Federal Direct Loan Programs
Federal student and parent loans are issued through the Federal Direct Loan program from the U.S. Department of Education. Direct Stafford Loans are low-interest loans for students. Loans help pay for the cost of higher education after high school. You’ll have a single point of contact and online access to your Direct Loan account information. There are several repayment options to choose from.
Remember, student loans must be repaid like loans for a car or house – and with interest. Only borrow what you need to fill the gap between grants or scholarships and the cost to attend school.
WHAT IS THE FEDERAL DIRECT LOAN Program?
The Federal Direct Loan Program enables students to obtain long-term, low interest loans through the federal government. We will automatically offer you a Federal Direct Stafford Loan if you qualify. You are not required to accept the loan and we will not process the loan unless you accept it. Loans are available to both dependent and independent students, as well as, undergraduate students and graduate students. There is also a loan program for parents of students or graduate students.
WHAT ARE THE ELIGIBILITY REQUIREMENTS?
Your eligibility is based upon a review of your data as submitted on your Free Application for Federal Student Aid (FAFSA) and on other supporting documents, if required. You must be enrolled or accepted for enrollment in a degree, certificate or professional program. Your enrollment status must be at least half-time, (the equivalent of 6 units), and you must be a citizen or eligible non-citizen (permanent resident) of the United States.
WHAT KINDS OF FEDERAL DIRECT LOANS ARE AVAILABLE?
Subsidized Loan
- Student must have financial need - as determined by your FAFSA application
- Federal government pays interest on your behalf until you enter your grace period - the time you are no longer enrolled on at least a half-time basis
- Repayment begins at the end of the 6 months grace period
NOTE: Effective July 1, 2013, eligibility for the interest subsidy has a 150% time limitation for "new borrowers" of Subsidized Stafford Loans.
A "new borrower" is defined as a person who has never borrowed a Stafford loan OR a person with a $0 existing balance as of July 1, 2013.
If this limit applies to you, you may not receive Direct Subsidized Loans for more than 150 percent of the published length of your current program. You can find the published length of your program in the school's catalog.
Unsubsidized Loan
- Not need based
- Maximums based on grade level and dependency status
- Federal government does not pay interest
- Interest is variable
- No obligation to make payments while enrolled at least half-time
- Interest accrues and capitalized during periods of enrollment in school and/or in deferment
Parent PLUS/ Graduate PLUS Loan
- Government-insured, credit-based loan program for parents of dependent undergraduate student OR to graduate students, including doctoral degree students.
- Approval for the PLUS loan is based on the credit-worthiness of the borrower. In the event of a credit-denial, Federal Student Aid's PLUS Loan Information
page details the options available for obtaining a PLUS Loan. - Interest is charged during all periods. Generally, PLUS Loan enters repayment 60 days after the loan has been fully disbursed. Various options are available to postpone payment; refer to Federal Student Aid's Direct PLUS Loan Information
page for additional details.
- The student must be enrolled at least half time and be eligible for federal student aid.
- The maximum loan amount is the student’s cost of attendance minus any other financial aid received.
- Parent PLUS Loan:
- Is available to parents of dependent undergraduate students. In addition to the parent borrower passing a basic credit check, the student must meet the general eligibility requirements for federal student aid. Any amount in excess of university charges through the Parent PLUS Loan will be issued as a refund to the parent.
- Dependent undergraduate students: if your parent is unable to secure a PLUS loan, you may be eligible for additional Unsubsidized loans to help pay for your education.
-
Click here
to learn more about Parent PLUS Loans, including the CSUF application process.
- Graduate PLUS Loan:
- Is available to graduate students (master's and doctoral students). The Graduate PLUS loan is meant to supplement the funding from the Direct Stafford Loan program, and should only be requested if you have exhausted your Direct Stafford Loan eligibility for the year and still have remaining expenses/room in your Cost of Attendance budget.
WHAT ARE THE CURRENT INTEREST RATES?
Interest rates are adjusted by Congress annually, with a new rate taking effect each July 1st. Although the interest rate for new loans may change each July 1, the rate received will be fixed for the life of the loan. Current as well as previous Direct Loan interest rates are available on Federal Student Aid’s Stafford Loan Interest Rate page
.
IS THERE A CHARGE FOR THIS LOAN?
In addition to the interest rate, Direct Loans charges an origination fee on all Stafford loans, which is deducted from your loan funds at the time of disbursement. For the current origination fee, refer to Federal Student Aid’s Stafford Loan Fee page
.
HOW MUCH CAN I BORROW?
There are limits on the amount in subsidized and unsubsidized loans that you may be eligible to receive each academic year (annual loan limits) and the total amounts you may borrow for undergraduate and graduate study (aggregate loan limits). The actual loan amount you are eligible to receive each academic year may be less than the annual loan limit. These limits vary depending on your grade level and your dependency status.
Academic Year Loan Maximums
| Dependent Students | Independent Students* | |||
|---|---|---|---|---|
|
Academic Year |
Subsidized Only |
Subsidized and
Unsubsidized Combined |
Subsidized Only |
Subsidized and
Unsubsidized Combined |
|
Year 1 (0-29 Earned Units) |
$3,500 | $5,500 | $3,500 | $9,500 |
|
Year 2 (30-59 Earned Units) |
$4,500 | $6,500 | $4,500 | $10,500 |
|
Year 3 (60-89 Earned Units) Year 4 (90+ Earned Units) |
$5,500 | $7,500 | $5,500 | $12,500 |
| Teacher Credential | $5,500 | $5,500 | $5,500 | $12,500 |
| Post-Baccalaureate Unclassified | $5,500 | $5,500 | $5,500 | $12,500 |
| Graduate/Professional | N/A | N/A | N/A | $20,500** |
For financial aid purposes, you must have earned a minimum of 30 units to be considered a sophomore; 60 units to be considered a junior; 90 units to be considered a senior. Your loan will be processed at the grade level assigned by the office of Admissions and Records.
