All of the following programs allow for early prepayment of principal without penalty.
Federal Direct Subsidized Student Loan
This federally subsidized direct student loan is funded directly from the Federal Treasury. The 2018-2019 interest rate is 5.045%. Currently loan fees of 1.062% are subtracted from the borrowed amount prior to disbursement. The minimum monthly payment is $50.00 and the maximum repayment period is 10 years. Repayment of the principal and interest begins six months after the student leaves school, graduates, or drops below half-time attendance. Repayment may be deferred if the student goes on to full-time graduate school. Maximum eligibility for freshmen is $3,500.00, sophomores, $4,500.00, and juniors and seniors, $5,500.00.
All students are also eligible for an additional $2,000.00 in unsubsidized loan funding annually. Students who wish to borrow their maximum Direct Student loan should contact our office. Students who apply for alternative financing and have not maximized their federal loan eligibility will be awarded the increased loan limits before certifying the students remaining federal eligibility with a higher cost private loan.
Federal Direct Unsubsidized Student Loan
Students who are not eligible for the Subsidized Direct Student Loan program are still eligible to borrow a loan without the federal interest subsidy. Although repayment of principal is deferred during enrollment, interest does accrue and the student borrower has the option of making interest payments while in school, or having the accrued interest capitalized (added to the principal borrowed prior to the start of repayment). Freshmen may borrow up to $5,500.00 for the year, sophomores up to $6,500.00, and juniors and seniors up to $7,500.00 per year. The 2018 – 2019 interest rate is 5.045%. Currently loan fees of 1.062% are subtracted from the borrowed amount prior to disbursement. Repayment of principal and interest begins six months after the student leaves school, graduates, or drops below half-time attendance. Repayment requires a minimum payment of at least $50.00 and extends for up to 10 years. Students who wish to apply for the Unsubsidized Direct Student Loan must complete the Free Application for Federal Student Aid (FAFSA).
Federal Direct PLUS Loan
The Federal Direct Parent Loan for Undergraduate Students (PLUS) enables parents to borrow for higher education expenses through the Federal Treasury. The 2018 – 2019 Direct PLUS loans interest rate is 7.595%. Currently loan fees of 4.248% are subtracted from the borrowed amount prior to disbursement. Click here to calculate your loan amount needed including fees. Repayment of principal and interest begins after disbursement and continues for a maximum of 10 years. Parents can prepay all or part of the amount borrowed at any time without penalty. Eligibility for the Direct PLUS loan is determined by the total cost of attendance less any other aid received. The Federal PLUS loan is the most flexible of these parent-financing options. The Department requires that a credit check be perform, for evidence of an adverse credit history. Please refer to the Federal Direct Parent Plus Loan Borrower Instructions page for more information.
National Student Loan Data System (NSLDS)
Federal loan information is submitted to the National Student Loan Data System (NSLDS), the U.S. Department of Education’s central database for student aid. NSLDS receives data from schools, guaranty agencies, the federal Direct Loan program, and other Department of Education programs. NSLDS borrower Access provides a centralized, integrated view of Title IV loans and grants so that recipients of Title IV Aid can access and inquire about their Title IV loans and/or grant data.