The US Federal Government is the largest lender of student loans under the William D. Ford Federal Direct Loan Program which encapsulates the following loans for which graduate students may be eligible:
- Unsubsidized Stafford Loans (also called Direct Unsubsidized Loans)
- Graduate PLUS Loan
In order to become eligible for a federal loan, graduate students must complete a FAFSA. Learn how to complete a Free Application for Federal Student Aid (FAFSA) on our Apply for Aid page.
Graduate students will be awarded Unsubsidized Stafford Loans. Stafford Loans are not awarded based on the student’s creditworthiness. Graduate students interested in borrowing a Graduate PLUS Loan must submit a secondary application at studentaid.gov and the Federal Government will check the student’s credit history to determine if the application is approved.
Loan Counseling and Master Promissory Notes
Prior to the Federal Government disbursing the loans to the student’s account balance, student borrowers must complete Loan Entrance Counseling and a Master Promissory Note for their Stafford Loans. Entrance Counseling goes over what it means to borrow a loan and the Student’s rights and responsibilities. The Master Promissory Note is the legally binding agreement between the Federal Government and the student borrower for the loan. Both items can be completed at studentaid.gov.
Graduate students who borrow both the Unsubsidized Stafford Loan and Graduate PLUS Loan will complete one Loan Entrance Counseling for both loans and complete a separate Master Promissory Loan for each. Some graduate students may be required to complete PLUS Counseling prior to receiving the PLUS Loan.
When a student borrower graduates or drops below half-time enrollment, the student must complete Loan Exit Counseling which reminds students of their rights and responsibilities for repaying the loan. Loan Exit Counseling may be completed at studentaid.gov.
The Stafford and Graduate PLUS Loans have fixed interest rates that the Federal Government sets for loans taken each year between July 1 and June 30. Interest rates are based on the 10-Year Treasury Bill. Interest rates are announced in late May and vary depending on the loan program:
- Unsubsidized Stafford Loans: 6.08% (for the 2020-21 academic year)
- Graduate PLUS Loans: 7.08% (for the 2020-21 academic year)
Unsubsidized Stafford Loans begin accruing interest monthly while the student borrower is enrolled. This loan is under the student borrower’s name and it is their responsibility to repay. The Federal Government does not require repayment on the principal or the accrued interest while the student is enrolled at least half-time or during their grace period. Student borrowers are encouraged to make payments on the interest as it accumulates as the Federal Government will capitalize the accrued interest at the end of the borrower’s grace period which means the accrued interest will be added to the loan’s principal balance. If this occurs, the student borrower will accumulate interest on the new total principal balance.
Graduate students may borrow a Graduate PLUS Loan to assist with their educational expenses. The Graduate PLUS Loan requires a secondary application that may be submitted at studentaid.gov.
Similar to the Unsubsidized Stafford Loan, interest accumulates monthly on the PLUS Loan following disbursement. The Federal Government does not require repayment on the principal or the accrued interest while the student is enrolled at least half-time or during their grace period. Student borrowers are encouraged to make payments on the interest as it accumulates as the Federal Government will capitalize the accrued interest at the end of the borrower’s grace period which means the accrued interest will be added to the loan’s principal balance. If this occurs, the student borrower will accumulate interest on the new total principal balance.
For each award year, graduate students will be awarded up to $20,500 in Unsubsidized Stafford Loans. This amount will be split evenly across all semesters the student plans to enroll in during the award year.
For the Graduate PLUS Loan, the student may borrow up to the difference between the University’s published cost of attendance for their program and the amount of aid the student has already been awarded.