Types of loans

Direct Subsidised Loans - Direct Stafford Loan

This loan is based on financial need as defined by the US Department of Education. The loan is 'subsidised' because the government pays the interest while you are at university at least half time. The US Government also pays the interest during any authorised period of deferment and for the six-month grace period after you leave university or drop below half-time enrolment.

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. To remain eligible to receive financial aid students must complete their course with 1.5 times the actual duration of their course (e.g. if the actual duration of your course is 3 years, you will only be eligible to receive financial aid for 4.5 years and you must complete your course within this duration).

Direct Unsubsidised Loans

This loan is not based on financial need. Because it is 'unsubsidised,' you are responsible for paying the interest from the time the money is disbursed. The interest may be paid as it is due, or it may be postponed and allowed to accumulate while you are enrolled at least half time, during any authorised 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 capitalised (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 currently fixed at 5.84%.

The current cost of attendance for the 2016 academic year is A$33,540.

Direct PLUS (Parent Plus 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 selected lenders.

Parents may use this loan to pay the entire Cost of Attendance (COA) – minus any other financial aid received for their undergraduate dependent student. The interest rate is currently fixed at 6.84%. Please note: interest rates are based on the 91-day T-bill and are set annually on 1 July.

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 the loan has been approved.

Dependant students are eligible to borrow funds under their own signature up to specified amounts. The COA calculations have to be completed first, prior to determing what 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 (PDF 30KB) to ensure all data is verified quickly and accurately.

Direct PLUS (Graduate Plus Loan)

From 1 July, 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 access the Direct Plus Loan on their own behalf, to cover the difference between the Cost of Attendance (COA) and all other awarded aid, after applying for other Direct Stafford aid.

This loan goes through a federal credit check process. The check only looks for bad credit. 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 want to access additional US government funds under the new Grad PLUS loan, must first have applied for and been awarded aid under the original Direct Stafford loan program.

Loan

Interest Rate

Direct Subsidised Loans (Undergraduates)

4.29%

Direct Unsubsidised Loans (Undergraduates)

4.29%

Direct Unsubsidised Loans (Graduate or Professional Students)

5.84%

Direct PLUS Loans (Parents and Graduate or Professional Students)

6.84%

Learn about interest rates and fees associated with federal student loans.

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 several repayment plans:

  • Standard
  • Graduated
  • Income Sensitive

To be eligible for a consolidation loan, a student must be in a grace period, repayment, deferment, or forbearance. For further information see Direct Loan Repayment Plans.

There are a number of other programs (Pell Grants, Perkins Loans etc) available under the same US legislation (Title IV), however these cannot be awarded whilst students are studying at foreign schools outside the US.

While La Trobe cannot award aid under these programs it can defer the repayment of these loans while you are studying at La Trobe University on a full-time or more than half-time basis.

Private loans

Private education loans are available from private non-government lenders and approval is based on credit history. La Trobe students can use private education loans to borrow the difference between the maximum Cost of Attendance (COA) and any federal or other loans/scholarships borrowed. We strongly recommend that students first apply for federal loans before applying for additional funds through a private education loan if required. Federal loans are more favourable due to the lower interest rates and other associated benefits. La Trobe University is unable to assist students enrolled in nursing degree programs and non-degree programs such as Certificate, Graduate and Postgraduate Diploma programs in procuring Direct Loan due to the recent legislative changes. We can still assist students with applying and administering a private loan to cover the COA.

It is important that you research carefully to find the loan provider that offers the best conditions for you.

Please note: for the student visa application you must show proof of funds to cover your tuition and living expenses. La Trobe University only approves your federal loans and issues an award letter detailing the approved amounts for student visa purposes. If you plan to obtain a private loan to help cover your tuition fees or living expenses, you will need to contact your private loan provider to supply evidence for student visa purposes.

Direct Loan borrowing limits

Annual borrowing limits for dependent undergraduate students (US$):

Grade levelCombined base limit for Subsidised and Unsubsidised LoansAdditional limit for Unsubsidised LoansTotal limit for Unsubsidised Loans (minus subsidised amounts)
First-year undergradute (freshman)$3500$2000$5500
Second-year undergraduate (sophomore)$4500$2000$6500
Third-year and beyond undergraduate (junior, senior)$5500$2000$7500

Annual borrowing limits for independent undergraduate students (US$):

Grade levelCombined base limit for Subsidised and Unsubsidised LoansAdditional limit for Unsusidised LoansTotal limit for Unsubsidised Loans (minus subsidised amounts)
First-year graduate (freshman)$3500$6000$9500
Second-year undergraduate (sophomore)$4500$6000$10 500
Third-year and beyond undergraduate (junior, senior)$5500$7000$12 500

Annual borrowing limits for graduate or professional students (US$):

Grade levelCombined base limit for Subsidised and Unsubsidised LoansAdditional limit for Unsubsidised LoansTotal limit for Unsubsidised Loans (minus subsidised amounts)
Graduate or professional$8500$12 000$20 500

How does the Title V of the Budget Control Act (BCA) of 2011 affect you?

For loans made for periods of enrolment (loan periods) beginning on or after 1 July, 2012, graduate and professional students are no longer eligible to receive Federal Direct Subsidised Loans. The terms and conditions of Direct Subsidised Loans received by any student for loan periods beginning before 1 July, 2012, for either graduate or undergraduate study, are not affected by this change.

The annual loan limit for graduate and professional students remains unchanged at US$20 500, but this amount will now be limited to Direct Unsubsidised Loans, as shown in the following chart:

Annual loan limits for graduate/professional students
All graduate and professional students

Loans for loan periods beginning before 1 July, 2012

Loans for periods beginning on or after 1 July, 2012

Subsidised Loan maximum

Unsubsidised Loan maximum

Subsidised Loan maximum

Unsubsidised Loan maximum

$8500

$20 500 (less any subsidised amount received)

$0

$20 500

The aggregate loan limit for graduate and professional students remains unchanged at US$138 500, not more than US$65 500 of which may be in subsidised loans.

The elimination of subsidised loan eligibility for graduate and professional students does not affect undergraduate student borrowers, who remain eligible to receive Direct Subsidised Loans.

Also, BCA clarifies that borrowers who are receiving direct loans for preparatory coursework necessary for admission into either an undergraduate program or a graduate/professional program, or for coursework required for teacher certification or recertification, remain eligible for Direct Subsidised Loans. Students enrolled in preparatory coursework or coursework required for teacher certification are considered undergraduate students for purposes of annual loan limits.

Life-time borrowing limits (US$):

Grade levelCombined base limit for Subsidised and Unsubsidised LoansAdditional limit for Unsubsidised LoansTotal limit Unsubsidised Loans (minus subsidised amounts)
Dependent undergraduate students - freshman (whose parents were denied a PLUS loan)$23 000$8000$31 000
Independent undergraduate students (and dependent students whose parents were denied a PLUS loan)$23 000$34 500$57 500
Graduate or professional$65 000$57 500$138 500

Aggregate limits for graduate students include loans borrowed as an undergraduate student.

For further information check out the US Federal Student Aid website.