Family Educational Loans
The federal government offers a variety of low interest loans through lending institutions.
In addition to the FAFSA, interested students must participate in loan entrance and exit interviews
and complete a master promissory note.
Subsidized Stafford Loans
Subsidized Stafford loans are based on financial need, whereby the federal government pays the interest
on the loan during periods of enrollment, during the grace period or during authorized periods of deferment
and the borrower is obligated to repay the loan within six months after graduation or when he or she
drops below six credit hours. The current interest rate is a fixed 6.0%
as of July 1, 2008.
Unsubsidized Stafford Loans
Unsubsidized Stafford loans are not awarded on the basis of need, whereby the federal government does
not pay the interest while the student is enrolled, but the principal amount of the loan is deferred
during periods of half-time enrollment status and the student is charged interest from the time the
loan is disbursed until it is paid in full. The borrower is obligated to repay the loan within six months
after graduation or when he or she drops below six credit hours. The current interest rate is a
fixed 6.8% as of July 1, 2006.
Parent Loan for Undergraduate Students (PLUS)
PLUS loans are available to parents of dependent students who are enrolled on a full- or half-time basis,
whereby parents with good credit histories can borrow to pay the educational expenses of each child
who is a dependent undergraduate, with repayment of the principal and interest beginning within 60 days
of the final loan disbursement. The current interest rate is a fixed 8.5%
as of July 1, 2006.
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