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Student Loans

Students and parents often find themselves relying on loans to help finance a college education. There are several different types of loan options available to families. Some federal loans are available based on financial need, while others are available regardless of family income. The award letter from the college or university will outline your loan eligibility. You may receive several different types of loans, all with different terms and conditions. Know the facts!

Federal Perkins Loans
Perkins Loans are for students with exceptional financial need. The college or university acts as the lender using a limited pool of funds provided by the federal government.
  • You have a 9 month grace period before repayment begins (after you graduate, leave school or drop to less than half-time enrollment status).
  • The interest rate is fixed at 5%.
  • You do not pay interest that accrues while you are in school or during your grace period.
  • You will make your payments to your college or the college's loan servicer.
Please refer to our chart for information regarding certain conditions when your Perkins Loan may be discharged or cancelled.

Federal Stafford Loans
Stafford Loans are delivered through two student loan programs: the Federal Family Education Loan Program (FFELP) and the Federal Direct Loan Program. Your college or university determines which loan program you borrow through. Regardless of the loan program:
  • You have a 6 month grace period (after you graduate, leave school or drop to less than half-time enrollment status).
  • Undergraduate student interest rates:
    • 6% fixed for subsidized loans first disbursed on or after July 1, 2008 through June 30, 2009.
    • 6.8% fixed for unsubsized loans.
  • Graduate student interest rates:
    • 6.8% fixed for both subsidized and unsubsidized stafford loans.
  • The rate for loans first disbursed on or after July 1, 2006 is fixed. Interest rates for loan first disbursed prior to July 1, 2006 are variable and are adjusted annually each July 1. See current interest rates.
  • The federal government limits the amount student may borrow during an academic year. [Loan Limit Chart]
There are two types of federal Stafford Loans, subsidized and unsubsidized.

Subsidized Stafford Loans
  • Are based on financial need, which is determined by the information you submit on the FAFSA.
  • The government pays the interest that accrues while you are enrolled in school at least half-time, during your grace period, or during authorized deferments.
Unsubsidized Stafford Loans
  • Are not based on financial need and are available to all students (as long as you file a FAFSA and your financial assistance does not exceed your total cost of attendance).
  • You are responsible for the interest that accrues from the time you receive the funds until the loan is paid in full.
TIP: There are forgivable loan programs for those who choose certain career opportunities in high-need professions such as teaching or nursing.

Grad PLUS Loan
Grad PLUS are federally insured loans available to graduate/professional student to pay educational expenses. These loans are typically available to pay unmet educational expenses and may be used as an alternative to private loans.
  • 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.
  • The interest rate is fixed at 8.5% (for loans first disbursed through the FFEL Program on or after July 1, 2006; 7.9% if your school participates in the Federal Direct Loan Program). Interest rates for PLUS Loans first disbursed prior to July 1, 2006, are variable and are adjusted annually each July 1. See current interest rates.
  • Borrower is subject to a credit check.
Parent PLUS Loan
Parent PLUS loans are federally insured loans available to parents of dependent students. These loans are typically available to pay unmet educational expenses and may be used as an alternative to private 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 payments. Check with your lender.
  • The interest rate is fixed at 8.5% (for loans first disbursed through the FFEL Program on or after July 1, 2006; 7.9% if your school participates in the Federal Direct Loan Program). Interest rates for PLUS Loans first disbursed prior to July 1, 2006, are variable and are adjusted annually each July 1. See current interest rates.
  • If a parent is denied a PLUS Loan, the dependent undergraduate student is eligible for an additional unsubsidized Stafford Loan.
  • Borrower is subject to a credit check.
Private Loans
Private loans are not federally insured loans, but rather are offered by private lenders. You should exhaust your other financial aid options before accepting a private loan.
  • Your grace period and interest rate vary by lender.
  • You are usually responsible for paying interest that accrues from the time you receive the loan funds until paid in full.
  • Deferment and forbearance options are usually limited and vary by lender.

TIP: Student and parent loans are available to help families pay for college; however, they should not be your primary funding source. Exhaust all of your other options, including payment plans and savings, before you borrow any type of loan.