Federal Perkins Loan
The Federal Perkins Loan program allows both full- and part-time (6 credits per semester) students in degree programs to borrow money at 5 percent simple interest. This is a federal low-interest loan that students must begin paying back nine months after graduating or leaving college. Students have up to ten years to repay their loans. Eligible students must show financial need and be either citizens or permanent residents of the United States.
Graduate students at CUNY borrow typically between $3,000- $4,000 per year from the Perkins Loan program. However, a total of no more than $60,000 may be borrowed during a student's undergraduate and graduate enrollment.
The FAFSA is used to determine your eligibility for the Federal Perkins Loan.
Federal Direct Subsidized Stafford Loan
The Direct Stafford Loan program allows full-time and part-time students to borrow money directly from the federal government at a fixed rate of 5.6% effective July 1, 2009. The loans must be paid back beginning six months after graduation or dropping below half-time attendance. Interest accrues during the pay back period. Students have a maximum of ten years to repay the borrowed funds and must file the FAFSA to apply.
Federal Direct Unsubsidized Stafford Loan
The provisions of this loan are similar to the Federal Direct Subsidized Stafford Loan except, interest accrues while the student attends school. This interest may be paid or added to the loan. This program allows graduate students to borrow money at an interest rate of 6.8%.
You should be aware that once you begin receiving federal and/or state assistance, you must maintain good academic standing and must make satisfactory academic progress toward the completion of your degree in order to continue receiving aid.
Maximum Annual Loan Limits
|
Loan Programs |
Maximum annual award |
Maximum total award |
Application |
Eligibility |
Federal Direct Subsidized Loan |
$8,500 |
$65,500 combined Undergraduate and Graduate |
FAFSA |
Financial Need |
Additional Unsubsidized Federal Direct Loans |
$12,000 |
$73,000 combined Undergraduate and Graduate* |
FAFSA |
General eligibility |
Federal Perkins Loans |
$8,000*** |
$60,000 |
FAFSA |
Financial Need |
* Total aggregate borrowing for Undergraduate and Graduate study is $138,500
** Financial need = the Cost of Attendance - Financial Aid - EFC
*** Typically CUNY grants $3,000-$4,000.
PLUS Loans for Graduate Students
Students are eligible to borrow under the PLUS Loan Program up to their cost of attendance minus other estimated financial assistance in the Direct Loan Program. The terms and conditions applicable to Parent PLUS Loans also apply to Graduate/Professional PLUS loans. Requirements include a determination that the applicant does not have an adverse credit history. Students must apply for their annual loan maximum eligibility under the Federal Subsidized and Unsubsidized Stafford Loan Program before applying for Graduate/Professional Plus loan.
Application Form
Applicants for these loans are required to complete the Free Application for Federal Student Aid (FAFSA).
Amounts
There are no set annual or aggregate limits. You may borrow up to your full cost of attendance, minus any other financial aid you receive (including Direct Subsidized Loans, Direct Unsubsidized Loans, scholarships, and certain fellowships).
Interest rate and repayment
Direct PLUS Loans have a fixed interest rate of 7.9%. This interest rate will not change throughout the life of your loan.
Graduate PLUS borrowers have nearly all the repayment options that Direct Loan borrowers have. The exception is that the Direct Loan Income Contingent Repayment Plan is not an option for Direct PLUS Loan borrowers. Repayment begins on the date of the last disbursement of the loan and the first payment is due within 60 days after the date the loan is fully disbursed. A Graduate PLUS borrower may receive a deferment while he or she is enrolled on at least a half-time basis at an eligible school. Upon dropping to less than half-time enrollment status, the borrower is not entitled to a grace period on his or her PLUS loans.
Qualifying Credits and Program
You must be enrolled at least half-time in a graduate or professional program (for example, a program that leads to a Master's Degree or to a law or medical degree) at a school that participates in the William D. Ford Federal Direct Loan (Direct Loan) Program, and must meet all of the other general eligibility requirements for the Federal Student Aid programs. In addition, you must not have an adverse credit history (a credit check will be done).
Additional information
The Graduate and Professional Student PLUS loan will not reduce eligibility for the Stafford Loan, but the PLUS loan limit will take the amount borrowed under the Stafford Loan into account. The PLUS loan is limited to cost of attendance minus aid received, as certified by the school.
