USA federal government loans

If you are a student from the US you may be eligible for loans offered under the Federal Family Education Loan Program (FFELP). These loans have lower interest rates than most other loans and are government guaranteed.

Eligibility

To be eligible for any of the loans listed, you must be:

• A US citizen or eligible non-citizen
• Enrolled at least half time in a degree program at Monash University
• Making satisfactory academic progress
• Not in default or owing a repayment on a grant or loan

Federal subsidized Stafford loan

This loan is for students in financial need. The US federal government pays the interest:

• While you are enrolled at least half-time in university
• During an authorized deferment period
• For the six-month grace period after you leave university or drop below a half time enrolment

Loan repayments start after one of the following:

• Six months after you graduate
• You leave university
• You drop below half-time enrolment

Federal unsubsidized Stafford loan

Interest accrues on the loan from the time the loan is paid out. You can choose to pay the interest while studying or you can allow it to accumulate until your loan repayments start when one of the following happens:

• Six months after you graduate
• You leave university
• You drop below half-time enrolment

Allowing the interest to accumulate adds to your loan amount and may increase your monthly repayments.

Federal PLUS (Parent Loan for Undergraduate Students)

You are required to pass a credit check. Parents are eligible for this loan if they meet the following conditions:

• Their child is a dependent, undergraduate student
• They meet certain credit guidelines
• The loan is certified by the University

Payments are due within 60 days after the loan is fully paid out, although deferment of payment may be available through selected lenders.

Interest begins to accrue when the loan is received and repayment begins within 60 days after the loan has been fully disbursed.

Federal Graduate PLUS

Eligibility for the PLUS loan program includes graduate or professional students. Graduate students are strongly encouraged to apply for both subsidized and unsubsidized Federal Stafford loans before applying for a Graduate PLUS. 

Repayment begins 60 days after the loan has been received unless an In-School Deferment form is completed, or the lender activates an automatic deferment. PLUS loans do not have a grace period and repayment begins immediately after an In-School Deferment ends.

 A 3% origination fee is charged and a 1% default fee is paid by some lenders on behalf of borrowers.

2008-2009 interest rates

Loans paid to borrowers on or after July 1, 2008 will have the following fixed-loan interest rates:

• Subsidized Stafford loan (undergraduate students) – 6.0%
• Subsidized Stafford loan (graduate students) – 6.8%
• Unsubsidized Stafford loan (undergraduate and graduate students) – 6.8%
• FFEL PLUS (undergraduate and graduate students) – 8.5%

Borrowing limits for federal Stafford loans