Student Loans

Stafford Loans

Stafford loans are the most common source of student loan funds and are for undergraduate, graduate, vocational, and professional students. There are two types: subsidized and unsubsidized. Your Free Application for Federal Student Aid (FAFSA) will establish your eligibility for both. However, the Stafford loan has its own separate application and Promissory Note.

Subsidized Stafford Loan

Subsidized Stafford loans are need based. The federal government pays the interest on the loan while you're in school, during the grace period before repayment begins, and during periods of approved deferment. Monthly payments begin six months after you graduate, drop below half time enrollment, or withdraw from school. To qualify for a subsidized Stafford loan, you must meet all the requirements for federal student financial aid.

Unsubsidized Stafford Loan

Unsubsidized Stafford loans may be taken out by all qualified students, regardless of their incomes. You must meet the same requirements as those for subsidized Stafford loans, except you don't have to demonstrate financial need and are responsible for the interest. You are responsible for the interest that accrues from the time the loan is disbursed. However, you have the option to defer your interest payments and have the interest capitalized (added to your principal balance).

Stafford loans have a variable interest rate, not to exceed 8.25%. Any origination and insurance fees will be deducted proportionately at the time of disbursement.

Federal PLUS Loans

To qualify for a PLUS loan, you must meet the requirements for federal financial aid. Your parents also must meet some of these general requirements. The PLUS loan has its own separate application and Promissory Note, and parents must pass a credit check. Parents must repay the loan even if their dependent's education isn't completed. The interest rate on PLUS loans is variable, with a cap of 9%. Interest begins to accrue immediately, and repayment starts within 60 days of the loan's last disbursement for the school year.

Federal Perkins Loans

Federal Perkins loans are very low-interest loans, around five percent, made through participating schools for students with high financial need. You'll pay no interest while you're enrolled in school at least half time, and payments begin nine months after you graduate, leave school, or drop below half-time enrollment. Depending on the size of the loan, you'll have up to 10 years to repay.