Federal Direct Unsubsidized Loan
LECOM participates in the William D. Ford Federal Direct Loan (Direct Loan) Program. Students may be eligible to borrow from the Federal Direct Unsubsidized Loan Program. The terms and conditions of the loan may be found in the Federal Direct Loan Master Promissory Note (MPN). The student is responsible for paying the interest on the unsubsidized loan from the day the loan is disbursed. Interest payment on the unsubsidized loan may be deferred during in-school, grace, and deferment periods; however, the accrued interest may be capitalized, or added to the principal.
Eligible medical and dental students may borrow up to $40,500 per nine-month academic year from the Federal Direct Unsubsidized Loan program. Eligible pharmacy students may borrow up to $33,000 per nine-month academic year from the Federal Direct Unsubsidized Loan program. The loan amounts may be prorated for 10, 11 and 12 month academic years, per federal guidelines.
Eligible graduate students may borrow up to $20,500 per academic year from the Federal Direct Unsubsidized Loan program.
The total aggregate Federal Direct Subsidized and Unsubsidized loan debt amount allowed for eligible medical, dental, and pharmacy students is $224,000. The total aggregate Federal Direct Subsidized and Unsubsidized loan debt amount allowed for graduate students is $138,500. These aggregate loan amounts include any Federal Stafford Loans, Guaranteed Student Loans, Federal Direct Loans and Federal Consolidation Loans received as an undergraduate and/or graduate student.
Federal Direct Graduate PLUS Loan
Eligible students may borrow from the Federal Direct Graduate PLUS Loan. The annual loan limit of the Graduate PLUS Loan is the cost of education minus any other financial aid received. The credit approval of the Graduate PLUS Loan is based on federal standards. An endorser option is available if the borrower does not meet the credit requirements.
Interest rates will be established each year for Direct Unsubsidized and Direct Graduate PLUS loans for which the first disbursement of the loan is on or after July 1 through the following June 30. The rate will be the sum of a uniform “index rate” (based on the 10-year Treasury Note) plus an “add-on” that varies depending on the type of loan (Unsubsidized or PLUS) and the borrower’s grade level (undergraduate or graduate/professional). Borrowers would receive a new rate each year for each new loan, then that rate would be fixed for the life of the loan.
For Direct Loans first disbursed on or after July 1, 2013 and before July 1, 2014, the interest rate for the graduate Direct Unsubsidized Loan is 5.4%; the interest rate for the Direct Graduate PLUS Loan is 6.4%.
For Direct Loans first disbursed on or after July 1, 2014 and before July 1, 2015, the interest rates have not yet been determined, as the rates will be based on the value of the 10-year Treasury note auctioned off in late May 2014. The Consumer Financial Protection Bureau (CFPB) is projecting the rates could rise from 5.4 percent to 6.64 percent on graduate Direct Unsubsidized Loans and from 6.4 percent to 7.64 percent for Direct Graduate PLUS loans.
Federal Direct Loans are subject to origination fees which are deducted by Direct Lending before each disbursement. For Direct Unsubsidized loans first disbursed after December 1, 2013, the fee is 1.072%; for Direct Grad PLUS loans, the fee is 4.288%.
To apply for the Federal Direct Unsubsidized and Graduate PLUS loans, go to http://StudentLoans.gov .
Private Educational Loans
Private educational loans are available through private lenders. The terms and conditions of the different private loans vary depending on the particular loan program. The annual loan limits of private educational loans are cost of education minus any other financial aid received. The approval of a private loan is contingent upon the borrower having a positive credit history.
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