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Citizens of the United States and Permanent Residents are eligible to borrow federal loans to help finance their educational costs.
There are two types of Federal Direct Loans available for U.S. Citizens and Permanent Residents to borrow:
Borrowers are eligible to receive a Federal Direct Unsubsidized Stafford Loan for up to $20,500 per academic year. The interest rate for Stafford Loans in 2016/2017 for graduate students is fixed at 5.31% which will begin accruing from the time the loan is disbursed. For loans first disbursed prior to October 1, 2016 a 1.068% origination fee is charged by the Department of Education which results in the loan borrower receiving 98.932% of the amount borrowed. For example, if a student borrows $20,500, he or she will receive $20,500 x 98.932% = $20,281. The maximum amount that can be received is the lesser of $20,500 or the difference between a student’s cost of education—as determined by Student Financial Services—and all other aid from all sources that a student is receiving.
Borrowers are eligible to receive a Graduate PLUS Loan for up to the difference between a student’s cost of education—as determined by Student Financial Services—and all other aid from all sources that a student is receiving. The interest rate for Grad PLUS Loans to graduate students is fixed at 6.31% for the 2016/2017 academic year. Rates for subsequent years will be based on the 10-year treasury bill rate--as auctioned in the May preceding the beginning of the academic year--plus 4.6%. Interest will begin accruing from the time the loan is disbursed. For loans first disbursed after December 1, 2015 a 4.272% origination fee is charged by the Department of Education which results in the loan borrower receiving 95.728% of the amount borrowed. For example, if a student borrows $30,000 he or she will receive $30,000 x 95.728% = $28,718.
Unlike the Stafford loan, Graduate PLUS loans have a credit component. Information on your credit report that will disqualify borrowers includes (but is not limited to):
Interest begins accruing on Federal Direct Loans from the time it is disbursed. For students enrolled for the full academic year, loans will be disbursed in two equal amounts with one disbursement at the beginning of each semester.
There are several repayment plans that allow borrowers repayment flexibility. Repayment plans are chosen after graduation—prior to entering repayment—and may be changed. Repayment plans include a standard 10 year plan, a 25 year extended repayment plan, a graduated plan and an income based repayment plan (IBR). Repayment begins six months after ceasing to be enrolled on at least a half-time basis.
Detailed information on repayment plans.
|Amount||Standard 10 Year||Extended 25 Year||Graduated||IDR (PAYE) $40K AGI||IDR (PAYE) $60K AGI||IDR (PAYE) $80K AGI|
As of September 30, 2015, Congress has eliminated the Perkins loan program.
Periods of time during which borrowers are not required to make payment on their federal educational Loans are called deferments and forbearances.
Borrowers are eligible for deferment while enrolled at least half-time, during periods of unemployment, while on active duty in the military during war-time or national emergency, while participating in a graduate fellowship and when experiencing temporary financial hardship. Deferment—other than for being enrolled—is limited to a period of three years for each category.
Students experiencing financial difficulty who do not qualify for a deferment can request forbearance for a maximum of three years.
In order to be eligible for a federal educational loan, a student must be a US citizen or permanent resident not in default on a student loan and who meets other federal criteria including registration with selective service (if male) and submission of the Free Application for Federal Student Aid(FAFSA). Be sure to use the correct school code (E00215). Frequently, students incorrectly select the Harvard Code (002155) preventing receipt of the FAFSA.
Graduate PLUS loan borrowers will also need to complete a credit check authorization form. This form will be made available in early June.
During orientation borrowers will attend a loan entrance counseling session during which the rights and responsibilities associated with borrowing a federal direct loan will be reviewed. Borrowers will also need to complete an online certification that acknowledges acceptance of the terms.
Borrowers will receive instructions on how to complete promissory notes. Promissory notes will remain in effect for the entire period of attendance at Harvard Kennedy School(HKS) if enrolled at HKS continuously. If enrolled in a joint degree program with a non-Harvard school, a borrower will have to complete a new promissory note upon return to HKS.
Borrowers are required to attend a student loan exit counseling session during their last semester of enrollment or prior to pursuing a leave of absence. In person sessions are held each spring. On-line exit counseling certification must also be completed through NSLDS.