Loans
Student loans are ways of financing your graduate and professional education and often have the option to defer payment until after you have completed your program. Federal Direct Loans are the primary source of financing for graduate students seeking a degree.
Federal loans are awarded based on the information provided on the Free Application for Federal Student Aid (FAFSA). Students who choose to participate in federal loan programs are required to have their loan records submitted to the National Student Loan Data System (NSLDS), and those records will be accessible by guarantee agencies, lenders and colleges determined to be authorized users of that data system.
Types of Student Loans
For Degree-Seeking Students
The Federal Direct Unsubsidized Loan for graduate/professional students has the following terms/features:
Interest Rate
- A fixed interest rate of 8.08% on loans disbursed between July 1, 2024 and June 30, 2025.
- A fixed interest rate of 7.05% on loans disbursed between July 1, 2023 and June 30, 2024.
- The interest rate adjusts each July 1st on new loans and is calculated using a base 10-year Treasury Note Index plus an add-on of 3.60% (not to exceed 9.50%).
- Interest begins to accrue when loan funds are disbursed.
Fees
- A loan fee of 1.057% will be withheld from disbursements.
Loan Amounts
- The maximum loan limit per academic year for the Federal Direct Unsubsidized Loan is $20,500. (The academic year is determined by the financial aid office according to federal regulations.)
- Aggregate borrowing limit of $138,500 for students enrolled in graduate degree programs (includes outstanding total undergraduate loans and subsidized loan amounts).
Qualifying
- No credit check and no cosigner required.
- FAFSA is required.
Repayment Terms
- Repayment begins 6 months after you are no longer enrolled at least half-time.
- Standard 10-year repayment plan with option for extending repayment up to 25 years for those whose total subsidized and unsubsidized Federal Loan debt exceeds $30,000.
- Flexible repayment options.
- Eligible for Federal Loan Consolidation.
Deferment/Forbearance
- Deferment and Forbearance options are available to temporarily reduce or delay your monthly payments.
Cancellation
- Loan cancellation in the event of your death or permanent and total disability.
While no credit check is performed, if you are in default on a federal loan or owe a refund or repayment of a federal grant, you are not eligible for the Federal Direct Unsubsidized Loan or any other federal student aid program.
The Federal Direct Graduate PLUS Loan for graduate/professional students has the following terms/features:
Interest Rate
- A fixed interest rate of 9.08% on loans disbursed between July 1, 2024 and June 30, 2025.
- A fixed interest rate of 8.05% on loans disbursed between July 1, 2023 and June 30, 2024.
- The interest rate adjusts each July 1st on new loans and is calculated using a base 10-year Treasury Note Index plus an add-on of 4.60% (not to exceed 10.50%).
- Interest begins to accrue when loan funds are disbursed.
Fees
- A loan fee of 4.228% will be withheld from disbursements.
Loan Amounts
- Each academic year, a student can borrow up to their total cost of attendance budget as determined by the Graduate Financial Aid Office.
Qualifying
- Credit Check is required. Students with no adverse credit would be approved for the Federal Direct Graduate PLUS Loan.
- FAFSA is required.
Repayment Terms
- Ability to defer repayment while you are in school school at least half-time.
- Repayment for recent loans begins 6 months after you are no longer enrolled at least half-time.
- Eligible for Federal Loan Consolidation.
Deferment/Forbearance
- Deferment and forbearance options are available to temporarily reduce or delay your monthly payments.
Cancellation
- Loan cancellation in the event of your death or permanent and total disability.
For Teaching Licensure Students
The Federal Direct Subsidized Loan for licensure students in the School of Education has the following terms/features:
Interest Rate
- A fixed interest rate of 6.53% on loans disbursed between July 1, 2024 and June 30, 2025.
- A fixed interest rate of 5.50% on loans disbursed between July 1, 2023 and June 30, 2024.
- The interest rate adjusts each July 1st on new loans and is calculated using a base 10-year Treasury Note Index plus an add-on of 2.05% (not to exceed 8.25%).
