As a U.S. citizen or permanent resident, you may be eligible to borrow two types of Federal Direct Loans—unsubsidized Stafford loans and Graduate PLUS loans—to help finance your education.
Unsubsidized Stafford Loans
As a borrower, you are eligible to receive a Federal Direct unsubsidized Stafford Loan up to $20,500 per academic year, with a 6.1 percent fixed interest rate in 2019-2020. Interest begins accruing from the time your loan is disbursed.
The U.S. Department of Education charges a 1.062 percent origination fee for loans first disbursed before October 1, 2019. Therefore, you will receive 98.938 percent of the amount borrowed. The maximum amount you can receive is the lesser of $20,500 or the difference between your cost of education—determined by the Office of Student Financial Services—and all other aid you are receiving.
Graduate PLUS Loans
You are eligible to receive a Graduate PLUS loan up to the difference between your cost of education—determined by the Office of Student Financial Services—and all other aid you are receiving. Grad PLUS loans have a 7.1 percent fixed interest rate in 2019-2020. Future rates are based on the 10-year Treasury bill rate—as auctioned in May before the start of the academic year—plus 4.6 percent. Interest begins accruing from the time your loan is disbursed.
The U.S. Department of Education also charges a 4.248 percent guarantee fee. As a borrower, this means you will receive 95.752 percent of your loan.
Graduate PLUS loans have a credit component, unlike the Stafford. Details in a credit report that will disqualify you as a borrower may include, but are not limited to:
- Current delinquency of 90 days or more
- Any of the following within the last five years of a credit check date:
- Tax lien
- Wage garnishment
- Title IV debt write off
- Open collection
Interest Accrual and Loan Disbursement
Your Federal Direct Loans begin to accrue interest from the time they are disbursed. If you enroll at HKS for a full academic year, loans will be disbursed in two equal amounts at the beginning of each semester.
There are several repayment plans to choose from after you graduate from HKS—and before you enter repayment—that you may be able to change at a later date.
Among your repayment plan options are:
- Standard 10-year plan
- 25-year extended repayment plan
- Graduated plan—the payment amount scales up over your repayment period
- Income-driven repayment plan (IDR)
You must begin paying your loans six months after you are no longer enrolled at HKS on at least a half-time basis. Examples of repayment amounts are listed below as reference.
Sample Repayment Amounts for Stafford and Grad PLUS Loans*
IDR (PAYE)** $40K AGI***
IDR (PAYE) $60K AGI
IDR (PAYE) $80K AGI
*U.S. Congress no longer issues Perkins loans as of September 30, 2015
** Pay As You Earn (PAYE)
***Adjusted Gross Income (AGI)
Terms and Conditions of Federal Loans
Deferments and Forbearances
Deferments and forbearances are periods of time when you, as a borrower, are not required to pay your federal educational loans. You may be eligible for deferment while you are:
- Enrolled at least half-time
- On active military duty during a time of war or national emergency
- Participating in a graduate fellowship
- Experiencing temporary financial hardship
Deferment is limited to a three-year period for these categories. You may be able to request forbearance for a maximum of three years if you are experiencing financial difficulty, but do not qualify for deferment.
You must be a U.S. citizen or permanent resident to be eligible for a federal educational loan. Additionally, you cannot be in default on an existing student loan. You must also meet other federal criteria, including being registered for selective service if you are male.
To be considered for a federal educational loan, submit your Free Application for Federal Student Aid (FAFSA) and include the correct Harvard Kennedy School code (E00215). Many applicants mistakenly choose the Harvard University code (002155)—this prevents them from submitting their FAFSA correctly.
If you are a Graduate PLUS loan borrower, you will also need to complete a Graduate PLUS Loan Application.
Loan Entrance Counseling and Completing Promissory Notes
You will attend a loan entrance counseling session during August orientation to learn more about your rights and responsibilities for borrowing a federal direct loan. You will need to complete an online loan entrance counselling certification to acknowledge and accept the terms and conditions of your loan.
You will also need to complete your promissory note, which will remain in effect for the entire time you are enrolled continuously at HKS.
Loan Exit Counseling
During your last semester enrolled at HKS—or before you go on a leave of absence—you will be required to complete a student loan exit counseling session. In-person sessions are held each spring. You will also need to complete an online exit counseling certification through studentloans.gov.