The basis of a graduate financing plan is often through federally guaranteed loans. The programs available include the Federal Unsubsidized Stafford Loan, and the Federal Graduate PLUS Loan. Each of these loans requires an application.
- Federal Unsubsidized Stafford Loan - Federal Unsubsidized Stafford Loans are not based on need. This loan is available to all US citizen and eligible noncitizen students, regardless of income. Total may not exceed $20,500 per year. Interest rates are se annually. Current interest rate is 6.21%. This loan has interest that accrues from the date of the disbursement of loan proceeds. Interest payments may be deferred while students attend school. Interest can be paid or may be added to the principal by your lender at your request (this is called capitalization of interest). Repayment of the principal commences six months after completion of studies.
- Federal GRAD PLUS Loans – GRAD PLUS Loans are federally guaranteed and need is not a factor. GRAD PLUS is available to graduate students for up to the total cost of education minus all other aid. The current interest rate is fixed at 7.21%. There is a 4.288% origination/insurance fee. Repayment begins six months after completion of studies up to ten years to repay. A credit analysis is required. Approval is based solely on good credit-income and personal debt are not factors in determining loan approval.
Repayment of Federal Student Loans
Repayment of Federal Direct Subsidized and Unsubsidized Loans and Grad Plus Loans begins six months after graduation or when a student drops below half-time enrollment. The length of repayment and monthly payment amounts depends on the outstanding loan balance, the interest rate, and repayment policies. Interest starts accruing once the loan has disbursed to MICA.
The lender for the Federal Direct Loan Program is the Federal Government. Students will be assigned a loan servicer after the Loan has been disbursed to the school. The Loan servicer contact information can be obtained by logging on www.NSLDS.ed.gov with your FAFSA pin.
For loans repayable in monthly installments, borrowers will be declared in default after 270 days of not making scheduled payments (for loans repayable in less frequent installments, borrowers will be declared in default after 330 days of not making scheduled payments). If you default on a Federal Direct Subsidized or Unsubsidized Loan or Grad Plus and the servicer is unable to collect, it will harm your credit rating and the federal government may take action to recover the loan. You cannot receive further aid if you are in default status.