Federal Stafford Direct Loan Program (effective 2012-2013)
- Federal non-need based program
- Fixed 6.8% interest rate
- Unsubsidized Federal Stafford Direct Loans available to all students registered at least half-time
- Repayment begins six months after a student's enrollment drops below half-time status or the student graduates
- FAFSA is required
- First time borrowers at the School of Law must complete an Entrance Counseling Interview and a Master Promissory Note.
- FEES: There are fees associated with borrowing a Federal Direct Stafford Loan. Beginning with the 2012-2013 award year, the U.S. Department of Education will be charging a 1% fee.This fee is deducted from the loan by the Department of Education before the proceeds are credited to your student account.
The maximum amount of the Federal Direct Unsubsidized Loan is $20,500.
- Unsubsidized Stafford loans are not need-based, meaning they're available to all eligible students regardless of how much financial help they need. Also, you're responsible for the interest on an unsubsidized Stafford loan as soon as the School of Law receives the money. You can choose to pay the interest while you're still in college, but you don't have to.
The aggregate amount that a graduate/professional student may borrow is $65,500 in Subsidized Stafford loans. The total Subsidized and Unsubsidized that a student may borrow is $138,500. Both of these figures include ALL federal student loans borrowed, including loans obtained as an undergraduate.
Students may choose between the Federal Direct GRAD PLUS program and private educational loans. When choosing a loan program and a lender, it is important to consider the rate of interest, the flexibility of repayment plans, and the repayment incentives that are offered by the lender.
Federal Direct GRAD PLUS Loans
- Federal non-need based program
- Fixed 7.9% interest rate
- Credit check conducted to establish eligibility even when additional loans are requested. In order to qualify without an endorser, a student must have no adverse credit as defined in federal regulations: 90 days or more delinquent on any debt, or having a credit report that shows default, discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of a Title IV debt (including Stafford Loans), during the five years preceding the date of the credit report.
- Payment may be deferred while in school, FAFSA is required
- Students may apply for a forbearance when loan goes into repayment
- FEES: There are fees associated with borrowing a Federal Direct Grad Plus Loan. The U.S. Department of Education charges a 4% fee. This fee is deducted from the loan by the Department of Education before the proceeds are credited to your student account.
- Non-federal private loan options
- Variable interest rates; most have no cap
- Repayment options vary by lender.
- Total of all grants, Stafford Loans, GRAD Plus loans and Private loans CANNOT exceed a student's cost of attendance
- A list of participating lenders is available at http://financialaid.uconn.edu/index.php/Alternative_-_Student_Loans#Suggested_Alternative_Loan_Lenders_for_Graduate_Students.
Comparison of DL Graduate Plus Loans and Private/Alternative Loans
|PLUS LOAN||PRIVATE LOAN|
|Interest Rate||Fixed 7.9%||Variable, usually changes quarterly, usually no maximum|
|Fees||4%||Varies, according to lender|
|Borrower||Student only, an endorser may be required depending on student's credit||May require credit-worthy cosigner|
|Credit Requirement||Credit score not used. Credit approval is based on federal standards. (See GRAD Plus loan information under "loans" below.)||Credit approval based on credit score and history|
|Deferment/Forbearance||Options are available||May be available, depending on lender. Less flexible than Federal loan deferments|
|Cancellation||Forgiven if student dies or becomes totally disabled.||Not usually discharged|
|Repayment incentives||Varies by lender||Varies by lender|
|Repayment options||Up to 25 years, standard principal and interest, interest only, graduated and extended repayment options||Varies by lender|
Students are eligible for loan deferments while attending school at least half time (6 or more credits). The University participates in the National Loan Clearinghouse which notifies all lenders of a student's enrollment after the add/drop period of every semester. Students may also request a deferment form from their lender to be completed by the Registrar's Office. Additional information on loan deferments, as well as repayment and cancellation options, is available from the U.S. Department of Education at this web link: http://studentaid.ed.gov/students/publications/repaying_loans/index.html.
Income Based Repayment Information
Information on this repayment option may be found at www.ibrinfo.org. There is also a Department of Education Q&A sheet that may found at http://studentaid.ed.gov/students/attachments/siteresources/IBRQ&A_template_123109_FINAL.pdf.