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Iowa College Student Aid Commission
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Loan Program Details
The terms for different student loan programs, including amount, interest rate and repayment terms can vary greatly from program to program. It is important to be an educated borrower and review the terms of each program prior to accepting any loan funds.
The terms for different student loan programs, including amount, interest rate and repayment terms can vary greatly from program to program. It is important to be an educated borrower and review the terms of each program prior to accepting any loan funds.
Federal Perkins Loans
Perkins Loans are based on financial need and are awarded and borrowed directly from a college or university using federal funds.
Federal Stafford Loans are the most common student loans. These loan funds are provided by the U.S. Department of Education. There are two types of Federal Stafford Loans, subsidized and unsubsidized.
Subsidized Stafford Loans
Parent PLUS loans are provided by the U.S. Department of Education to parents of dependent students to cover educational costs. PLUS loans may be borrowed in addition to or instead of Federal Stafford Loans.
Grad PLUS loans are provided by the U.S. Department of Education to graduate/professional students to pay unmet educational expenses. They may also be used as an alternative to private student loans.
Private educational loans are offered by private lenders and are not eligible for any federal student loan benefits, including loan forgiveness programs. Students should exhaust all other financial aid options before taking out a private loan. [Tips for Researching Private Loan Lenders]
Perkins Loans are based on financial need and are awarded and borrowed directly from a college or university using federal funds.
- The student borrower is required to complete the Free Application For Federal Studend Aid (FAFSA); additional application information is available from the college's financial aid office.
- There is a nine-month grace period before repayment (after a borrower graduates, leaves school or drops to less than half-time enrollment).
- The interest rate is fixed at 5.0%
- The student borrower does not pay accruing interest while in school at least half-time or during the grace period.
- The student borrower will repay the loan to their college or their college's loan servicer.
Federal Stafford Loans are the most common student loans. These loan funds are provided by the U.S. Department of Education. There are two types of Federal Stafford Loans, subsidized and unsubsidized.
Subsidized Stafford Loans
- The student borrower is required to complete the FAFSA; additional application information is available from the college's financial aid office.
- Eligibility based on financial need, which is determined by the FAFSA information.
- The U.S. Department of Education limits the amount of loan funds a student can borrow annually and over a lifetime. [Loan Limit Chart]
- Stafford loans first disbursed on or after July 1, 2006 have a fixed interest rate. Interest rates for loans first disbursed prior to July 1, 2006 are variable and are adjusted annually each July 1.
- Interest rate is fixed at 3.4% for undergraduate students and 6.8% for graduate students for loans first disbursed on or after July 1, 2011 through June 30, 2012
- The student borrower does not pay interest that accrues while he or she is in school at least half-time, during the grace period, or during authorized deferments.
- There is a six-month grace period before repayment (after the borrower graduates, leaves school, or drops below half time enrollment).
- The student borrower is required to complete the FAFSA; additional application information is available from the college's financial aid office.
- Not based on financial need and are available to all eligible students.
- The U.S. Department of Education limits the amount of loan funds a student can borrow annually. [Loan Limit Chart]
- Stafford loans first disbursed on or after July 1, 2006 have a fixed interest rate. Interest rates for loans first disbursed prior to July 1, 2006 are variable and are adjusted annually each July 1.
- Interest rate is fixed at 6.8% for both undergraduate and graduate students.
- The student borrower is responsible for the interest that accrues from the time the funds are received until the loan is paid in full.
- There is a six-month grace period before repayment (after the borrower graduates, leaves school, or drops below half time enrollment).
Parent PLUS loans are provided by the U.S. Department of Education to parents of dependent students to cover educational costs. PLUS loans may be borrowed in addition to or instead of Federal Stafford Loans.
- There is no grace period. Repayment begins 60 days after the loan funds are fully disbursed.
- There may be forbearance options available to postpone repayment while the student for whom the loan was borrowed is enrolled at least half time. Borrowers should contact their lender for details.
- The interest rate is fixed at 7.9%.
- Borrower is subject to a credit check.
- If a parent is denied a PLUS Loan, the dependent undergraduate student is eligible for additional unsubsidized Stafford loan funds.
Grad PLUS loans are provided by the U.S. Department of Education to graduate/professional students to pay unmet educational expenses. They may also be used as an alternative to private student loans.
- The student borrower is required to complete the FAFSA; additional application information is available from the college's financial aid office.
- There is no grace period. Repayment begins 60 days after the loan funds are fully disbursed.
- In-school deferment is available to postpone payments for borrowers who are enrolled at least half-time. Borrowers should contact their lender for details.
- The interest rate is fixed at 7.9%.
- The student borrower is subject to a credit check.
Private educational loans are offered by private lenders and are not eligible for any federal student loan benefits, including loan forgiveness programs. Students should exhaust all other financial aid options before taking out a private loan. [Tips for Researching Private Loan Lenders]
- The grace period and interest rate vary by lender.
- The borrower is usually responsible for paying all interest that accrues from the time the loan is disbursed until the loan is paid in full.
- Deferment and forbearance options are usually limited and vary by lender.
Remember that student loans are real money that must be repaid, with interest, so students should only borrow what they need.