Educational Loans
Federal Direct Loan Programs
Portland State University participates in the Federal Direct Loan program. Under this program, funding for student loans comes from the U.S. Treasury and are disbursed by schools. When loan repayments are due, borrowers repay them directly to the federal government through a loan servicer assigned by the U.S. Department of Education to each borrower. Any subsequent loans are then serviced by the assigned loan servicer. Undergraduate and post-baccalaureate students can borrow Federal Direct Subsidized and Unsubsidized Loans; graduate students can borrow Federal Direct Unsubsidized Loans and Federal Direct Graduate PLUS Loans; and parents of dependent students can borrow Federal Direct Parent PLUS Loans.
Federal Direct Loan applicants must submit a FAFSA to have their loan eligibility determined. After their loans have been awarded, they must accept them as part of their financial aid award acceptance process, and complete Master Promissory Notes and satisfy entrance counseling requirements at www.studentaid.gov.
Federal Direct Subsidized Stafford Loan
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 enrolled at least half-time and during the six-month grace period directly after a student separates from school. For students who are new borrowers after July 1, 2013, interest is paid by the federal government up to 150 percent of the published length of the academic program. The student is responsible for all interest on the loan once repayment begins or after 150 percent of the published length of the academic program is exceeded.
The federal government has set annual borrowing limits of $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 maximum loan amount.
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 eligible certificate. Once repayment begins, borrowers are charged the interest rates that were in effect for each year they borrowed. For current interest rates, visit the Department of Education’s website at www.studentaid.gov/understand-aid/types/loans/interest-rates.
Students must complete a FAFSA each year to participate in this loan program.
Federal Direct Unsubsidized Stafford Loan
This program provides unsubsidized Federal Direct Loans to undergraduate and graduate students who do not have to demonstrate federally defined need. 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 rates for the Federal Direct Unsubsidized Loan are specific to each year that the student borrows. For current interest rates, visit the U. S. Department of Education’s website at hwww.studentaid.gov/understand-aid/types/loans/interest-rates. Students are responsible for the interest that accrues while in school, during their six-month grace period, and during any authorized deferment periods. The federal government has set annual borrowing limits of $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. Undergraduate borrowing limits vary based on the borrower's dependency status as indicated by the FAFSA. Graduate students may borrow up to $20,500 per year.
Lifetime (aggregate) Federal Direct Loan Borrowing Limits by Academic Program
A student may borrow up to an aggregate limit of $31,000 (only $23,000 may be subsidized) as a dependent undergraduate or post baccalaureate student; $57,500 as an independent undergraduate or post baccalaureate student (only $23,000 of this amount may be subsidized); and $138,500 as a graduate or professional student (only $65,500 of this may be subsidized). The aggregate amount for graduate students includes all previous loans borrowed as an undergraduate or post baccalaureate student.
Additional Federal Direct Unsubsidized Stafford Loan
Dependent undergraduate students whose parents' Federal Direct PLUS Loan applications are denied may be eligible for additional Federal Direct Unsubsidized Loan. Students who have earned fewer than 90 credits may borrow up to $4,000 a year in additional funds above the maximum Federal Direct Stafford Loan annual limits (but may not exceed aggregate limits). Students who have earned 90 credits or more may borrow up to an additional $5,000 per year (but may not exceed aggregate limits). Not all applicants will qualify for the maximums in additional funding. The Federal Direct Unsubsidized Loan may be used to replace the Expected Family Contribution, but total Federal Direct Loan (subsidized and unsubsidized) borrowing, plus other financial assistance received, cannot exceed the Cost of Attendance.
Students must complete a FAFSA each year to participate in this loan program.
Federal Direct Parent PLUS Loan (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 Attendance minus any financial assistance the student receives during the periods of enrollment. The parent 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 adverse credit history or who have obtained an endorser who does not have adverse credit history. A servicer, contracted by the federal government, performs the required credit check. The interest on the Federal Direct PLUS Loan is fixed. For current interest rates, visit the U.S. Department of Education’s website at www.studentaid.gov/understand-aid/types/loans/interest-rates.
Parents interested in participating in the Federal Direct PLUS Loan program can apply online at www.studentaid.gov.
Students must complete a FAFSA each year for their parent to participate in this loan program.
Federal PLUS Loan for Graduate and Professional Students (Graduate PLUS)
This program is offered to credit-qualified graduate students with or without financial need. Repayment begins within sixty days after the Federal Direct Graduate PLUS Loan is fully disbursed. Students who meet deferment requirements may obtain an in-school deferment from the U.S. Department of Education. Interest is fixed for each loan, and begins to accrue at the time the first disbursement is made. For current interest rates, visit the Department of Education’s website at www.studentaid.gov/understand-aid/types/loans/interest-rates.
Students must complete a FAFSA each year to be eligible for Federal Direct Graduate PLUS Loans.
Private Alternative Loans
Privately funded education loans are not based on need, and no federal formula is applied to determine eligibility. The amount borrowed cannot exceed the Cost of Attendance minus other financial aid, including other loans. Interest rates and repayment terms vary by lender, and should be carefully considered when making borrowing decisions. Privately funded education loans may be used to supplement the federal programs when the cost of attendance minus the maximum federal aid still leaves unmet need. For information on alternative loans, visit the PSU website at www.pdx.edu/student-finance/financial-aid/apply.