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orange barFederal student loans generally offer borrowers lower interest rates and more flexible repayment options.

Remember you need to file your FAFSA before being considered for any of these loan types. 

How Much Money Can I Borrow in Federal Loans?*

If you're an undergraduate student:

  • $5,500 to $12,500 per year in Direct Subsidized Loans and Direct Unsubsidized Loans depending on certain factors, including your year in college.

If you're an eligible non-degree student:

  • Up to $5,500 per year in Direct Subsidized Loans and Direct Unsubsidized Loans for a dependent student depending on certain factors, including your intent of enrollment.
  • Up to $12,500 per year in Direct Subsidized Loans and Direct Unsubsidized Loans for an independent student depending on certain factors, including your intent of enrollment.

If you're a graduate student:

  • Up to $20,500 each year in Direct Unsubsidized Loans.
  • The remainder of your college costs not covered by other financial aid in Direct PLUS Loans. Note: A credit check is required for a PLUS loan.

If you're a parent of a dependent undergraduate or eligible non-degree student:

  • The remainder of your child’s college costs that are not covered by other financial aid. Note: A credit check is required for a parent loan (called a PLUS loan).

*source: US Department of Education

Federal Direct Subsidized Stafford Loan (Undergraduate and some Non-Degree Students)

Available to undergraduate students, and eligible non-degree students, who have financial need based on the FAFSA

  • Interest rates:
    • 3.76% (effective for loans first disbursed on or after July 1, 2016 and prior to July 1, 2017)
    • 4.45% (effective for loans first disbursed on or after July 1, 2017 and prior to July 1, 2018)
  • No interest typically accrues while the student remains enrolled at least half time. The interest subsidy may be limited for students who fail to complete their program within 150% of its published length.
  • Repayment starts: 6 months after student graduates or enrollment falls below half-time
  • Origination fee:
    • for loans first disbursed on or after October 1, 2016 and before October 1, 2017: 1.069% of loan amount
    • for loans first disbursed on or after October 1, 2017 and before October 1, 2018: 1.066% of loan amount
  • Eligibility based on financial need and federal borrowing limits
  • Loan Requirements: First-time borrowers at UVM must complete a Loan Agreement for a Subsidized/Unsubsidized Loan (MPN) and Entrance Counseling

Federal Direct Unsubsidized Stafford Loan (Undergraduate and some Non-Degree Students)

Available to undergraduate and eligible non-degree students

  • Interest rate:
    • 3.76% (effective for loans first disbursed on or after July 1, 2016 and prior to July 1, 2017)
    • 4.45% (effective for loans first disbursed on or after July 1, 2017 and prior to July 1, 2018)
  • Repayment starts: 6 months after student graduates or enrollment falls below half-time
  • Origination fee:
    • for loans first disbursed on or after October 1, 2016 and before October 1, 2017: 1.069% of loan amount
    • for loans first disbursed on or after October 1, 2017 and before October 1, 2018: 1.066% of loan amount
  • Eligibility based on federal borrowing limits
  • Financial need not required
  • Loan Requirements: First-time borrowers at UVM must complete a Loan Agreement for a Subsidized/Unsubsidized Loan (MPN) and Entrance Counseling

Federal Direct Unsubsidized Stafford Loan (Graduate and Medical Students)

Available to graduate and medical students

  • Interest rate:
    • 5.31% (effective for loans first disbursed on or after July 1, 2016 and prior to July 1, 2017)
    • 6.0% (effective for loans first disbursed on or after July 1, 2017 and prior to July 1, 2018)
  • Repayment starts: 6 months after student graduates or enrollment falls below half-time
  • Origination fee:
    • for loans first disbursed on or after October 1, 2016 and before October 1, 2017: 1.069% of loan amount
    • for loans first disbursed on or after October 1, 2017 and before October 1, 2018: 1.066% of loan amount
  • Eligibility based on federal borrowing limits
  • Financial need not required
  • Loan Requirements: First-time borrowers at UVM must complete a Loan Agreement for a Subsidized/Unsubsidized Loan (MPN) and Entrance Counseling

Federal Perkins Loan (Undergraduate Students)

As of September 30, 2017 this Federal loan program has expired.

