Federal loans are funds borrowed from the federal government.  The funds must be repaid, with interest, after you are no longer a student.  Most federal loans are awarded to students when they apply for financial aid. Your financial need, program of study, and grade level determine the types and amounts of loans you receive. The only federal loan that is not awarded when you apply for aid is the Federal Direct PLUS Loan; a separate application is needed to apply for this loan (see our website for more information about the PLUS and the Graduate Student PLUS programs).  All federal loans are need-based, except the Direct Unsubsidized Stafford Loan and the PLUS Loans.  Below is a chart that gives an overview of the federal loan programs.  

Please note: Because U-M participates in the Direct Loan program, we do NOT process Subsidized or Unsubsidized Stafford Loans or PLUS Loans through private lenders. 

Program	Description	Eligibility	Terms
Federal Perkins Loan Information from the Department of Education You must complete a Perkins Loan Master Promissory Note to receive your loan funds.  Click here for information.	Federally funded, supplemented by U-M funds 5% fixed interest	Need-based:  Students considered based on Expected Family Contribution (EFC); allowable EFC determined by federal funding levels; not available if student lready has a bachelor's degree and is pursuing subsequent bachelor's degrees Must be enrolled at least half-time in a degree program Must meet the financial aid priority application deadline (April 30)	Award amounts vary based on available funding. Please see the Perkins Loan Rights and Responsibilities. Repayment is deferred and there is no interest while the student is enrolled at least half-time. Six- or nine-month grace period before repayment begins (see promissory note) Minimum monthly repayment $40 Special deferment and cancellation provisions for volunteer service (Peace Corps, Armed Services, etc.); see Repaying Your Student Loans and the Dept. of Education website (information specifically for teachers)
Nursing Student Loan and Graduate Nursing Student Loan You must complete a Nursing Student Loan Master Promissory Note to receive your loan funds.  Click here for information. Students must complete their Rights and Responsibilities documents on Wolverine Access each year before funds can be disbursed.	Federally funded 5% fixed interest	Need-based Must be enrolled at least half-time in a Nursing program Must meet the financial aid priority application deadline (April 30)	Repayment is deferred and there is no interest while the student is enrolled at least half-time in a Nursing program (other programs do not qualify). Nine-month grace period before repayment Minimum monthly repayment $40 Special deferment provisions for volunteer service, etc.  (see Promissory Note and Rights and Responsibilities for information) Must complete a Rights and Responsibilities Statement each year before disbursement
Health Professions Loan, Pharmacy and Dental You must complete a Health Professions Loan Master Promissory Note to receive your loan funds.  Click here for information. Students must complete their Rights and Responsibilities documents on Wolverine Access each year before funds can be disbursed.	Federally funded 5% fixed interest	Need-based (parental financial information required) Must be enrolled at least half-time in a Pharmacy or Dental program Must meet the financial aid priority application deadline (April 30)	Repayment is deferred and there is no interest  while the student enrolled at least half-time. Twelve-month grace period before repayment Minimum monthly repayment $40 Special deferment provisions for volunteer service, etc.  (see Promissory Note and Rights and Responsibilities for information) Must complete a Rights and Responsibilities Statement each year before disbursement
Federal Direct Stafford Loan, Subsidized Information from the Department of Education Students accepting Direct Loan funds for the first time must complete an online Direct Loan Master Promissory Note before receiving their loan funds.  Click here for information. First-time borrowers: To learn more about Direct Loans, see the loan entrance counseling website.	Federally funded. 6% fixed interest rate after July 1, 2008, for undergraduate loan; interest rate on graduate student loan is 6.8% See Borrowing Maximums Chart below Existing Direct Loans can be consolidated Because U-M participates in the Direct Loan program, we do NOT process Stafford Loans through private lenders.	Need-based Must be enrolled at least half-time in a degree or certificate program	Repayment is deferred and there is no interest  while the student is enrolled at least half-time. Limited deferment provisions; see Repaying Your Student Loans and the Dept. of Education website (information specifically for teachers) 2% origination fee, with a 1.5% rebate if first 12 montly payments are made on time.  Because of this fee, the actual Direct Loan amount applied to your University account will be lower than that  listed on your award notice.
