additional Federal Direct Unsubsidized Stafford Loan money. Students with fewer than 90 credits may borrow a maximum of $4,000 a year in additional funds above the maximum Federal Direct Stafford Loan limits. Students who have earned 90 credits or more may borrow a maximum of an additional $5,000 per year. Not all applicants will qualify for the maximums in additional funding. The Federal Direct Unsubsidized Stafford Loan may be used to replace expected family contribution, but total direct loan (subsidized and unsubsidized) borrowing cannot exceed the cost of education.

Federal Direct Parent PLUS Loans (PLUS)

This program provides loans to parents of dependent undergraduate students. Parents may borrow up to an annual amount that is equal to the cost of education minus any estimated financial assistance the student receives during the periods of enrollment. The borrower may use the amount of the Federal Direct PLUS to replace the expected family contribution and cover unmet need for the loan period. The Federal Direct PLUS loan is limited to parents who do not have an adverse credit history or who have obtained an endorser who does not have an adverse credit history. A direct loan program servicer, contracted by the federal government, performs the required credit check. The interest on the Federal Direct PLUS is fixed.  For current interest rates, visit the Department of Education’s website at https://studentaid.ed.gov/types/loans/interest-rates.

Parents interested in participating in the Federal Direct PLUS program can obtain application information from the Office of Student Financial Aid and Scholarships or apply online at www.studentloans.gov.

Federal PLUS Loans for Graduate and Professional Students (Graduate PLUS)

This program is offered to qualified students with or without financial need, but the student must have financial aid eligibility. Like the Direct Stafford loans for students, the U.S. Department of Education is the lender of the Graduate PLUS loan. Typically, repayment must begin within sixty days after the Graduate PLUS is disbursed. However, students that meet their requirements may obtain an in-school deferment from the U.S. Department of Education. Interest begins to accrue at the time the first disbursement is made at a fixed rate.  For current interest rates, visit the Department of Education’s website at https://studentaid.ed.gov/types/loans/interest-rates.

Federal Perkins Loans

This federally funded loan program is available to undergraduate and graduate students who demonstrate exceptional financial need and who are enrolled at least half-time. This is a long-term, low interest loan for which repayment commences nine months after the student is no longer enrolled on at least a half-time basis.

Alternative Loans

Privately funded loans are not based on need, and no federal formula is applied to determine eligibility. However, the amount borrowed cannot exceed the cost of education minus other financial aid. Interest rates and repayment terms vary, but are generally less favorable than those provided through the federal direct lending program. Private loans are used to supplement the federal programs when the cost of education minus federal aid still leaves unmet need.  For information on alternative loan lenders, visit the PSU website at http://www.pdx.edu/finaid/alternative-loans.