Federal loans consist of money loaned to students by the U.S. Department of Education (ED).
This is ED’s largest self-help program. As loans have to be repaid, it is important to only borrow what you need. Click here for more information about types of student loans. Kirkwood offers three types of federal loans:
Direct Subsidized Stafford Loan
Because the student has demonstrated sufficient financial need, the government pays the interest while the student is enrolled at least half-time. There is a limit to this interest rate subsidy. Students who do not complete their program within 150 percent of the length of the program may lose their subsidy. For instance, a student in a two-year program must complete the program within or three year or lose the interest subsidy. The fixed interest rate depends on when the loan was disbursed.
Direct Unsubsidized Stafford Loan
The student does not qualify for the interest subsidy because he or she has not demonstrated sufficient financial need. The fixed interest rate depends on when the loan was disbursed.
Parent Loan for Undergraduate Students (PLUS)
This loan is made to parents of dependent students for their educational expenses. Repayment begins 60 days after the final disbursement; however parents can request a deferment while the student is enrolled at least half time. To apply for a PLUS Loan, go here. As a parent, you will have to log in with your FSA ID and then you can complete the PLUS Loan application.
In addition to an interest rate, the loans have origination fees. These are deducted before disbursal and is why your amount that is sent to you is slightly less than the amount on your award letter.
Current interest rate information and loan fee information is available by clicking here.
Stafford Loan amounts are determined by the number of earned credits at the time of awarding. Students who have earned fewer than 30 credits are considered grade level 1, and are awarded a base loan of $3,500, which may be subsidized or unsubsidized depending on need. Students who have earned 30 or more credits are eligible for $4,500. In addition, Dependent students are awarded $2,000 in Unsubsidized Stafford loan, and Independent Students are awarded $6,000. These amounts are subject to previous borrowing limitations and the individual student’s eligibility and financial need. If additional credits are earned after the award has been made, and additional loan funds are requested, the One Stop Office will evaluate at the student’s request any additional eligibility.
In accordance with federal law, please note that first-time borrowers must be enrolled for 30 days from the start of the term, in addition to completing the Master Promissory Note and Entrance Counseling session, before they are eligible to receive the loan funds. Also, the funds will be divided into two disbursements; the first disbursement will be issued after 30 days from the start of the term and will be credited towards tuition first with the remaining funds going to the student. The remaining payment will be issued halfway through the loan period. (For example, if the loan period is for fall only, it will be issued halfway through that term. If the loan period is for fall and spring, the remaining payment will be issued at the beginning of the spring term.) Any tuition debt will be paid first with the remaining funds going to the student. If a student has completed all steps necessary to activate their loan, they can use any remaining balance at the bookstore.