Federal Loans

Federal loans are awarded based on the information provided on the Free Application for Federal Student Aid (FAFSA)

Federal Perkins Loan

A Federal Perkins Loan is a low-interest, 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 $4,000. The average Perkins Loan at St. Thomas is $2,000.

Federal Direct Loan

A Federal Direct Loan (subsidized and unsubsidized) is a low-interest loan made to students by the U.S. Department of Education. The interest rate for the Federal Direct Subsidized Loan is fixed at 6.0% for the 2008-2009 academic year.  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.

Freshman annual loan limit = $3,500
Sophomore annual loan limit = $4,500
Junior annual loan limit = $5,500
Senior annual loan limit = $5,500

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 Stafford 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).

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 low-interest loan can be used by parents to borrow on behalf of dependent undergraduates. A credit check is required and performed by the U.S. Department of Education.  The interest rate is fixed at 7.9%.

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

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..

**PLEASE NOTE**

On May 7th, 2008, President Bush signed into law the Ensuring Continued Access to Student Loans Act of 2008. It appears that parents may now have the option to defer payments on their Federal Direct PLUS loan. In addition, some student borrowers may be eligible for an additional $2,000 of unsubsidized loan eligibility. The amendments made by this bill will be effective for loans first disbursed on or after July 1, 2008.

The law that was passed gives the authority and responsibility to the U.S. Department of Education to determine the exact rules and regulations that schools can use to implement the new policies. Until we receive this guidance from the Department of Education, we are unable to provide any specific information about how this may affect you. Please be assured that we will be proactive in contacting affected students about any new loan programs that will benefit your financial aid package.