Federal Loans

Federal loans are awarded based on the information provided on the Free Application for Federal Student Aid (FAFSA). Students and parents who choose to participate in federal loan programs are required to have their loan records submitted to the National Student Loan Data System, and those records will be accessible by guarantee agencies, lenders and colleges determined to be authorized users of that data system.

Federal Perkins Loan

A Federal Perkins Loan is a need-based loan. The interest rate is fixed at 5%. This campus-based program is administered by St. Thomas. We restrict this loan program primarily to freshmen due to limited funding and lower Federal Stafford Loan borrowing limits for freshmen. The annual limit is $5,500. The average Perkins Loan at St. Thomas is $2,000.

Federal Direct Loan

A Federal Direct Loan (subsidized and unsubsidized) is a fixed interest loan made to students by the U.S. Department of Education. The interest rate for the Federal Direct Subsidized Loan is currently fixed at 3.4%.

The Federal Direct Unsubsidized Loan has a fixed interest rate of 6.8%. Annual borrowing limits vary based on the student's year in school and FAFSA dependency status.

  • Freshman annual loan limit = $5,500 - no more than $3,500 will be subsidized plus additional $4,000 unsubsidized if student is independent
  • Sophomore annual loan limit = $6,500 - no more than $4,500 will be subsidized plus additional $4,000 unsubsidized if student is independent
  • Junior annual loan limit = $7,500 - no more than $5,500 will be subsidized plus additional $5,000 unsubsidized if student is independent
  • Senior annual loan limit = $7,500 - no more than $5,500 will be subsidized plus additional $5,000 unsubsidized if student is independent

There is a federal loan origination fee of 1.0% deducted from each disbursement.

The amount of your Federal Direct Loan that is subsidized depends upon the results of your FAFSA and other financial aid that you may be offered.

Federal Direct Subsidized Loans are need-based with interest paid by the federal government while the student is enrolled at least half-time (minimum of 6 credits).

Federal Direct Loans are based on the cost of attendance (as determined by St. Thomas) minus any other financial aid the student is receiving. Interest on unsubsidized loans accrues prior to repayment. The student has the option to make interest-only payments while they attend college or to defer payment (capitalization rules may apply).

The Federal Direct Loan Program has counseling requirements. If you are a first-time borrower at the University of St. Thomas, you will be required to complete Direct Loan entrance counseling online. Also, upon graduation or withdrawal from the university, you will be required to complete Direct Loan exit counseling. When it is time to complete either entrance or exit counseling, you will be notified by the Financial Aid Office.

Federal Direct Parent PLUS Loan

A Federal Direct Parent PLUS Loan is an excellent option for families who need to borrow beyond the Federal Direct Loan limits.

This fixed interest loan can be used by parents to borrow on behalf of dependent undergraduates who are enrolled on at least a half-time basis (6 or more credits each semester). This loan cannot be used to pay prior term balances and must be processed during a term the student is currently enrolled on a half-time basis. A credit check is required and performed by the U.S. Department of Education. The interest rate is fixed at 7.9%. Students are required to have a current Free Application for Federal Student Aid (FAFSA) on file for the current year for their parents to apply for a Federal Direct Parent PLUS Loan.

There is a federal loan origination fee of 4% deducted from each disbursement.

Eligibility is limited to the cost of attendance (as determined by St. Thomas) minus any other financial aid the student is receiving.

Repayment will begin 60 days after disbursement of the full amount of the loan. Interest accrues as soon as the first disbursement is made. There is no grace period for this loan; the parent borrower repays both principal and interest while their student is in school. The repayment term will be 10 to 30 years depending upon the repayment plan that is selected. Parents have the option to defer payments for PLUS loans that were originated after July 1, 2008, provided the designated student is enrolled at least half-time each semester (6 or more credits). Parent must contact their federal loan servicer after the loan has been fully disbursed to request a deferment.

Information about the federal loan servicer is sent to the borrower after the first disbursement of the loan or can be found using the National Student Loan Data System (NSLDS). A FAFSA PIN will be required to log in to this website. Contact information for all federal loan servicers can be found in the federal loan servicer directory.

To apply for a Federal Direct Parent PLUS Loan, please complete a Federal Direct Parent PLUS Application/Credit Authorization form and return it to the Financial Aid Office.