Types of Federal Loans
The William D. Ford Direct Loan Program administers Federal Direct Loans to eligible graduate students. Federal appropriation of dollars funds the Federal Perkins Loan. Some federal loans are need-based and others are not need-based. To apply for federal aid, you must complete a FAFSA available at http://www.fafsa.ed.gov and the Union Financial Aid Form each year.
- Direct Unsubsidized Loans (formerly Unsubsidized Stafford Loans) are not awarded on the basis of financial need. Unsubsidized Direct Loans are guaranteed and do not require a credit check. The annual limit for Unsubsidized Direct Loans for graduate students is $20,500 per academic year. The interest rate is fixed at 6.8%. Interest is charged during all periods, even during the time a student is in school and during grace and deferment periods. You can pay the interest while you are enrolled, or defer and capitalize it until repayment begins.
To apply for this loan, you must complete Federal Entrance Counseling visit http://studentloans.gov and sign Master Promissory Note (MPN). A credit check is not required for Federal Direct Unsubsidized Loans.
- Direct Graduate PLUS Loans are not awarded on the basis of financial need. The Grad PLUS Loan is a credit-based supplemental loan. A student must pass a credit review and must not have adverse credit which is defined as: a current 90-day or more delinquency; debt discharged in bankruptcy during the past 5 years; or evidence of a default, foreclosure, tax lien, repossession, wage garnishment, or write-off of a Title IV debt in the past 5 years.
To apply for this loan, you must complete Federal Entrance Counseling visit http://studentloans.gov and, if approved, sign Master Promissory Note (MPN).
- Federal Perkins Loans are available by federally appropriated dollars. The funds are appropriated to Union Theological Seminary and awarded by the Seminary. Perkins Loans are limited and are awarded to students based on an assessment of exceptional financial need as determined by the results from the FAFSA and the information contained on the Union Financial Aid Form. Perkins loans have a 5% fixed interest rate. Interest does not accrue during eligible enrollment or during the 9-month grace period.
If you are awarded a Federal Perkins Loan, you will have to complete a Federal Perkins Loan Application and Master Promissory Note. These forms are available in the Office of Financial Aid.
Federal Loan Limits
The student budget or Cost of Attendance represents the maximum financial aid you can be awarded through any combination of scholarships, fellowships, federal, and private loans certified through Union Theological Seminary for a given academic year.
There are also limits on the maximum amount of federal loans you are eligible to receive each academic year (annual loan limit). For Unsubsidized Direct Loans, graduate students can only borrow up to $20,500 each year. Graduate students also have an aggregate borrowing limit of $138,500 for unsubsidized and any prior subsidized Direct Loans for graduate studies. No more than $65,500 of this aggregate amount may be in the form of Direct Subsidized (Stafford) Loans.
To determine the maximum amount of Federal Direct Grad PLUS loans you may borrow in an academic year, take the cost of attendance and subtract any other financial aid awards, including Federal Direct Unsubsidized Loans. There is no aggregate loan limit for the Federal Direct Grad PLUS loan.
The maximum annual Perkins Loan award for eligible graduate students is $8,000. The cumulative maximum a student may borrow is $60,000, including any undergraduate or previous graduate Perkins loans.
Federal loan funds are disbursed to your student account generally in two installments, one each semester after the end of the add-drop period. The loan funds are first used to pay for tuition, fees, and Seminary housing. If any money remains, you can receive a refund. For more information on refunds, please contact the Business Office.
Federal Loan Interest Rates & Fees
Federal Unsubsidized Direct Loans:
For loans first disbursed prior to July 1, 2013, the interest rate is fixed at 6.8%. For loans first disbursed between July 1, 2013 and June 30, 2014 the interest rate is fixed at 6.41%. The interest rate cap is 9.5%. These loans have an origination fee of 1.072%.
Federal Direct Grad PLUS Loans:
For loans first disbursed prior to July 1, 2013, this rate is fixed at 7.9%. Interest accrues from the date of disbursement. Interest can be paid while enrolled or deferred and capitalized at the time of repayment. For loans first disbursed between July 1, 2013 and June 30, 2014, this rate is fixed at 6.41%. Interest can be paid while enrolled or deferred and capitalized at the time of repayment. The interest rate cap is 10.5%. The Direct Grad PLUS Loan has a 4.288% origination fee.
Federal Perkins Loans
There are no loan fees for Perkins Loans.