Educational loans

Federal Direct Loan Programs

Portland State University participates in the federal Direct Loan programs. Under this program, funding for student loans is provided by the federal government through colleges rather than by banks. When loans are due, borrowers repay them directly to the federal government through a loan servicer which is assigned by the U.S. Department of Education to each borrower once the first disbursement of a loan is processed. Any subsequent loans are then serviced by the assigned loan servicer. Loans are available to students and parents of dependent students through the Direct Loan program. Undergraduate and post-baccalaureate students can borrow Federal Stafford loans; graduate students can borrow Federal Stafford loans and Graduate PLUS loans; and parents of dependent students can borrow a Parent PLUS loan. Graduate students and parents may apply for the Graduate PLUS or the Parent PLUS loan online at, www.studentloans.gov or by paper application by contacting the Office of Student Financial Aid and Scholarships.  

Students apply to participate in the Direct Stafford Loan program by first completing the FAFSA but, to complete the loan application, a student borrower must then accept the loan(s) as part of their financial aid award acceptance process, sign a Master Promissory Note or have previously signed a Master Promissory Note within the last 10 years and complete new borrower entrance counseling before they may receive the loan disbursement.

Parents apply to participate in the Direct PLUS Loan program by submitting a loan application online at www.studentloans.gov. The student must have completed a FAFSA for their parent borrower to participate in this loan program.

Federal Direct Subsidized Stafford Loan

Subsidized loan eligibility is based upon the demonstration of financial need and in conjunction with other sources of student assistance. The federal government pays the interest on this loan while the student is in school, enrolled at least half-time and, during the six month grace period directly after a student separates from school. For students who are new borrowers after July 1, 2013, interest is paid by the federal government up to 150 percent of the published length of the academic program. The student is responsible for all interest on the loan once repayment begins or after 150 percent of the published length of the academic program is exceeded.

The federal government has set loan annual limits: $3,500 for the first academic year of undergraduate study (up to 44 credits); $4,500 for the second academic year (45–89 credits); and $5,500 an academic year for the remaining years of undergraduate study. Not all students are eligible for the maximum loan amount. Graduate students are not eligible for Subsidized Stafford loans.

Student borrowers must be enrolled in good standing at least half-time and have been accepted for admission to a program leading to a degree or certificate. Once repayment begins, borrowers are charged a fixed interest rate. For current interest rates, visit the Department of Education’s website at https://studentaid.ed.gov/types/loans/interest-rates.

Students must complete a FAFSA each year to participate in this loan program.

Federal Direct Unsubsidized Stafford Loan

This program provides unsubsidized federal Direct loans to students who do not qualify, in whole or in part, for the subsidized Federal Direct Stafford Loan. All Graduate level Stafford loans are Unsubsidized. Unsubsidized loans are not eligible for the federal government payment of interest while the student is in school. The student may make interest-only payments while in school, or the interest will be added to the loan balance. The interest rate for the Federal Direct Unsubsidized Stafford Loan is fixed. For current interest rates, visit the Department of Education’s website at https://studentaid.ed.gov/types/loans/interest-rates.  The student is responsible for the interest that accrues while in school, during their six-month grace period, and any authorized deferment periods. The federal government has set loan limits: $2,000–$5,500 for the first academic year of undergraduate study (up to 44 credits); $2,000–$6,500 for the second academic year (45–89 credits); and $2,000–$7,500 an academic year for the remaining years of undergraduate study. Graduate and doctoral students may borrow up to $20,500 per year.

Lifetime (aggregate) Stafford Loan borrowing limits by academic program: A student may borrow up to an aggregate limit of:

$31,000 (only $23,000 may be subsidized) as a dependent undergraduate or post baccalaureate student.

$57,500 as an independent undergraduate or post baccalaureate student (only $23,000 of this amount may be subsidized).This aggregate amount includes all previous loans borrowed as a dependent Undergraduate student.

$138,500 as a graduate or professional student (only $65,500 of this may be subsidized). This aggregate amount includes all previous loans borrowed as an Undergraduate student.

Additional Federal Direct Unsubsidized Stafford Loan

Dependent undergraduate students whose parents are denied access to the Federal Direct Parent Loan for Undergraduate Students program may be eligible for additional Federal Direct Unsubsidized Stafford Loan funding. Students with fewer than 90 credits may borrow a maximum of $4,000 a year in additional funds above the maximum Federal Direct Stafford Loan annual limits (but may not exceed aggregate limits). Students who have earned 90 credits or more may borrow a maximum of an additional $5,000 per year (but may not exceed aggregate limits). Not all applicants will qualify for the maximums in additional funding. The Federal Direct Unsubsidized Stafford Loan may be used to replace expected family contribution, but total Direct loan (subsidized and unsubsidized) borrowing cannot exceed the cost of attendance.

Students must complete a FAFSA each year to participate in this loan program.

Federal Direct Parent PLUS Loan (PLUS)

This program provides loans to parents of dependent undergraduate students. Parents may borrow up to an annual amount that is equal to the cost of attendance minus any financial assistance the student receives during the periods of enrollment. The parent borrower may use the amount of the Federal Direct PLUS to replace the expected family contribution and cover unmet need for the loan period. The Federal Direct PLUS loan is limited to parents who do not have an adverse credit history or who have obtained an endorser who does not have an adverse credit history. A Direct loan program servicer, contracted by the federal government, performs the required credit check. The interest on the Federal Direct PLUS is fixed.  For current interest rates, visit the Department of Education’s website at https://studentaid.ed.gov/types/loans/interest-rates.

Parents interested in participating in the Federal Direct PLUS program can obtain application information from the Office of Student Financial Aid and Scholarships or apply online at www.studentloans.gov.

Students must complete a FAFSA each year for their parent to participate in this loan program.

Federal PLUS Loan for Graduate and Professional Students (Graduate PLUS)

This program is offered to credit qualified students with or without financial need, but the student must have financial aid eligibility. Like the Direct Stafford loans for students, the U.S. Department of Education is the lender of the Graduate PLUS loan. Repayment begins within sixty days after the Graduate PLUS loan is fully disbursed. However, students that meet deferment requirements may obtain an in-school deferment from the U.S. Department of Education. Interest begins to accrue at the time the first disbursement is made at a fixed rate.  For current interest rates, visit the Department of Education’s website at https://studentaid.ed.gov/types/loans/interest-rates.

Students must complete a FAFSA each year and first be considered for the federal Direct Stafford program to participate in this loan program.

Federal Perkins Loans

This federally funded loan program is available to undergraduate students who demonstrate exceptional financial need and who are enrolled at least half-time. The interest rate is fixed at five percent and repayment begins nine months after the student is no longer enrolled at least a half-time or graduates.

Students must complete a FAFSA each year to participate in this loan program.

Alternative (to the federal student loan programs) Loans

Privately funded education loans are not based on need, and no federal formula is applied to determine eligibility. However, the amount borrowed cannot exceed the cost of attendance minus other financial aid. Interest rates and repayment terms vary by lender, but are generally less favorable than those provided through the federal Direct lending program. Privately funded education loans are used to supplement the federal programs when the cost of attendance minus the maximum federal aid still leaves unmet need.  For information on alternative loans, visit the PSU website at www.pdx.edu/finaid/apply.