Loans obtained through the FFEL program are obtained from a private lender such as a bank, credit union or student loan company.
Federal Stafford Loans
Students who demonstrate financial need qualify for a subsidized-interest provision while in school, and for the first six months after leaving school or dropping below half-time status, on the lesser of their demonstrated need or the academic year maximum. Students who demonstrate financial need below the academic year maximum may also borrow through this program; however, they must pay interest on the amount borrowed in excess of demonstrated need beginning when the loan is received.
Full-time undergraduate students may borrow a maximum of $3,500 for the first complete academic year (two semesters), $4,500 for the second complete academic year, and $5,500 per academic year after they have completed their second year of study. The amount borrowed for undergraduate study may not exceed $23,000 subsidized for a dependent student or a combined amount of $46,000 aggregate. Students begin repaying the loan six months after ceasing to be enrolled at least half time. The interest rate for loans originated after July 1, 2006, is fixed at 6.8 percent. Students who previously borrowed under this program retain the interest rate in effect when they first borrowed. Monthly payments are based on aggregate borrowing, though the minimum monthly payment is $50. Repayment is usually completed within 10 years. Students who leave school or drop below half-time status are contacted by their lenders to establish repayment schedules. Under another provision of the unsubsidized Federal Stafford Loan or Federal Direct Stafford/Ford Loan, students who are independent by federal definition may borrow a maximum of $4,000 per academic year for each of the first two completed academic years and a maximum of $5,000 per academic year after completing the second academic year. Students must notify their student finance advisor and their lender of a change in local or permanent address.
Federal PLUS Loans (Parent Loans)
These loans allow parents of students who are dependent by federal definition to borrow a maximum of educational costs less financial aid per academic year (two semesters). The interest rate for loans originated after July 1, 2006, is fixed at 8.5 percent. Repayment begins within 60 days after the loan is fully disbursed.