- Interest is paid by the federal government while the student is enrolled at least half-time.
Fees
- A loan fee of 1.057% will be withheld from disbursements.
Loan Amounts
- The maximum amount per academic year for the Federal Direct Subsidized Loan is $5,500. (The academic year is determined by the financial aid office according to federal regulations.)
- The actual amount that you will receive may be less, depending on your financial need.
Qualifying
- No credit check and no cosigner required.
- FAFSA is required.
Repayment Terms
- Repayment begins 6 months after you are no longer enrolled at least half-time.
- Aggregate borrowing limit of $23,000 for students enrolled in licensure programs (includes outstanding undergraduate subsidized loans).
- Standard 10-year repayment plan with option for extending repayment up to 25 years for those whose total subsidized and unsubsidized Federal Loan debt exceeds $30,000.
- Flexible repayment options.
- Eligible for Federal Loan Consolidation.
Deferment/Forbearance
- Deferment and Forbearance options are available to temporarily reduce or delay your monthly payments.
Cancellation
- Loan cancellation in the event of your death or permanent and total disability.
The Federal Direct Unsubsidized Loan for licensure students in the School of Education has the following terms/features:
Interest Rate
- A fixed interest rate of 6.53% on loans disbursed between July 1, 2024 and June 30, 2025.
- A fixed interest rate of 5.50% on loans disbursed between July 1, 2023 and June 30, 2024.
- The interest rate adjusts each July 1st on new loans and is calculated using a base 10-year Treasury Note Index plus an add-on of 2.05% (not to exceed 8.25%).
- Interest begins to accrue when loan funds are disbursed.
Fees
- A loan fee of 1.057% will be withheld from disbursements.
Loan Amounts
- The maximum amount per academic year for the Federal Direct Unsubsidized Loan is determined by your dependency status on the FAFSA.
Qualifying
- No credit check and no cosigner required.
- FAFSA is required.
Repayment Terms
- Repayment begins 6 months after you are no longer enrolled at least half-time.
- Standard 10-year repayment plan with option for extending repayment up to 25 years for those whose total subsidized and unsubsidized Federal Loan debt exceeds $30,000.
- Flexible repayment options.
- Eligible for Federal Loan Consolidation.
Deferment/Forbearance
- Deferment and Forbearance options are available to temporarily reduce or delay your monthly payments.
Cancellation
- Loan cancellation in the event of your death or permanent and total disability.
While no credit check is performed, if you are in default on a federal loan or owe a refund or repayment of a federal grant, you are not eligible for the Federal Direct Subsidized Loan or any other federal student aid program.
For All Students
Private Educational Loans are loans made by banks or other lenders to students. The FAFSA application is not required for these loans. Private Educational Loans are based on a student's overall credit profile. Your history of repayment on prior credit obligations and your current use of credit determine your eligibility and the terms offered to you under these programs.
Private Educational Loans can can assist with your financial aid cost of attendance budget along with your resources, scholarships, grants and federal loans. Private Educational Loans are considered resources for purposes of determining eligibility for other financial aid. Therefore, even though these loans are not federal loans, when included in your financial aid award, your total aid may not exceed your financial aid cost of attendance budget.
When applying for Private Educational Loans, it is always best to apply with a credit-worthy cosigner. (Some lenders will accept borrowers without cosigners.) Applying with a cosigner often results in reduced fees or interest rates for the loan. A qualifying cosigner can be a spouse, parent or other adult relative or friend, who demonstrates a positive credit record and meets income and asset requirements.
Federal Loan Repayment Options
There are a variety of repayment plan options to help you manage your federal student loan debt, including options that base monthly payment on your income or those that give you a fixed monthly payment over a set repayment period.
Federal Loan Simulator
Use the Student Aid Loan Simulator to estimate different repayment plans and monthly payment amounts. Login using your FSA ID to use your specific federal student loan data, or proceed without logging in to estimate/project future loan debt.
Visit studentaid.gov to find your total outstanding federal student loan balance.
