Federal Direct Student Loans as Financial Aid
Beginning with the 2009–2010 academic year, Cummings School students will borrow federal student loans through the William D. Ford Federal Direct Loan Program rather than through private lenders. In the Direct Loan Program the US Department of Education acts as the lender. Federal Direct Loans include:
Direct Subsidized Loan
The Direct Subsidized Loan is a need-based, federally subsidized loan. Direct Subsidized Loans are interest-free during the in-school period for students who are enrolled at least half time and for six months after dropping below half time status or leaving school. The interest is also subsidized during eligible deferment periods. Depending on eligibility, students may qualify for an annual loan amount of up to $8,500. The interest rate for graduate/professional students is 6.8%. A loan fee of 0.5% is charged.
Direct Unsubsidized Stafford Loan
The Direct Unsubsidized Loan is not subsidized; therefore the borrower is responsible for interest for the entire life of the loan. Students may choose to pay interest as it accrues, or they may defer payments. Deferred interest will be added it to the loan balance at repayment. The Direct Unsubsidized Loan is not based on need; therefore students who do not qualify for need-based aid may still apply for an Unsubsidized Direct Loan to meet educational expenses. The annual loan amount is $40,500 minus the student's Direct Subsidized Loan eligibility. The annual loan amount is $20,500 for graduate students enrolled in programs other than the DVM program. The school will determine eligibility. The interest rate is 6.8%. The loan origination fee for loans disbursed after July 1, 2009 is 1.5%, however the Department of Education will deduct a fee of only 0.5% initially. The remaining 1.0% will not be charged unless the borrower fails to make the first 12 monthly payments on time.
Federal loans can be partially or fully pre-paid without penalty.
Direct Graduate PLUS
The Direct Graduate PLUS loan is a federal loan with a fixed 7.9% interest rate and a 4% federal loan origination fee. The Department of Education will only charge a 2.5% origination fee initially. The remaining 1.5% will not be charged unless the borrower fails to make the first 12 monthly payments on-time. Borrowers are eligible to receive up to the cost of education minus all other aid received from all sources. The loan is not subsidized; therefore the borrower is responsible for paying loan interest from the time the loan is disbursed. Payment of interest may be deferred during enrollment. Unpaid interest will be added to the loan balance at repayment.
Graduate PLUS loan borrowers must first apply and be approved for their Stafford Loan eligibility prior to borrowing a Graduate PLUS loan. In addition to meeting the general federal aid eligibility requirements, applicants must have a satisfactory credit history to qualify for a Graduate PLUS loan. Individuals who apply and are turned down due to credit issues are eligible to obtain an endorser (co-signer) and reapply.
Direct Loan Application Process
Before applying for a federal loan, students must meet general eligibility requirements. Applicants should refer to the TCSVM financial aid application and instruction packet for additional information about other forms they must complete in order for the Financial Aid Office to determine their student loan eligibility.
The Cummings School will determine loan eligibility based on the results of the Free Application for Federal Student Aid (FAFSA) and using a formula that takes into account the cost of education and other financial aid being received by the student.
After the student receives a notice of financial aid eligibility from the school, the student must take the following actions to receive a loan:
- Complete a Federal Direct Loan Master Promissory Note (MPN) and a Federal Direct Graduate PLUS Loan MPN if also applying for a Graduate PLUS loan.
- First time Federal Direct Loan or Federal Direct Graduate PLUS loan borrowers at the Cummings School must complete student loan entrance counseling.
- Submit a loan certification request to the Financial Aid Office. This form will be supplied with your notice of financial aid eligibility.