HDS participates in federal loan programs as a way to make funds available to eligible candidates. First-time borrowers to any federal loan program must complete an online entrance interview and either electronically sign an entrance interview form or successfully complete an entrance interview quiz prior to the first disbursement of the loan. The quiz/form states the borrower's rights and responsibilities as well as the consequences of default. Upon receipt of a degree, approval of a leave of absence, or withdrawal from HDS, an online loan exit interview is required. In this session students will receive specific information on repayment options, indebtedness levels, and other general loan information.
In addition to exit counseling, first time borrowers or those who have not borrowed loans through the Direct Loan Program in the past 10 years will also need to complete a master promissory note. Students who enroll at HDS and opt to take out loans will be sent information during the summer prior to enrollment with instructions on how to complete the master promissory note.
U.S. citizens and eligible noncitizens who apply for financial aid and are determined federally eligible may receive a Federal Direct Unsubsidized Stafford Loan. Please be aware that beginning with the 2012-13 academic year, the Subsidized Stafford Loan program has been eliminated for graduate students.
The Unsubsidized Stafford is a guaranteed student loan; therefore, the only reason students can be turned down is if they have met their annual or aggregate loan limits or are currently in default of a current or previous federal loan. The unsubsidized loan does accrue interest while you are in school and during your six-month grace period. Borrowers will receive quarterly interest statements and will have the option to make the interest-only payments or allow the interest to be added to the base amount borrowed. The maximum amount a student may borrow per year, pending eligibility, is $20,500.
Interest rate and fees
As of July 1, 2013, the interest rate for Unsubsidized Stafford Loans has returned to a variable rate with a maximum interest rate cap of 9.50 percent. The interest rate will change each year on July 1 based on the 10-year Treasury Note Index plus 3.60 percent. For the 2014-15 academic year the interest rate will be 6.21 percent.
The origination fee as of December 1, 2013, is 1.072 percent.
The interest rate for an Unsubsidized Stafford Loan disbursed prior to July 2013 is a fixed 6.8 percent. The origination fee was 1 percent.
To qualify, an applicant must be a U.S. citizen or permanent resident and must not be in default of a previous federal education loan. Students must apply for financial aid by completing both the Free Application for Federal Aid (FAFSA) and the HDS Institutional Application for Financial Aid for each year enrolled. In addition, you must submit any additional information requested (selective service registration, proof of citizenship etc.).
A deferment is a postponement of payment on a loan, during which interest does not accrue if the loan is subsidized. You may qualify for a deferment while you:
- Are enrolled at least half time in an eligible postsecondary school or studying full time in a graduate fellowship program or an approved disability rehabilitation program.
- Are unemployed or meet our rules for economic hardship (limited to three years).
You may also be eligible for a deferment based on qualifying active duty service in the U.S. Armed Forces or National Guard. Refer to the MPN for your loan or contact the Direct Loan Servicing Center for more information about specific qualifications for deferment based on military service.
In most cases, you need to submit a deferment request to your loan servicer along with documentation of your eligibility for the deferment.
If you've gone back to school and your loan servicer receives enrollment information that shows you're enrolled at least half time, it will automatically put your loans into deferment and notify you. You have the option of cancelling the deferment and continuing to make payments on your loan.
HDS participates in the National Student Loan Clearing House. Students enrolled at HDS will have their enrollment reported after the drop/add period has ended. If you loan servicer is not enrolled in the clearinghouse you should contact them for a paper deferment form. Deferments are processed through the registrar’s office. The office of financial aid highly recommends that students confirm with their lender that the deferment has been processed before discontinuing their payments.
If you are in default on your loan, you are not eligible for a deferment.
If you can't make your scheduled loan payments, but don't qualify for a deferment, you may be eligible for a forbearance. A forbearance allows you to temporarily stop making payments on your loan, temporarily make smaller payments, or extend the time for making payments. Some common reasons for getting a forbearance are illness, financial hardship or serving in a medical or dental internship or residency. You can get more information by contacting your loan servicer.
