The Federal Direct Loan Program requires that applicants are either U.S. Citizens or Permanent Residents. Applicants must complete the Free Application for Federal Student Aid (FAFSA) and be enrolled at least half-time. The lender for these loans is the U.S. Department of Education. For detailed information on Federal Direct Loans, visit www.direct.ed.gov.
To apply for a Federal Direct Loan, visit www.studentloans.gov.
Student Loans
Federal Direct Stafford Loans are available to students who filed a FAFSA and are enrolled at least half-time. The U.S. Department of Education serves as the lender.
| Borrowing Limits | Subsidized | New Unsubsidized Eligibility | Unsubsidized for Independent or PLUS Loan Denied |
| Freshmen | $3,500 | $2,000 | $4,000 |
| Sophomores | $4,500 | $2,000 | $4,000 |
| Juniors | $5,500 | $2,000 | $5,000 |
| Seniors | $5,500 | $2,000 | $5,000 |
Lifetime Aggregate Borrowing = $31,000 for dependent students (no more than $23,000 of which can be subsidized) and $57,000 (no more than $23,000 of which can be subsidized) for independent students or those whose parents were denied a Parent PLUS Loan.
Loans may be subject to origination and Federal Default fees that are deducted from the loan disbursements. For 2010-11, the origination fee is 1.5%; however, the Direct Loan program offers a 1.0% rebate up front making the fee on this loan 0.5% for 2010-11. The amount of the rebate will be added back to the loan if, when the student enters repayment, the first 12 monthly payments on the loan are not made on time.
Subsidized Federal Direct Stafford Loans are based on financial need. The federal government pays the interest on subsidized loans for students who are enrolled at least half-time, during the grace period and during deferment periods.
Unsubsidized Federal Direct Stafford Loans are not based on financial need. Interest on unsubsidized loans will accrue while you are enrolled. Students may pay the interest on these loans quarterly while enrolled or choose to defer interest payments as long as they are enrolled at least half-time; however, interest does capitalize.
Stafford Loan Interest Rates:
| First Disbursement of Loan Made On or After |
First Disbursement of Loan Made And Before |
Subsidized Interest Rate |
Unsubsidized Interest Rate |
| July 1, 2010 | July 1, 2011 | 4.5% | 6.8% |
| July 1, 2011 | July 1, 2012 | 3.4% | 6.8% |
| July 1, 2012 | July 1, 2013 | 6.8% | 6.8% |
Direct Consolidation Loans allow borrowers to combine different eligible federal student loans into one Direct Consolidation Loan. Typically you would not do a consolidation loan until you are finished with borrowing including for post graduate studies.
Parent Loans
Federal Direct PLUS Loans are available to parents who have a dependent child in college. Individual eligibility is determined by subtracting all financial aid awards for the academic year from the cost of attendance. Financial need is not a requirement for this loan and parents do not have to complete the FAFSA to apply. Parents must apply and be approved for this loan each year. For loans disbursed on or after July 1, 2008, the interest rate is fixed at 7.9%.
Loans may be subject to origination and Federal Default fees that are deducted from the loan disbursements. For 2010-11, the origination fee is 4.0%; however, the Direct Loan program offers a 1.5% rebate up front, making the fee on this loan 2.5% for 2010-11. The amount of the rebate will be added back to the loan if, when the parent enters repayment, the first 12 monthly payments on the loan are not made on time.
Alternative Loans
Non-federal loans are available for students. These loans are private loan funds offered through a bank for the purpose of supplementing a student’s financial aid package. They are not federally endorsed or guaranteed, but they must be certified by the Office of Financial Aid to ensure the loan does not exceed your cost of attendance minus other financial aid. These loan funds are disbursed to the College and applied directly to your student account.
These loans generally require the borrower to be credit worthy or have a credit worthy co-signer and usually do not have as favorable interest rates as the federal programs. Alternative loan interest rates, fees charged, repayment terms and repayment benefits vary between lenders.
Students are encouraged to file the FAFSA and apply for federal loans before applying for alternative loans. For more information, contact the Office of Financial Aid.
Alternative Loan Lenders Sample List. This is not a complete list of all available lenders. Austin College students are encouraged to research all available lending options. (Lenders reserve the right to modify or discontinue loan programs at any time without notice.)
| Sallie Mae Smart Option Loan® Lender Code: 900905 |
Wells Fargo Collegiate® Loan Lender Code: 807176 |
| Chase Select™ Private Student Loans | College Access Loan (CAL) This loans is for Texas residents only and must be approved by the Office of Financial Aid before the application process can begin. This loan is not available for Jan Term travel programs. |
