Federal Direct Loans
Please also refer to the Steps to Apply for Financial Aid.
Federal Direct Loans
A Federal Direct Loan is an education loan provided by the U.S. Department of Education. There are two types of Federal Direct Loans for graduate students:
- The Federal Direct Stafford Loan
- The Federal Direct Grad Plus Loan
Federal loan borrowers must meet citizenship and all federal aid eligibility requirements and be enrolled in an eligible program on at least a half time basis (18 or more units). There is no credit check performed for Stafford Loan borrowers however Grad Plus Loan borrowers are subject to a credit check during the loan application process. Students who do not meet credit guidelines for the Grad Plus Loan may apply with a credit worthy cosigner.
Stafford Loans have a 1% origination fee, which is deducted from the gross amount of the loan at disbursement. The interest rate for Stafford Loans is fixed at 6.8%. Grad Plus Loans have a 4% origination fee deducted from the loan at disbursement. The interest rate for the Grad Plus Loan is fixed at 7.9%. The interest rates for NEW Federal Direct Loans are subject to change on July 1 each year.
Payment of principle and interest is deferred as long as the student meets the above enrollment requirements. Additionally, the Stafford Loan provides a 6-month grace period for loan repayment after graduation or ceasing half time enrollment. Students have the option of making in-school payments, including interest-only payments. Any unpaid interest that accrues while the borrower is in an in-school deferment period is capitalized when repayment begins (added to the principle balance on the loan). There is no prepayment penalty on Federal Direct Loans. Federal Direct Loans offer liberal repayment options including in-school deferments, unemployment deferments once in repayment, military deferments, economic hardship forbearance, loan forgiveness for certain public service employees, etc.
| Federal Direct Loan Type | Loan Origination Fees | Interest Rate | Grace Period | Interest Subsidy | Maximum Academic Year Eligibility | Requires Credit Check | In School Deferment |
| Stafford | 1% | 6.8% fixed | 6 mo. | No | $20,500 |
No |
Yes |
| Grad Plus | 4% |
7.9% fixed |
none* | No | Average cost of attendance less other financial aid from all sources |
Yes |
Yes |
**repayment of Grad Plus begins within 45 days of the end of the in-school deferment, however you may defer payment for 6 months after you cease to be enrolled on at least a half-time basis (18 or more units).
Loan Disbursement
Federal Direct Loans disburse to the student's university account electronically, generally in 2 equal payments, one at the beginning of each semester covered by the loan, with each disbursement occurring no sooner than 7 days prior to the start of each semester. Students who borrow in excess of allowable student account charges receive a student account "refund" that may be used to cover living expenses and other allowable education-related costs. Refunds are generally available within 10 days after the first day of each semester covered by the loan. Students are encouraged to sign up for e-refund via Student Information Online in order to avoid paper processing delays during the refund process.