* Includes Dependent students whose Parents are PLUS loan denied.
** Graduate/Professional $20,500 annual loan limit is Unsubsidized Loan only
Restriction for graduating seniors with one-semester loan: We are required by federal law to prorate (determine partial loan eligibility) when an undergraduate student plans to graduate at the end of the one term for which they are receiving a Stafford loan. For example, a senior who will be graduating at the end of fall term will be subjected to proration of their annual loan amount because they will not attend the whole academic year.
Aggregate Limits
|
Aggregate Limits |
Subsidized Only |
Subsidized and
Unsubsidized Combined |
|---|---|---|
| Undergraduate - Dependent | $23,000 | $31,000 |
| Undergraduate - Independent | $23,000 | $57,500 |
| Graduate/Professional | $65,500 | $138,500 |
How Do I Apply For Loans?
The application process for loans varies based on the loan program. Once your financial aid application has been fully evaluated and it has been determined that your are eligible for Federal Student Aid, you will be offered Federal Direct Loans based on your financial need and your academic year in college. Additional application information is detailed below by Loan Program.
Parent PLUS Loans - Parents of Dependent Undergraduate Students
How to Apply
The student must:
- Apply for Federal Student Aid
- Submit all required documents to office of Financial Aid
- Review your Financial Aid summary in your Titan Online Student Center. If your total aid is less than the estimated financial aid and budget, you may apply for the difference in a PLUS loan
The parent must log onto Studentloans.gov
and:
- Complete a Parent PLUS Loan application which includes a credit check
- Complete a Master Promissory Note (MPN) online. You will need your FSA ID information, not the student's
- PLUS Counseling: must be completed by parents with an adverse credit decision who will appeal the credit decision or pursue an endorser for credit approval of a Parent PLUS Loan
Finally, submit your completed and signed CSUF PLUS application
to the Financial Aid Office.
Disbursement of PLUS Funds
Federal Direct Parent Loan (PLUS) funds are sent via EFT (electronic funds transfer) to the University. One-half of the academic year loan is disbursed each semester.
The University will verify the student's eligibility and if there is no outstanding balance on the student's university account, Student Business Services (SBS) will mail a check to the parent borrower. If the student owes money to the University there will be a temporary hold placed on the disbursement until the balance on the student's account is paid in full.
What if a Parent is Denied the PLUS Loan?
You may still receive a Direct PLUS Loan via one of these two options:
- Obtaining an endorser who does not have an adverse credit history. If you are a parent borrower, the endorser cannot be the child on whose behalf you are borrowing. Your parent can reapply with a co-signer or document to the U.S. Department of Education’s satisfaction extenuating circumstances relating to your adverse credit history
- Documenting to the U.S. Department of Education's satisfaction extenuating circumstances relating to your adverse credit history
Once you have completed either option 1 or option 2 above, you also must complete credit counseling for PLUS loan borrowers on the Studentloans.gov
website.
If a parent borrower is unable to secure a PLUS loan, the undergraduate dependent student may be eligible for additional Unsubsidized loans to help pay for his or her education. The dependent student would need to provide the CSUF PLUS Application
and a denial letter from the Department of Education. The additional Unsubsidized loan would be offered on the Student Center after processing.
Graduate PLUS Loans - Master's and Doctoral Students
How to Apply
- Apply for Federal Student Aid
- Submit all required documents to office of Financial Aid
- Review your Financial Aid summary in your Titan Online Student Center. If your total aid is less than the estimated financial aid and budget, you may apply for the difference in a PLUS loan
- Go to Studentloans.gov
- Complete an application which includes a credit check
- Complete a Master Promissory Note (MPN) online. You will need your FSA ID information, not the student's
- PLUS Counseling: graduate students with an adverse credit decision who will appeal the credit decision or pursue an endorser for credit approval of a Graduate PLUS Loan
- Submit your completed and signed CSUF Grad PLUS application
to the Financial Aid Office
Disbursement of Direct PLUS Funds
- Funds are sent to the university electronically and will be applied to any outstanding charges before being disbursed to student via check or direct deposit.
- You must be enrolled in at least half-time in order to be eligible to receive your loan funds.
Can I still receive a Direct Grad PLUS Loan if I have an adverse credit history?
A credit check will be performed during the application process. If you have an adverse credit history, you may still receive a Direct Grad PLUS Loan via one of these two options:
- Obtaining an endorser who does not have an adverse credit history
- Documenting to the U.S. Department of Education's satisfaction extenuating circumstances relating to your adverse credit history
Once you have completed either option 1 or option 2 above, you also must complete credit counseling for PLUS loan borrowers on the Studentloans.gov
website.
Private Loans
Private Educational Loans, also known as Alternative Education Loans, help bridge the gap between the actual cost of your education and the amount of your other financial aid funds. Private loans are nonfederal loans
, made by a lender such as a bank or a credit union. These credit-based consumer loans often carry a higher interest rate and fees than the federal loan programs. If you have exhausted all sources of federal funding and decide to borrow a private loan, compare lenders to ensure you are making the best choice for you.
Student loans for college are an investment in your future. Remember that you must repay your loan, so be sure you understand your options and responsibilities. Make sure you understand who is making the loan and the terms and conditions of the loan.
Are you thinking about taking out a federal student loan to help pay for college or career school? Check out this video to learn about your responsibilities as a borrower and what you should consider when taking out loans for college. Visit StudentAid.gov
for more info. (Video source, Youtube
- Federal Student Aid
).
