Types of loans
Stafford subsidized loans
Federal Subsidized Stafford Loan. This loan is based on financial need as defined by the Department of Education. The loan is 'subsidized' because the government pays the interest while you are in university at least half time. It also pays the interest during any authorized period of deferment and for the six-month grace period after you leave university or drop below half-time enrolment. The interest rate is fixed at 6.8%.
Under Australian ESOS legislation students studying in Australia are required to complete their studies within the duration of their initial Confirmation of Enrolment (CoE). CoE reflects the duration of a degree based on full-time study load.
Stafford unsubsidized loans
Federal unsubsidized Stafford loan
This loan is not based on financial need. Because it is 'unsubsidized,' you are responsible for paying the interest from the time the money is disbursed. The interest may be paid as it comes due, or it may be postponed and allowed to accumulate while you are in university, during any authorized period of deferment, and for the six-month grace period after you leave university or drop below half-time enrolment.
If payments are postponed, the interest accrues and is capitalized (added to your principal loan balance). If you choose this billing option, you won’t make any payments while you are in university. However, this option adds to the amount you will have to repay on your loan when you leave university. It may also increase the amount of your monthly payment. The interest rate is fixed at 6.8%.
Federal PLUS (Parent loan for undergraduate students)
This loan is not based on financial need. Parents are eligible for this loan if their child is a dependent undergraduate student as defined by the US Department of Education, if they meet certain credit guidelines and if the loan is certified by the university. Payments are due within 60 days after the loan is fully disbursed, although deferment of payment may be available through select lenders.
Parents may use this loan to pay the entire Cost of Attendance – minus any other financial aid received for their dependent student. The interest rate is currently fixed at 8.5%. Interest rates are based on the 91-day T-bill and are set annually on July 1.
An origination fee of 3%, mandated by the US Department of Education, is deducted from the total loan amount and repayment begins 60 days after receipt of the full disbursement. A credit check will be completed before approval of the loan has been made.
Dependant students are eligible to borrow funds under their own signature up to specified amounts. These calculations have to be completed first, prior to a determination as to PLUS loan amounts that can be awarded.
The parents of a dependant student may be eligible to borrow the difference between the COA and other aid awarded to the student.
Both the student and their parent(s) will be required to complete a La Trobe Financial Aid Application Form to ensure all data is verified quickly and accurately.
Stafford PLUS (graduate)
Beginning July 1, 2006, graduate and professional students are eligible to borrow through the Federal PLUS Loan program. Previously this loan was only available to parents of undergraduate students.
Graduate students may borrow this Federal Family Education Loan (FFELP) on their own behalf, to cover the difference between the Cost of Attendance (COA) and all other awarded aid, after applying for other Stafford aid.
Although the new legislation authorizing this change is in place, most references to the program on the federal web sites and official notices still refer to the PLUS Loan being a program for parents of undergraduate students.
This loan does go through a federal credit check process. This review looks for bad credit only. You do not have to meet other financial standards as with other private alternative loans. The interest rate is currently fixed at 8.5%.
Graduate students who wish to utilize access to additional US government funds under the new Grad PLUS loan, must first have applied for and been awarded aid under the original Stafford loan program.
Stafford consolidated loans
Stafford consolidation loans allow a student to group all applicable US federal student loans into one loan with a fixed rate and a single, lower monthly payment. The student will pay no additional fees to consolidate their loans. A longer repayment term increases the amount of interest a student will pay over the term of their loan.
Consolidation loans offer terms ranging from 10 to 30 years. Repayment options on consolidation loans include: Standard, Graduated and Income Sensitive repayment plans. To be eligible for a consolidation loan, a student must be in a grace period, repayment, deferment, or forbearance.
There are a number of other programs (Pell Grants, Perkins Loans, Direct Stafford etc) available under the same US legislation (Title IV) however these cannot be awarded whilst students are studying outside the US.
Whilst La Trobe cannot award aid under these programs it however can defer the repayment of these loans whilst you are attending La Trobe University on a full-time or more than half-time basis.
For more information on the loan types and interest rates, please visit the information pages by clicking the words.