NOTE:  The Subsidized Federal Direct Stafford Loan is a need-based loan, while the Unsubsidized Federal Direct  Stafford Loan is not.  Students borrowing the Subsidized Loan do not pay interest on the loan while they are enrolled at least half-time; conversely, students borrowing the Unsubsidized Loan must pay interest while they are enrolled in school.  The Unsubsidized Loan does allow you to defer the interest payments until you graduate; however, this will result in a higer loan payment over the life of the loan, so you will pay more in the long run.
Federal Direct Stafford Loan, Unsubsidized Information from the Department of Education Students accepting Direct Loan funds for the first time must complete an online Direct Loan Master Promissory Note before receiving their loan funds.  Click here for information. First-time borrowers: To learn more about Direct Loans, see the loan entrance counseling website.	Federally funded 6.8% fixed interest rate See Borrowing Maximums Chart below Existing Direct Loans can be consolidated Because U-M participates in the Direct Loan program, we do NOT process Stafford Loans through private lenders.	Non-need-based Must be enrolled at least half-time in a degree or certificate program	Interest begins accruing immediately; may be paid periodically or capitalized (see promissory note) Repayment of principal is deferred while the student is enrolled at least half-time. Limited deferment provisions; see Repaying Your Student Loans and the Dept. of Education website (information specifically for teachers) 2% origination fee, with a 1.5% rebate if first 12 monthly payments are made on time.  Because of this fee, the actual Direct Loan amount applied to your University account will be lower than that  listed on your award notice.
Federal Direct PLUS Loan (for Parents of Undergraduates) Information from the Department of Education Borrowers accepting PLUS Loan funds for the first time must complete an online Master Promissory Note before receiving their loan funds.  Click here for information.	Federally funded 7.9% fixed interest rate Existing PLUS Loans can be consolidated. Because U-M participates in the Direct Loan program, we do NOT process PLUS Loans through private lenders.	Non-need-based; may borrow the cost of attendance minus other aid Student must be enrolled at least half-time in degree or certificate program  Parent borrows on behalf of undergraduate student (recent legislation allows graduate students to also borrow PLUS) Borrower cannot be 90 days or more delinquent on the repayment of any debt or the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of a Title IV debt during the last five years. Must be a U.S. citizen or eligible non-citizen of the U.S.	This loan will be listed on your award notice only if a separate application is submitted and approved.  Repayment of principal and interest begins 60 days after loan disbursed. 4.0% origination fee, with a 1.5% rebate if first 12 monthly payments are made on time. Because of this fee, the actual PLUS Loan amount applied to your University account will be lower than that  listed on your award notice.
Federal Direct Grad PLUS Loan Information from the Department of Education Borrowers accepting Grad PLUS Loan funds for the first time must complete an online Master Promissory Note before receiving their loan funds.  Click here for information.	Federally funded 7.9% fixed interest rate Interest begins accruing immediately; may be paid periodically or capitalized  PLUS Loans can be consolidated. Because U-M participates in the Direct Loan program, we do NOT process PLUS Loans through private lenders.	Must be a U.S. citizen or eligible non-citizen of the U.S. Only available to students enrolled in graduate level programs Non-need-based; may borrow the cost of attendance minus other aid Student must be enrolled at least half-time in degree or certificate program  Borrower cannot be 90 days or more delinquent on the repayment of any debt or the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of a Title IV debt during the last five years.	Borrower must complete the Free Application for Federal Student Aid (FAFSA) to apply. Repayment of principal and interest begins 60 days after loan disbursed; however, payments can be deferred while borrower is enrolled at least half-time (borrower must request an in-school deferment). 4.0% origination fee, with a 1.5% rebate if first 12 monthly payments are made on time

 

	Dependent Undergraduate Students	Additional Unsubsidized Loan for Independent, Undergraduate Students*	Graduate Students
First Year	$3,500	$4,000 (for a total of $7,500)	$20,500 each academic year (only $8,500 of this amount can be Subsidized Loan)
Second Year	$4,500	$4,000 (for a total of $8,500)	$20,500 each academic year (only $8,500 of this amount can be Subsidized Loan)
Third Year	$5,500	$5,000 (for a total of $10,500)	$20,500 each academic year (only $8,500 of this amount can be Subsidized Loan)
Total Loan Debt Limit	$23,000	$46,000 (only $23,000 can be Subsidized Loan)	$138,500 (only $65,500 can be Subsidized Loan); limit includes Direct Loans received as an undergraduate

 *Or dependent students whose parents are unable to obtain a PLUS Loan.