Loan Forgiveness Programs
There are various student loan forgiveness programs available for individuals who work in public service, education and health care.
Important Terminology
Loan Deferment
Deferment is a right under your promissory note and it permits you to postpone payments for certain defined periods. For example, if you return to school on an at least half-time basis, you qualify for a deferment for most Federal Education Loans. The most common deferment options (for new borrowers after 7/1/1993) include:
Unlimited Deferment
- Full-time enrollment
- At least half time enrollment
- Graduate fellowship
- Rehabilitation training
Three Years of Total Deferment
- Military deferment
- Unemployed but actively seeking work
- Economic hardship greater than or equal to 20% of monthly income)
If you qualify for a deferment, the Federal Government will pay the accruing interest on the subsidized portion of any Federal Direct Loan you have borrowed. Interest on any unsubsidized portion of the Federal Direct Loan will accrue at a lower interest rate.
Loan Forbearance
If you don't meet the conditions for a deferment, but are having a difficult time making your payments due to temporary hardship, you may request a period of forbearance.
A forbearance is an agreement between you and your loan provider that your next scheduled due date for the loan will be some time in the future, say three or six months or may include an agreed upon lower monthly payment amount. Your loan stays in good standing during a period of forbearance. Interest continues to accrue on loans in forbearance at the applicable repayment period rate.
Loan Default
If you default it means you failed to make payments on your loans according to the terms of your promissory note, the legal document you signed with your lender. Here are some consequences of default:
- National credit bureaus will be notified of your default, which will harm your credit rating
- You would be ineligible for additional federal student aid
- Your wages can be garnished
- State and Federal income tax refunds will be withheld and applied to your defaulted loans
- You will have to pay late fees and collection costs on top of what you already owe
The most recent official cohort rates are:
- National: 2.3%
- Minnesota: 5.6%
- University of St. Thomas: 0.1%
Questions about the St. Thomas default rate can be directed to Mary Sokol, Assistant Director of Student Loans, mary.sokol@stthomas.edu, (651) 962-6556.
Deferment
Loan Deferment
Deferment is a right under your promissory note and it permits you to postpone payments for certain defined periods. For example, if you return to school on an at least half-time basis, you qualify for a deferment for most Federal Education Loans. The most common deferment options (for new borrowers after 7/1/1993) include:
Unlimited Deferment
- Full-time enrollment
- At least half time enrollment
- Graduate fellowship
- Rehabilitation training
Three Years of Total Deferment
- Military deferment
- Unemployed but actively seeking work
- Economic hardship greater than or equal to 20% of monthly income)
If you qualify for a deferment, the Federal Government will pay the accruing interest on the subsidized portion of any Federal Direct Loan you have borrowed. Interest on any unsubsidized portion of the Federal Direct Loan will accrue at a lower interest rate.
Forbearance
Loan Forbearance
If you don't meet the conditions for a deferment, but are having a difficult time making your payments due to temporary hardship, you may request a period of forbearance.
A forbearance is an agreement between you and your loan provider that your next scheduled due date for the loan will be some time in the future, say three or six months or may include an agreed upon lower monthly payment amount. Your loan stays in good standing during a period of forbearance. Interest continues to accrue on loans in forbearance at the applicable repayment period rate.
Default
Loan Default
If you default it means you failed to make payments on your loans according to the terms of your promissory note, the legal document you signed with your lender. Here are some consequences of default:
- National credit bureaus will be notified of your default, which will harm your credit rating
- You would be ineligible for additional federal student aid
- Your wages can be garnished
- State and Federal income tax refunds will be withheld and applied to your defaulted loans
- You will have to pay late fees and collection costs on top of what you already owe
The most recent official cohort rates are:
- National: 2.3%
- Minnesota: 5.6%
- University of St. Thomas: 0.1%
Questions about the St. Thomas default rate can be directed to Mary Sokol, Assistant Director of Student Loans, mary.sokol@stthomas.edu, (651) 962-6556.