Loan Programs

Important Changes to the Federal Student Loan Programs for 2012-2013

Interest rates on all Subsidized Stafford Loans will increase to 6.8% for loans first disbursed after July 1, 2012. The increase in interest rate is due to the expiration of an interest rate reduction, enacted by Congress. The interest rates for Unsubsidized Stafford Loans will remain at 6.8%
- The interest rates on Title IV Federal student loans are set by law and cannot be changed by the U. S. Department of Education. President Obama, in his State of the Union Address on January 24, asked Congress to enact legislation to extend the current 3.4 percent interest rate for another year. It is important to remember that this is only a proposal at this time. Absent Congressional action, the interest rate will return to 6.8 percent on July 1, 2012, per the statute.
Rebates on loan fees will expire. Borrowers in the Federal Loan Programs are charged origination fees, varying from 1% – 4% (depending on the type of loan) which are deducted prior to disbursement. In the past, we have benefited from an up-front rebate of .5%, which decreased the amount of money withheld from the disbursement. Effective July 1, 2012, the up-front rebate on the loan fees will be eliminated. Actual disbursements will be slightly lower, reflecting the payment of the entire loan fee.

Grace Period Interest Subsidies will be temporarily eliminated for Direct Subsidized Loans during the six month grace period provided to students when they are no longer enrolled on at least a half-time basis. This change will be effective for new Direct Stafford Loans for which the first disbursement is made on or after July 1, 2012, and before July 1, 2014.
Graduate and Professional Students are no longer eligible for Subsidized Stafford Loans for loan periods beginning after July 1, 2012. Graduate and Professional Students will be able to borrow up to $20,500 from the Unsubsidized Stafford Loan.

Parent PLUS changes

Beginning with the 2012-2013 year, parents will not have to complete the UDM Parent PLUS Application; they can apply on-line at www.studentloans.gov. Parents can use the PLUS loan award on TitanConnect to determine how much they can borrow. If you would like to keep borrowing to a minimum, contact your financial aid advisor to determine how much you actually need to pay tuition and fees.
Credit balances on student accounts that are created by a Parent PLUS loan will be refunded to the parent borrower. However, the refund can be issued to the student if the parent selects the “Refund to Student” option on the Parent PLUS application.

Stafford Subsidized and Unsubsidized Loans
Federal loan, Free Application for Federal Student Aid (FAFSA) required
Undergraduate and graduate students eligible
Grad PLUS
Federal loan, Free Application for Federal Student Aid (FAFSA) required
Graduate students eligible
Credit approval required
Perkins
Federal loan, Free Application for Federal Student Aid (FAFSA) required
Undergrads eligible based on need
Nursing Student Loan
Federal loan, Free Application for Federal Student Aid (FAFSA) required
Undergrads in the nursing program eligible based on need
Faculty Nurse Loan Program
Federal loan, Free Application for Federal Student Aid (FAFSA) required
Graduates in the Master's of Science in Nursing Education, not based on need
Private alternative loans
FAFSA not required, lender application required
Student creditworthiness or co-signer usually required
Terms and interest rates vary by lender

Parent PLUS
Free Application for Federal Student Aid (FAFSA) required
Credit approval is required