Terms and Conditions of Federal Loans

 

Federal Stafford Loan

Federal Stafford loans carry a low, fixed-interest rate set by the federal government. Federal Stafford loans at Empire State University are obtained solely through the William D. Ford direct-loan program.

Eligibility

Interest rates for federal direct loans disbursed between July 1, 2023 and June 30, 2024:

• undergraduate subsidized direct loans fixed at 5.50 percent
• undergraduate unsubsidized direct loans fixed at 5.50 percent
• graduate students are not eligible for subsidized loans per federal regulations
• graduate unsubsidized direct loans fixed at 7.05 percent.

Benefits

• interest may be tax-deductible
• no prepayment penalty
• federal Stafford loans may be consolidated to benefit from one convenient payment and potentially lower monthly payments
• while enrolled at least half time, the borrower may request an in-school deferment.

Types of Federal Stafford Loans

• Subsidized Federal Stafford Loan
  • The federal government pays the interest on this type of Stafford Loan while you are in school and during the six-month grace period.
  • Eligibility is based on financial need as determined by the Free Application for Federal Student Aid (FAFSA).
• Unsubsidized Federal Stafford Loan
  • Interest accrues from the date of disbursement.
  • No payments are required while you are in school. However, you may choose to make payments on this type of Stafford Loan while you are in school, during your six-month grace period following graduation, or as scheduled in special-deferment situations.
  • Eligibility is not based on financial need as determined by the FAFSA, but you must complete the FAFSA to be considered.

Payment

• The first payment is expected six months after you graduate or stop attending at least half time. If you have problems making your payments, please contact your lender immediately for assistance in obtaining information on forbearance. If you re-enter school, you may obtain an in-school deferment on the federal Stafford loans. 

Federal Graduate PLUS Loan

Federal Graduate PLUS loans are a low-interest, federally backed student loan.

Eligibility

• Borrower must be a matriculated student enrolled at least half-time in a graduate or professional degree program.
• Borrower must meet all of the other general eligibility requirements for the federal student aid program.
• Borrower must not have an adverse credit history.
• Borrower must have applied for his or her annual loan maximum eligibility under the Federal Unsubsidized Stafford Loan Program before applying for a graduate/professional PLUS loan.

Interest Rates

• Graduate PLUS loans disbursed between July 1, 2023 and June 30, 2024 have a fixed-interest rate of 8.05 percent.

Benefits

• While enrolled at least half time, the borrower may request an in-school deferment.

Payment

• The first payment is due 60 days after the loan is fully disbursed, unless other in-school deferment arrangements are made.

Federal Parent PLUS Loan

Federal Parent PLUS loans are loans a parent can borrow to help pay for his or her child's education expenses.

Eligibility

• The parent can borrow a PLUS loan to help pay education expenses, if the student is a matriculated, dependent undergraduate, enrolled at least half-time.
• The parent will be required to pass a credit check; if the parent doesn't pass, he or she may use a co-signer or demonstrate extenuating circumstances.
• Parent and student must have no unresolved defaults on federal student loans or owe a repayment of federal funds.
• Parent and student must meet other general eligibility requirements for federal student aid.

Interest Rates

• Parent PLUS loans disbursed between July 1, 2023 and June 30, 2024 have a fixed interest rate of 8.05 percent.

Benefits

• Under certain circumstances, the parent can receive a deferment on his or her loans.
• If a parent temporarily can't meet the repayment schedule, he or she also can receive forbearance on the loan, as long as it isn't in default. During forbearance, payments are postponed or reduced.

Payment

• The parent may choose to defer payments on a PLUS loan until six months after the date the student ceases to be enrolled at least half-time; accruing interest could either be paid by the parent borrower monthly or quarterly, or be capitalized quarterly.
• Interest begins to accumulate at the time the first disbursement is made.