Columbia University Student Financial Services

Direct Loan Program Overview

Direct Loan Program Overview

Direct Loan Program Overview

On March 30, 2010 President Obama signed a reconciliation bill that significantly reforms the processing of federal loans and grants for students.  In light of this legislation, Columbia University, like all other higher educational institutions in the United States, transitioned to the Federal Direct Student Loan Program beginning with the 2010-2011 academic year.

Like the previous Federal Family Education Loan Program (FFELP), the Direct Loan Program provides federally insured loans to students and their families. Rather than working with private lenders who process and disburse federal loans, students and their families now receive federal loans directly from the U.S. Department of Education.

The Direct Loan Program consists of three main types of loans:


Federal Direct Loan - Subsidized Eligibility


    The federal government also limits the amount of money that can be borrowed each academic year.

    Federal Direct Loan - Subsidized Eligibility

    Subsidized loans are for students with demonstrated financial need, as determined by federal regulations. No interest is charged while a student is in school at least half-time, during the grace period, and during deferment periods. Subsidized Direct Loans do not require a credit check.

    Eligible borrowers

    Interest Rate

    Loan Fees

    Repayment

    • U.S. Citizens and Permanent Residents and Eligible Non-Citizens
    • Enrolled at least half-time
    • Maintain satisfactory academic progress
    • Cannot be in default on a federal student loan
    • Have federally defined financial need

    4.5% for loans disbursed on or after July 1, 2010 but prior to July 1, 2011

    6.8% for graduate loans

    1% origination fee for loans disbursed on or after July 1, 2010 but prior to July 1, 2011, with a .5% upfront rebate of  the fee

     

    Six-month grace period; Standard Repayment term is 10 years, Extended Repayment term is 25 years

     

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    Federal Direct Loan - Unsubsidized (formerly Unsubsidized Stafford)

    Unsubsidized loans are not based on financial need.  Interest is charged during all periods, even during the time a student is in school and during grace and deferment periods. Unsubsidized Direct Loans do not require a credit check.

    Eligible borrowers

    Interest Rate

    Loan Fees

    Repayment

    • U.S. Citizens and Permanent Residents and Eligible Non-Citizens
    • Enrolled at least half-time
    • Maintain satisfactory academic progress (as defined by your school)
    • Cannot be in default on a federal student loan
    • Award not based on federally defined need

    6.8%

    1% origination fee with a 0.5% upfront rebate of the fee

    Six-month grace period; Standard Repayment term is 10 years, Extended Repayment term is 25 years. Interest accrual begins at disbursement but can be paid monthly or prior to capitalization.

     

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    Federal Direct PLUS Loan (which includes Graduate PLUS)

    Under the PLUS loan program, parents and/or graduate and professional students may borrow up to the full cost of education minus other financial aid received.  Interest is charged during all periods and credit checks are required.

    Each time you wish to take out a PLUS loan, you must complete a PLUS Loan Authorization Form to authorize Columbia University to request your credit history to determine eligibility.

    • PLUS Authorization Form -Students [Link to form]
    • PLUS Authorization Form -Parents should contact the school

    Eligible lenders

    Interest Rate

    Loan Fees

    Repayment

     

    7.9%

    4% origination fee with an upfront rebate of 1.5%

    Begins at the time the PLUS loan is fully disbursed and the first payment is due within 60 days after the final disbursement.  Borrowers are given a 6 month post enrollment period to align the repayment with the direct subsidized/unsubsidized loans.

    *Applicants can add an endorser or can appeal their credit decisions if denied.

     

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