The graduate and professional student PLUS loan presents an alternative to private education loans. Eligibility for private education loans typically depends on your debt-to-income ratio and FICO score. Eligibility for the PLUS Loan does not depend on these factors. You can get a PLUS loan even if you have a bad credit score, so long as you don't have an adverse credit history (i.e., no more than 90 days late on any debt and no defaults, bankruptcies or other adverse action on any Title IV debt). Most private education loans are variable rate loans with an interest rate that depends on the borrower's (and/or co-borrower's) credit score. The loan fees on a PLUS loan total 4%, while the loan fees on private education loans depend on your credit score and can be as high as 11%.
Frequently asked questions on PLUS loans for Graduates
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What are the eligibility requirements?
You must be enrolled at least half-time in a graduate or professional program (for example, a program that leads to a Master's Degree or to a law or medical degree) at a school that participates in the William D. Ford Federal Direct Loan (Direct Loan) Program, and must meet all of the other general eligibility requirements for the Federal Student Aid programs. In addition, you must not have an adverse credit history (a credit check will be done).
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What is considered to be an adverse credit history?
You are considered to have an adverse credit history if you are 90 or more days delinquent on any debt or if, within 5 years of the date of the credit report, you have been the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of a Federal Student Aid debt (for example, a Direct Loan or Federal Stafford Loan).
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What are my options if I have an adverse credit history?
You may still receive a Direct PLUS Loan if you obtain an endorser who does not have an adverse credit history. An endorser is someone who agrees to repay the loan if you do not repay it.
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Can I borrow a Direct PLUS Loan to pay for courses required for teacher certification or for admission into a graduate or professional program?
No. You must be enrolled in a graduate or professional program.
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Can I decline Direct Subsidized/Unsubsidized Loans and use only Direct PLUS Loans to pay for my education?
Yes. However, Direct Subsidized/Unsubsidized Loans have some advantages over Direct PLUS Loans. Direct Subsidized/Unsubsidized Loans have a lower fixed interest rate (6.8%) than Direct PLUS Loans (7.9%), and no interest is charged on Direct Subsidized Loans while you are in school at least half-time or during grace and deferment periods. Interest is charged on Direct PLUS Loans during all periods. In addition, Direct Subsidized/Unsubsidized Loans have a 6 month grace period after you leave school during which you are not required to make payments. There is no grace period for Direct PLUS Loans.
APPLYING
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Can I cancel a Direct PLUS Loan after I've applied?
Before your loan money is disbursed (paid out), you may cancel all or part of the loan by notifying your school. After your loan money is disbursed, you may cancel all or part of your loan within certain timeframes. For details, refer to the Borrower's Rights and Responsibilities Statement that accompanies your PLUS MPN.
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Can the MPN that I signed for my Direct Subsidized/Unsubsidized Loans be used for Direct PLUS Loans?
No. You must sign a PLUS MPN.
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Can I take out Direct PLUS Loans for myself under a PLUS MPN that I signed for Direct PLUS Loans to pay for my child's education?
No. You must sign a separate PLUS MPN to borrow for yourself.
LOAN LIMITS
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How much can I borrow in Direct PLUS Loans?
There are no set annual or aggregate limits. You may borrow up to your full cost of attendance, minus any other financial aid you receive (including Direct Subsidized Loans, Direct Unsubsidized Loans, scholarships, and certain fellowships).
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Does PLUS Loans for parents amounts count toward the $138,500 Direct Subsidized/Unsubsidized Loan aggregate loan limit for graduate/professional students?
No. Only Direct Subsidized/Unsubsidized Loans and Federal Stafford Loans (subsidized and unsubsidized) made through the Federal Family Education Loan (FFEL) Program count toward the $138,500 aggregate.
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Am I eligible for a Direct PLUS Loan if I have reached the $138,500 Direct Subsidized/Unsubsidized Loan aggregate loan limit for graduate/professional students?
Yes. However, if you have exceeded the $138,500 aggregate, you must either repay the excess loan amount or make satisfactory arrangements to repay it before you can receive any additional Federal Student Aid, including Direct PLUS Loans.
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If I have an adverse credit history but cannot find an endorser, can I receive additional Direct Unsubsidized Loan funds?
No. If you are not eligible for a Direct PLUS Loan, the regular Direct Subsidized/Unsubsidized Loan annual loan limit for graduate and professional students applies. You may not borrow more than $18,500 (maximum $8,500 subsidized) for an academic year. (Certain health professions students may receive increased Direct Unsubsidized Loan amounts.)
