Federal Loan Eligibility
U.S. Citizens, permanent residents, and eligible non-citizens may apply for federal student loans through the Federal Direct Loan program (DL) . Students need to be enrolled on at least a half time basis (18 units or more) as a regular degree-seeking student. Continuing students must meet the academic progress guidelines of their program of study to be eligible for any type of federal financial aid.
Federal Perkins Loan
Federal Direct Subsidized Loan
Federal Direct Unsubsidized Loan
Federal Direct Grad Plus Loan
Addison H. Gibson Foundation Loan Trust
Alternative (non-federal) Loans
Ombudsman Information
Federal Perkins Loans
The Perkins Loan program is a federal loan program that provides low interest (5%) loans to students who demonstrate exceptional financial need. No interest accrues on the loan while the student is enrolled on at least a half-time basis, during the nine month grace period, and during periods of deferment. Repayment begins nine months after the student graduates or is no longer enrolled on at least a half time basis. Perkins loans are administered through Heinz College and funds are limited; highest consideration is given to applicants who complete the financial aid application process by the suggested deadline. A separate loan application is not required but students must complete a Perkins Loan Promissory Note and Federal Perkins Loan Entrance Counseling (separate from Federal Direct Loan Promissory Notes and Entrance Counseling). Continuing students must meet satisfactory academic progress requirements in order to be eligible for federal Perkins Loans.
Federal Direct Subsidized Loans*
The Federal Direct Subsidized loan is a need-based, federally subsidized loan that enables eligible graduate students to borrow a maximum of $8,500 every two semesters. Interest is subsidized by the federal government while the student is enrolled on at least a half time basis, during the six month grace period, and during periods of deferment. Federal Direct Subsidized loans have a fixed interest rate of 6.8 % for the life of the loan; a loan origination fee is deducted at disbursement. The loan term may be either one or two semesters in length. When borrowing a two-semester loan, students receive half of the total loan amount less appropriate loan fees each semester. Repayment of principal and interest begins six months after the borrower graduates or six months after the borrower drops below half time status (18 units). Continuing students must meet satisfactory academic progress requirements of their program of study to be eligible for any type of federal financial aid.
|
Interest Rate |
Loan Origination Fee |
Repayment Incentives |
|
fixed interest rate of 6.8% |
1% |
|
*Loss of Subsidized Loan Eligibility for Graduate Students
The Budget Control Act (BCA) of 2011 was signed into law on August 2, 2011. This Act makes two changes to the Direct Loan Program, as discussed below.
Effective for loans made for periods of enrollment (loan periods) beginning on or after July 1, 2012,graduate students are no longer eligible to receive Federal Direct Subsidized Loans. The terms and conditions of Direct Subsidized Loans received by any student for loan periods beginning before July 1, 2012, for graduate study, are not affected by this change.
The annual loan limit for graduate and professional students remains unchanged at $20,500 ($47,167 for certain health professions students), but this amount will now be limited to Direct Unsubsidized Loans, as shown in the following chart:
|
Annual Loan Limits for Graduate Students |
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|
|
Loans for loan periods beginning before July 1, 2012 |
|
Loans for loan periods beginning on or after July 1, 2012 |
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|
Subsidized Loan Maximum |
Unsubsidized Loan Maximum |
Subsidized Loan Maximum |
Unsubsidized Loan Maximum |
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|
All Graduate and Professional Students |
$8,500 |
$20,500, less any subsidized amount received |
$0 |
$20,500 |
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**Termination of Direct Loan Borrower Repayment Incentives
The Budget Control Act terminates the authority of the Department of Education to offer any repayment incentives to Direct Loan borrowers to encourage on-time repayment of loans, including any reduction in the interest rate or origination fee, effective for loans first disbursed on or after July 1, 2012. As a result of this change, the up-front interest rebate that has been provided to Direct Loan borrowers at the time of their loan disbursement will no longer be offered on any Direct Loan Program loan with a first disbursement date that is on or after July 1, 2012.
