Types of loans

The loan you choose will depend on your individual circumstances.

When you receive a loan under US Financial Aid, the US Department of Education is your lender. There are four loan types available under this program:

  • direct subsidised loans
  • direct unsubsidised loans
  • direct PLUS loans
  • direct consolidation loans.

If you’re not eligible for US Financial Aid, you may be able to secure a private loan through a non-government lender. You can find outlines of the different types of loans and borrowing limits below.

For more information, visit the US Federal Student Aid website.

A direct subsidised loan, also known as a Stafford loan, is based on financial need as determined by the US Department of Education. This type of loan is described as ‘subsidised’ because the government will pay the loan interest:

  • while you are at university at least half-time
  • during any authorised period of deferment
  • during the six-month grace period after you leave university or reduce your enrolment to less than half-time.

For information on interest rates, see the US Federal Student Aid website.

If you’re eligible for this kind of loan, you may not receive it for more than 150 per cent of the published length of your course. For example, if the actual duration of your course is two years, you’ll only be eligible to receive financial aid for three years.

Important: Under your responsibilities as an international student in Australia, you need to complete your studies by the end date specified on your Confirmation of Enrolment, which will reflect the published length of your course. Please keep this restriction in mind when considering the length of your loan.

A direct unsubsidised loan is not based on financial need. This type of loan is described as 'unsubsidised', because you are responsible for paying the interest from the time the money is disbursed.

You may pay the interest as it’s due, or you may postpone payment and allow interest to accumulate:

  • while you are enrolled at least half-time
  • during any authorised period of deferment
  • for the six-month grace period after you leave university or drop below half-time enrolment.

If you choose to postpone interest payments, you won’t need to make any loan payments while you’re at university. However, the interest will accrue and be capitalised (added to your principal loan balance), which means you’ll need to pay more when you leave university.

For information on interest rates, see the US Federal Student Aid website.

Direct PLUS loans are not based on financial need. They are available to:

  • parents of dependent undergraduate students
  • graduate or professional students.

Direct PLUS loans: Parents of dependent undergraduate students

You’re eligible for a direct PLUS loan if:

Your child’s Cost of Attendance (COA) must be calculated before a direct PLUS loan can be awarded. You may use the funds to pay your child’s entire COA minus any other financial aid they have received. Your child is eligible to borrow funds under their own signature up to specified amounts.

For information on loan interest and fees, see the US Federal Student Aid website.

You must begin making payments within 60 days after the loan is fully disbursed, although deferment of payment may be available through selected loan servicers.

To ensure all data is verified quickly and accurately, both you and your child will need to complete an application form.

Direct PLUS loans: Graduate or professional students

Graduate and professional students are eligible to apply for direct PLUS loans on their own behalf.

To access this loan, you:

  • must first have applied for and been awarded aid under the direct unsubsidised loan program
  • will need to go through a federal credit check process, which only looks for bad credit.

You do not need to meet other financial standards as with private alternative loans.

You may use the direct PLUS loan to cover the difference between your COA and other financial aid you have received.

For information on loan interest and fees, see the US Federal Student Aid website.

Direct consolidation loans allow you to group all applicable US Financial Aid loans into one loan with a fixed rate and a single, lower monthly payment. It won’t cost you anything to consolidate your loans, but a longer repayment term increases the amount of interest you’ll pay over the term of your loan.

To be eligible for a consolidation loan, you must be in a grace period, repayment, deferment or forbearance. For more information, visit the US Federal Student Aid website.

You can access a range of private education loans through non-government lenders. Private loans are approved based on credit history.

We strongly recommend that you apply for federal loans before applying for a private education loan, as federal loans have lower interest rates and other benefits. You can then use private loans to cover the difference between your maximum COA and other financial aid you receive.

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

Please note:

  • We can’t help you procure a direct loan if you’re enrolled in a nursing degree or a non-degree program, including Certificate, Graduate and Postgraduate Diploma programs. However, we can help you with private loans.
  • For your student visa application, you must show proof of funds to cover your tuition and living expenses. We only provide this for federal loans. If you plan to obtain a private loan to help cover your tuition fees or living expenses, you'll need to contact your loan provider directly for proof of funds.

The amount of money you can borrow depends on whether you’re independent or dependent, your grade level and the type of loan you receive. To find out the annual borrowing limit for your situation, please visit the US Federal Student Aid website.