Types of Loans
Stafford Loans are low interest, federally regulated student loans made to domestic graduate students attending accredited programs at least half-time.
The federal government has set loan limits at $8,500 per academic year in subsidized Stafford funds and $12,000 per academic year in unsubsidized Stafford funds. Students who do not qualify for the full-subsidized Stafford amount may receive an unsubsidized Stafford loan for the balance, not to exceed the "cost of education."
Repayment begins six months after you graduate or cease to be a half-time student. (If you use Washington University as a lender, we will absorb the 3% origination fee as well as the 1% insurance fee.) These fees will be deducted from the principle amount by the lender prior to disbursement of the loan funds.
There are two types of Stafford loans offered:
Subsidized Stafford Loan - based on demonstrated financial need as determined by a federal formula, using the information provided by an applicant on the FAFSA. With a subsidized Stafford loan, the federal government pays the interest on the loan while you are in-school and during approved deferment periods.
Unsubsidized Stafford Loan non-need based federal loan. You are responsible for the interest that accrues during in-school, grace, and approved deferment periods. You have the option to pay the interest or defer both the principle and interest during the in-school, grace, and deferment periods. If you defer making interest payments until after you graduate or cease to be half-time, the accrued interest will be capitalized at repayment.
Grad PLUS Loans
Introducing Federal PLUS Loans for Graduate Students - To receive these funds you must be a U.S. citizen/national or Permanent Resident of the United States or be an eligible non-U.S. citizen.
Graduate and Professional students have a new option in funding their higher education. The Graduate PLUS Loan can be used to cover up to 100% of your total cost of education; minus other financial aid you've been awarded. The total amount can pay for tuition, books, food, housing, transportation, etc.
About the Graduate PLUS Loan:
The Deficit Reduction Act of 2005 has modified the PLUS program (formerly a federal loan for parents) to allow graduate students to borrow under this program as well.
- 3% origination fee charged, deducted at the time of disbursement
- This program is for students in graduate level programs only.
- You must file the FAFSA (Free Application for Federal Student Aid) to be eligible.
- You must first accept all Stafford Student Loan you are eligible for before you may borrow under the Graduate PLUS program.
Frequently Asked Questions
How much can I borrow?
The loan limit for each year is the annual cost of education (the .budget.) minus other financial assistance.
When can I apply?
Eligible students are notified on their award letter of their eligibility for Grad PLUS loans via U.S. mail. After receipt of the award letter, you may submit an application. Please refer to the Online Forms page.
How is PLUS repaid?
Generally, the first payment is due within 60 days after the final loan disbursement for the period of enrollment for which you borrowed. However one of the items for discussion is whether the Graduate PLUS will be automatically deferred while the student is attending at least half time. We do know that there is no grace period for the PLUS Loans currently, which would mean that students would begin repayment immediately upon graduate or dropping below half-time status.
What about interest?
As with Unsubsidized Stafford Loans and private loans (alternative loans), interest begins to accumulate at the time the first disbursement is made. You may request an in-school deferment if you are enrolled at least half-time thereby deferring payments while you are in school.
What are the differences between Graduate PLUS Loans and private (alternative) loans?
Graduate PLUS loans can be consolidated with your Stafford Loans upon graduation to give you a single payment. Private loans cannot be consolidated with federal loans, so this may be a benefit to you. And while many alternative loan programs may have lower interest rates than the Graduate PLUS, once we have more information on the benefits offered to students that may result in lower interest charges overall if you meet the repayment conditions.
Washington University's Office of Student Financial Services is currently preparing a comparison sheet (available shortly) that will give you more information on the benefits of each program so you can make an informed decision.
What's the difference between the Stafford and the Graduate PLUS?
- The Graduate PLUS Loan interest rate will be higher than the Stafford. Stafford Loan interest rates beginning July 1, 2006, will change to a fixed rate of 6.8%. The Graduate PLUS rate will be a fixed rate of 8.5%. Check lender rates and benefits.
- As with private (alternative) loans, Graduate PLUS borrowers must pass a basic credit check. There is no credit check required for Stafford Loans.
Alternative Loan Programs
These are private loans designed specifically for graduate business students by banks. These banks offer additional funds to students who require loan assistance in excess of the annual borrowing limits for the federal Stafford loan program and to international students. The interest rate on these loans is generally tied to the 90 day LIBOR rate, the 91-day Treasury Bill or the Prime rate. In addition, a standard commercial credit analysis is required before eligibility can be determined. The bank offering the loan establishes loan characteristics and eligibility requirements. Many lenders allow you to complete their loan applications on-line. Be sure to review the specific terms and conditions of the specific loan program from which you would be borrowing funds. This option is available to both domestic students as well as international students. International students must have a credit-worthy U.S. citizen or permanent resident as a co-signer to be eligible.
Washington University International Loan Program without a US Co-signer:
We also offer international students a student loan whereby they would be eligible without a co-signer. Once you arrive here for classes, there will be an open enrollment period for these loans. The loan amount will be split between the fall and spring semesters. The funds will go directly into your student account at Olin and will be applied to your tuition charges per semester.
For additional information on any of these loans, please contact Kyle Cronan via email at cronan@wustl.edu.
|