Federal Direct Unsubsidized Loans*
The Federal Direct Unsubsidized Stafford Loan is similar to the Federal Direct Subsidized Stafford loan, except the interest for the unsubsidized loan is not paid by the federal government during in-school, grace, and deferment periods. Borrowers may make quarterly interest payments or have the interest capitalized at the time of repayment. Eligible graduate students may borrow a combined maximum total of $20,500 every two semesters from the Subsidized and Unsubsidized Federal Direct Loan programs. The interest rate, fees, loan term, academic progress requirements and repayment information is the same as stated above for the subsidized loan.
|
Interest Rate |
Loan Origination Fee |
Repayment Incentive |
|
fixed interest rate of 6.8% |
1% |
|
**Termination of Direct Loan Borrower Repayment Incentives
The Budget Control Act terminates the authority of the Department of Education to offer any repayment incentives to Direct Loan borrowers to encourage on-time repayment of loans, including any reduction in the interest rate or origination fee, effective for loans first disbursed on or after July 1, 2012. As a result of this change, the up-front interest rebate that has been provided to Direct Loan borrowers at the time of their loan disbursement will no longer be offered on any Direct Loan Program loan with a first disbursement date that is on or after July 1, 2012.
Federal Direct Grad Plus Loans*
The Federal Direct Grad Plus Loan allows eligible students to borrow up to the published cost of attendance less financial aid from all other sources. Borrowers are required to pass a basic credit test. Students who are denied the loan because of adverse credit history, may obtain an endorser. The interest rate is fixed at 7.9%, which begins accruing upon disbursement.
Borrowers are charged an origination fee deducted from the loan amount at disbursement. The loan term may be one or more semesters in length and the loan disburses equally for each semester included in the loan period. Repayment begins when the loan is fully disbursed, however if the student is enrolled on at least a half-time basis, the loan enters in-school deferment status until the student graduates or drops below half-time status.
|
Interest Rate |
Loan Origination Fee |
Repayment Incentive |
|
fixed interest rate of 7.9% |
4% |
|
**Termination of Direct Loan Borrower Repayment Incentives
The Budget Control Act terminates the authority of the Department of Education to offer any repayment incentives to Direct Loan borrowers to encourage on-time repayment of loans, including any reduction in the interest rate or origination fee, effective for loans first disbursed on or after July 1, 2012. As a result of this change, the up-front interest rebate that has been provided to Direct Loan borrowers at the time of their loan disbursement will no longer be offered on any Direct Loan Program loan with a first disbursement date that is on or after July 1, 2012.
The Addison H. Gibson Foundation Loan Trust (for long-term PA residents)
The Addison H. Gibson Foundation provides low interest education loans to long term (approx. 10 year) PA residents who are U.S. citizens and in their second year (or 3rd semester) of their graduate program.
Alternative (non-federal) Loans
Alternative (non-federal) loans are loans extended to students by private lending institutions on the basis of creditworthiness. A cosigner is required in some cases.
Applications are available through many banks and lenders; the college, in most cases, must certify your eligibility. The lender must obtain a self-certification form signed by the applicant before disbursing an Alternative (non-federal) Loan.
Students may choose any participating lender for their education loans.
Carnegie Mellon’s recommended Alternative (non-federal) Loan lenders: www.cmu.edu/finaid/loans/private.html
Carnegie Mellon’s Lender Relationship Code of Conduct
Ombudsman Information
If you have a problem with your loans that you believe has not been fully resolved by the Heinz College Financial Aid Office, please contact the Office of Student Financial Aid Ombudsman. The OSFA Ombudsman will informally investigate borrowers’ complaints. Although they do not have the authority to reverse decisions, they can offer solutions and work to bring about changes to prevent future problems. The easiest way to contact the Ombudsman is to file an on-line assistance request thru www.ombudsman.ed.gov.
Other contact options are:
Mail:
Office of the Ombudsman
US Department of Education
Fourth Floor (UCP-3/MS 5144 830)
First Street NE
Washington, DC 20202-5144
Phone Toll Free: 1-877-557-2575
TDD: 202-377-3800
E-Mail: fsaombudsmanoffice@ed.gov