Federal Direct Student Loan Program

Accepted matriculated graduate and undergraduate students enrolled on at least a half-time basis (6 credits per term) are eligible to apply for loans under this program. The student is eligible to borrow up to the maximum annual loan limit or cost of education less their family contribution and other financial aid, whichever is less. Applicants with financial need are eligible for a subsidized student loan, while those without financial need are eligible to apply for an unsubsidized loan. The Federal government pays the interest on subsidized loans, while borrowers are responsible for interest payments under the unsubsidized loan program while in attendance.

These funds are borrowed directly from the Federal government, not through private lenders. The interest rate of unsubsidized Stafford loans is fixed at 6.8%, while subsidized is fixed at 5.6% as of July 1st, 2009.

Applicants are required to file the Free Application for Federal Student Aid (FAFSA) and to submit the results of that application (called Student Aid Reports) to Dowling College to have their eligibility for a loan determined. Dependent undergraduate students can borrow up to $5,500 for their freshman year, $6,500 for their sophomore year, and up to $7,500 for junior and senior years. Independent are eligible for an additional $4000 in unsubsidized loans.

Borrowers are charged a 1.5% origination fee, of which the government offers an instant, up-front rebate of 1.0%. Loans are disbursed in multiple installments, generally one per term.

Repayment of all Federal loans must begin after the borrower graduates, leaves school, or drops below half-time status. (Student may defer repayment for a six month grace period after repayment status entered.) However, borrowers of unsubsidized student loans are responsible for interest payments while in attendance, or said interest will be added to the principal. The Federal government pays the interest on the subsidized student loans until the borrower graduates, leaves school, or drops below half-time status. There are provisions for teacher loan forgiveness if borrowers meet specific teaching requirements. Borrowers may qualify for loan forgiveness of up to $17,500 if employed for five consecutive years as a "highly qualified secondary school teacher of math, science, or elementary/secondary school special education teacher."

Federal Parent Loans

Parents of dependent undergraduate students who are enrolled on at least a halftime basis may be eligible for a Federal Parent Loan. These loans are based on creditworthiness. Parents may borrow up to the cost of education, less any financial aid that has been or will be awarded.

To apply for a Federal Direct Parent Plus Loan, go to www.dlenote.ed.gov. You must complete the application, credit check and Master Promissory Note.

These funds are borrowed directly from the Federal Government, not through private lenders. The interest rate for a Federal Direct Parent Plus Loan is fixed at 7.9%. Your parents will pay an origination fee of up to 4 percent of the loan, deducted proportionately each time a loan disbursement is made.

The borrower has the option of beginning repayment on the PLUS loan either 60 days after the loan is fully disbursed or wait until six months after the dependent student on whose behalf the parent borrowed ceases to be enrolled on at least a half-time basis.