Under certain circumstances, you can automatically be given a forbearance, for instance, while a deferment is being processed, forbearance, cancellation, change in repayment plan or consolidation, or if you're involved in a military mobilization or a local or national emergency.
If you are in default on your loan, you are not eligible for a forbearance.
When you graduate, drop below half-time, or withdraw from your academic program, you will receive a six-month grace period for your Direct Subsidized and Unsubsidized Loans. Once your grace period ends, you must begin repaying your loan(s). If the loan is subsidized interest is not accruing during this time.
There are several repayment options available to students. Please visit the Direct Loan Repayment website for repayment plan information. Students who are interested in determining what their estimated monthly payment might be can consult a loan calculator.
A limited amount of loan money is available through the Federal Perkins Loan program to those students who demonstrate the greatest financial need. In reviewing financial need, previous educational indebtedness is heavily weighted. Selection of the recipients for this loan is administered within the Office of Financial Aid. There is no separate application process for this loan, and students are not guaranteed to receive funding from this program, despite their ability to document financial need. The maximum annual limit for this loan is $8,000 for graduate students and varies according to need (the aggregate loan limit, including undergraduate Perkins Loan borrowing, is $60,000).
The Perkins Loan has a fixed interest of 5 percent and there are no loan fees.
The Perkins loan has a nine-month grace period after a student graduates, withdraws, or drops below half-time enrollment. During this time period interest is not accruing on the loan.
Repayment begins after the end of the nine-month grace period. The standard repayment is over a ten-year period.
Graduate students are eligible to borrow a Federal Direct Graduate PLUS Loan. The PLUS Loan allows students who qualify to borrow funds up to their cost of attendance minus all sources of financial aid. Before applying for a Graduate PLUS Loan, students are required to meet with a financial aid counselor.
Interest rate and fee
As of July 1, 2013, the interest rate for the Graduate PLUS Loan has returned to a variable rate with a maximum interest rate cap of 10.50 percent. The interest rate will change each year on July 1 based on the 10-year Treasury Note Index plus 4.60 percent. For the 2014-15 academic year the interest rate will be 7.21 percent.
The origination fee as of December 1, 2013, is 4.288 percent.
The interest rate for a Graduate PLUS Loan disbursed prior to July 2013 is a fixed 7.9 percent interest rate. The origination fee was 4 percent.
To qualify, an applicant must be a U.S. citizen or permanent resident and must have a satisfactory credit history. Individuals who apply and are turned down due to credit issues are eligible to obtain an endorser (co-signer) and reapply.
Borrowers are eligible to receive up to the cost of education minus all other aid received from all sources. Graduate PLUS Loan borrowers must first apply and be approved for their Stafford Loan eligibility prior to borrowing a PLUS Loan.
How to apply
HDS students must meet with a financial aid representative before a PLUS Loan will be certified. To apply for a Direct Graduate PLUS Loan, applicants must complete and return a credit check authorization form. Once you have passed the credit check, you will be notified of approval.
Deferments, forbearance, and repayment plans
Unlike private loans, PLUS Loans are federal loans which qualify for deferment, forbearance, forgiveness, consolidation, and several different repayment plans. Deferments include unlimited in-school deferment, and up to 3 years of deferment for financial hardship and unemployment. PLUS Loans also qualify for up to 3 years of forbearance. Repayment plan options include the 10-year standard plan, as well as an extended plan that will allow you to reduce your monthly payments by lengthening your repayment to up to 25 years. There is also an income-contingent repayment plan.
Please note, however, that PLUS Loans do not have a grace period and repayment will begin within 30 days of completing your program or dropping below half-time enrollment. There are, however, options to request a forbearance so that you can begin repaying your PLUS Loan after the same six-month grace period afforded the Stafford Loan.