  • Available to undergraduate students enrolled at least half-time, who were eligible based on financial need
  • Interest rate: 5%
  • Repayment starts: 9 months after student graduates or enrollment falls below half-time
  • No origination fee
  • Due to extremely limited funding, beginning with the 2017-2018 academic year, Perkins loans were awarded to students whose FAFSA was submitted before our priority deadline, demonstrated exceptional financial need, and had an outstanding balance on a previous Perkins loan made by UVM. Under Federal regulations, the Federal Perkins loan program expired September 30, 2017.

Federal Direct Graduate PLUS Loan

Available to graduate and medical students enrolled at least half-time

  • Interest rate:
    • 6.31% (effective for loans first disbursed on or after July 1, 2016 and prior to July 1, 2017)
    • 7.0% (effective for loans first disbursed on or after July 1, 2017 and prior to July 1, 2018)
  • Repayment starts: 6 months after student graduates or enrollment falls below half-time
  • Origination fee:
    • for loans first disbursed on or after October 1, 2016 and before October 1, 2017: 4.276% of loan amount
    • for loans first disbursed on or after October 1, 2017 and before October 1, 2018: 4.264% of loan amount
  • Credit approval required (student may apply with co-signer)
  • May be borrowed for up to the full cost of attendance, less other financial aid
  • Loan Requirements: First-time borrowers at UVM must complete a Loan Agreement for a PLUS Loan (MPN) and Entrance Counseling
  • Each time you borrow the Graduate PLUS Loan, you must also complete a Graduate PLUS Loan Credit Check Authorization Form which will be listed as a requirement through your myUVM portal once you accept the loan

Federal Direct Parent PLUS Loan

Available to parents of dependent undergraduate students and parents of eligible non-degree students

  • Interest rate:
    • 6.31% (effective for loans first disbursed on or after July 1, 2016 and prior to July 1, 2017)
    • 7.0% (effective for loans first disbursed on or after July 1, 2017 and prior to July 1, 2018)
  • Repayment starts: Immediately following full disbursement, though parents may request deferment until 6 months after the student’s enrollment falls below half-time
  • Origination fee:
    • for loans first disbursed on or after October 1, 2016 and before October 1, 2017: 4.276% of loan amount
    • for loans first disbursed on or after October 1, 2017 and before October 1, 2018: 4.264% of loan amount
  • Credit approval required (parent may apply with a co-signer)
  • May be borrowed for up to the full cost of attendance, less other financial aid
  • Each time the loan is borrowed, the parent must Apply for a PLUS Loan
  • Loan Requirements: First-time borrowers at UVM must complete a Loan Agreement for a PLUS Loan (MPN)
  • For more information on the Federal Direct PLUS loan and the application process, visit the U.S. Department of Education website
  • To increase or decrease the parent PLUS loan select the Apply for a PLUS Loan link and specify change as the reason for submitting the PLUS loan request; entering your new total loan amount for the period you are requesting the change for. (This change must be made during the period in which the PLUS loan applies).

 

A Reminder About Interest Rates and Loans

Please note that interest rates are subject to change from year to year based on federal regulations. These loans are disbursed directly to the school to be applied to the student’s account. The actual amount of the loan disbursed to the school is the amount accepted, less the origination fee.

What is the difference between Subsidized and Unsubsidized Loans?

For Direct Subsidized Loans, the borrower is typically not charged interest while enrolled at least half-time. The interest subsidy may be limited for students who fail to complete their program with 150% of its published length. Interest is also not charged during the grace period on loans first disbursed before 7/1/2012.

For Direct Unsubsidized Loans, interest accrues from the time the loan is first disbursed. The interest can be paid while the student is in school and during grace, deferment, or forbearance periods. If not paid, the interest will be capitalized (added to the principal amount of the loan). If possible, it is always a good idea to pay interest on an Unsubsidzed Loan while the student is in school and during any grae, deferment, and/or forbearance periods.