Loan Information and Borrowing Options

Federal Direct Stafford Loan

There are both subsidized and unsubsidized Federal Direct Stafford Loans for students. According to federal regulations, the amount of subsidized loan that you may borrow is limited to the difference between your student expense budget and the sum of your family contribution, benefits, and any other financial aid you receive. Unsubsidized loans only take into consideration benefits and other aid, including subsidized loans.

1 Except those whose parents are unable to borrow a PLUS loan.

2 These limits also apply to dependent students whose parents are unable to borrow a PLUS loan.

3 The aggregate borrowing maximums for graduate students include loans for undergraduate study.

The interest rate on subsidized Federal Direct Stafford Loans is fixed for the life of the loan. Payment of principal and interest begins after a six-month grace period. Interest rates will be determined each June for new loans for the upcoming award year, which runs from July 1 to June 30 (5.05% for 2018-2019). The interest rate on unsubsidized loans is also fixed. However, the borrower bears interest charges from the date the loan is disbursed. Interest on unsubsidized loans may either be paid as it accrues or be deferred and capitalized (i.e., added to the loan principal) while you are in school and for a grace period of six months after graduation or termination of studies. Payment of principal (and interest, if it has been deferred) begins after the grace period. The usual repayment period is ten years, although a monthly minimum payment of $50 is required.

The maximum amount of unsubsidized loan that may be borrowed is the difference between the annual limits cited above and the amount of any subsidized loan. In addition, an unsubsidized loan is regarded as replacing a part (or all) of your family contribution and, therefore, cannot exceed that amount (reduced by any parent loan). There is a 1.069% federal origination fee charged by the federal government on Federal Direct Stafford Loans disbursed on or after October 1, 2017. This amount will be deducted from the loan before the remainder of the loan is credited to the student account. You must complete and electronically sign a “master promissory note” and complete Entrance Counseling online with the US Department of Education before a loan may be disbursed as a credit to your student account. Loans in subsequent years do not require a new promissory note. The loan will be disbursed in two installments.

Plus Loans as an Option for Parents

Direct PLUS Loans are part of the federal Direct Loan Program, which makes loans directly from the U.S. Department of Education.

Graduate students and parents of undergraduates must apply for PLUS loans separately if they need additional funds to cover costs. Eligibility is not based on need and borrowers may obtain up to the amount of Cost of Attendance minus any other financial assistance received.

The Direct PLUS Loan may be of interest to students/parents who:

  • Are not eligible for other aid
  • Have unusual costs above the standard student expense budgets
  • Have remaining financial need after other forms of aid are awarded or
  • Wish to borrow all or part of their Expected Family Contribution

There are certain requirements to qualify for the PLUS loan and the federal processor will access your credit report as part of the application process. Because credit reports are valid for a limited time, applications for the 2018 – 2019 should be completed no earlier than June 1st, 2018. Applicants must complete the FAFSA before eligibility for the PLUS loan can be determined. You must reapply each year.

The maximum amount that can be borrowed each year is the Cost of Attendance minus all other financial aid awarded.

Plus Loan Eligibility Sample:
      $ 70,108
      $ 35,000 Total Financial Aid Awards
=   $ 35,108 PLUS Loan Eligibility

Private Loans

If you need additional financing to meet your educational costs, visit for information about private loans. Before applying for a private alternative loan, it is recommended that you research lenders in order to compare interest rates, repayment information, deferment options, etc. Private lenders set the terms for the loans, resulting in different criteria for both loan eligibility and loan rates.

The University of Rochester does not recommend any specific lenders. However, we are able to provide a list of lenders for educational purposes only, and contain names of lenders and products that have been commonly used by University of Rochester students in the past few years. If you are interested in viewing this list, you may visit You are not required to select a lender from the Elm Select list and we will process an application from any lender that you choose that may or may not be listed here.

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