Federal Student Loan Programs for Graduate Students
Subsidized Stafford Student Loan Program
Through this program you may, if you are eligible, borrow up to $8,500 per academic year from a bank, a savings and loan association, or other lenders who participate in the program. (The aggregate limit for graduate study is $65,500, which includes all undergraduate subsidized Stafford loans.) The interest rate is fixed at 6.8% and capped at 8.25%.
Repayment begins six months after you graduate or drop below half-time status. In order to qualify for the program, you must:
- demonstrate financial need.
- be enrolled or accepted for enrollment on at least a half-time basis.
- show satisfactory academic progress.
- be a citizen or permanent resident of the United States.
To find out if you are eligible for a Subsidized Stafford Loan, you will first need to apply for Federal Financial Aid. Once your eligibility is determined, you can submit your loan application.
Unsubsidized Stafford Student Loan Program
Under the Unsubsidized Stafford Student Loan Program, you do not have to demonstrate financial need to borrow funds. Interest in this loan program is, however, NOT subsidized by the federal government while you are in attendance. Consequently, you will have to make interest payments or allow the bank to capitalize the interest accrued during the period of enrollment. You may borrow up to $12,000 under the Unsubsidized Stafford Loan Program, for a maximum of $20,500 ($8,500 Subsidized and $12,000 Unsubsidized). The interest rate is fixed at 6.8% and capped at 8.5%.
Remember, you will need to submit a loan application for the Stafford Loan.
Federal Graduate PLUS Loan Program
If you are a graduate student who has borrowed the annual maximum for Federal Stafford Loans or you have exhausted your lifetime Stafford Loan eligibility, you may be interested in the new Federal Graduate PLUS program. This Program allows you to borrow up to the full cost of attendance, minus any other financial aid you receive. You do not need to demonstrate financial need to qualify, but you must show that you are credit worthy.
Key Facts regarding the Federal PLUS Loan Program:
- Available to graduate and professional students only
- Not based on financial need
- You may borrow the cost of attendance minus other aid
- Interest rate is 8.5%
- Fees of up to 4% may be deducted from the loan amount
You must pass a basic credit check for the Federal Plus Loan. You may not receive this loan if your credit history includes any of the following during the five years preceding the date of the credit report:
- 90 or more days delinquent on the repayment of a debt
- A default determination
- Bankruptcy discharge
- Tax lien
- Wage garnishment
- Write-off of a Title IV debt
Please note: You will not be denied a loan because you do not have a credit history. If you do have an adverse credit history, you may still receive a Federal Graduate PLUS loan if you obtain an endorser who does not have an adverse credit history.
Repayment of principal and interest begins 45 to 60 days after the loan is disbursed. You may defer repayment as long as you are enrolled at least half time. Interest may be paid periodically or capitalized.
After graduation, you may consolidate Federal Graduate PLUS Loans with other Federal (Subsidized/Unsubsidized) Stafford Loans.
Requirements. To receive a Federal Graduate PLUS Loan, you must:
- Enroll at least half time in a degree-seeking graduate or professional program.
- Be a U.S. citizen or an eligible non-citizen.
- File a current Free Application for Federal Student Aid (FAFSA), available at www.fafsa.ed.gov.
- Complete and sign the Federal Graduate PLUS Master Promissory Note, available at www.opennet.salliemae.com.
How the PLUS compares with Stafford:
Before considering the Federal Graduate PLUS, you should borrow all of your annual eligibility under the Federal Stafford program. This will give you a significant savings in the interest you owe.
- Interest rate for Federal Stafford Loans = 6.8 percent
- Interest rate for Graduate PLUS Loans = 8.5 percent
This information is correct and accurate for the 2007-2008 academic year.