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If I am in a health professions program that allows me to receive increased Direct Unsubsidized Loan amounts, can I also receive Direct PLUS Loans?
Yes. You may receive Direct PLUS Loans in addition to the increased Direct Unsubsidized Loan amounts.
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Is there a loan fee?
Yes. The U.S. Department of Education charges a loan fee of 4% of the principal amount of each Direct PLUS Loan. This fee is deducted proportionately from each disbursement of your loan.
REPAYMENT
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When do I have to begin repaying a Direct PLUS Loan?
Your first payment will be due within 60 days after the loan is fully disbursed. This will generally be while you are still in school. There is no grace period.
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Can I postpone payments while I am in school?
Yes. While you are enrolled in school on at least a half-time basis, you are eligible for an in-school deferment that allows you to postpone payments on your Direct PLUS Loan until you graduate or drop below half-time status.
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How do I obtain an in-school deferment?
You must submit an In-School Deferment Request form to the Direct Loan Servicing Center. (You must apply separately for an in-school deferment on your Direct PLUS Loans, even if you have automatically received an in-school deferment on your Direct Subsidized/Unsubsidized Loans.) You may obtain an In-School Deferment Request form from your school's financial aid office, or from the Direct Loan Servicing Center. Your school must certify your enrollment status on the deferment request form.
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Do I need to apply for an in-school deferment each year?
Generally, the school that certifies your deferment request will report your expected graduation date on the form. The in-school deferment on your Direct PLUS Loan will then remain in effect until you graduate or drop below half-time enrollment status, and you will not have to reapply each year.
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How soon do I have to begin making payments after my in-school deferment ends?
Your first payment will be due within 45 days after the deferment end date. The Direct Loan Servicing Center will notify you 60 days before your deferment ends.
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Can I postpone payments on a Direct PLUS Loan during the grace period on my Direct Subsidized/Unsubsidized Loans?
If you are unable to make payments on your Direct PLUS Loan after you leave school and your in-school deferment ends, you may request a forbearance that will allow you to temporarily postpone payments. You will have to explain why you are unable to make payments. To request forbearance, contact the Direct Loan Servicing Center.
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Is interest charged during a deferment or forbearance?
Yes. Interest is charged on a Direct PLUS Loan beginning on the date of the first loan disbursement, and it continues to be charged during periods of deferment or forbearance. You may either pay the interest as it accrues (the Direct Loan Servicing Center will send you a quarterly interest statement), or you may allow the interest to be capitalized (added to your loan principal balance) at the end of the deferment or forbearance. Capitalization increases the total loan amount that you must repay.
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What repayment plans are available?
You will be able to choose from a variety of repayment plans that are designed to meet your individual needs. The Direct Loan Servicing Center will provide you with information on available repayment plans.
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How much will I have to pay each month?
Your monthly payment amount on a Direct PLUS Loan will vary depending on the repayment plan that you choose and how much you borrowed. The table below shows estimated monthly payment amounts under the Standard Repayment Plan (fixed monthly payments over a 10-year repayment period) at various debt levels, based on the Direct PLUS Loan interest rate of 7.9%.
You can obtain estimated monthly payment amounts for different debt levels or for other repayment plans by contacting the Direct Loan Servicing Center.Direct PLUS Loan Amount Owed When You Enter Repayment Standard Repayment Plan Monthly Payment Total Amount Repaid $10,000 $121 $14,496 $20,000 $242 $28,992 $30,000 $362 $43,488 $40,000 $483 $57,984
CONSOLIDATION
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Can I consolidate my Direct PLUS Loans with my other student loans? If so, when can I consolidate?
You may consolidate your Direct PLUS Loans with your other eligible student loans into a single consolidation loan after you leave school. Note that the repayment period for a consolidation loan begins as soon as the loan is made, there is no grace period. Therefore, if you want to consolidate your Direct PLUS Loans with your other student loans that have a grace period, you should wait to do so until shortly before the end of the grace period on the other loans.
DIRECT LOAN SERVICING CENTER
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How do I contact the Direct Loan Servicing Center?
Contact the Direct Loan Servicing Center at 1-800-848-0979 (TTY 1-800-848-0983) or online at www.dl.ed.gov.
Visit the web site or call to get loan account information, request a deferment or forbearance, download a deferment or forbearance request form, change repayment plans, make online payments, set up automatic payments, and much more.
