Student Loans
Interest Bearing Unsubsidized Loans (through the federal government)
A student's need is not a factor in determining eligibility for an Unsubsidized Loan. That is, students may qualify for an Unsubsidized Loan regardless of their own or their families' incomes.
Most federal student loans are interest free while the borrower is enrolled in school at least half time. The Unsubsidized William D. Ford Federal Direct Loan requires the borrower to pay the interest that accrues each month, even while the borrower is in school. Interest is charged beginning the day the loan is paid to you until the day the loan is repaid in full. These charges will not be paid by the Federal Government. The interest rate on Unsubsidized Direct Loans for periods of enrollment prior to July 1, 2006 is variable and adjusted once a year on July 1. The rate will never exceed 8.25 percent. For periods of enrollment beginning after July 1, 2006, the interest rate is fixed at 6.8%.
You may pay the accumulating interest while you are in school or you have the option of capitalizing the interest. Capitalizing interest means adding unpaid, accumulated interest to the principal balance of the loan. Capitalization increases the total cost of your loan...if you choose to let your interest be capitalized, you will repay more money in total than if you pay the interest while you are in school. Whichever option you choose, you are responsible for paying the full amount of all interest on the Unsubsidized Loan.
Maximum Annual Loan Limits
(You may not be eligible for these maximum amounts.)
| Undergraduate | Dependent Student | Independent Student |
|---|---|---|
| Sub + Unsub | Sub + Unsub = Total Amount | - |
| First-Year | $3500 | $3500 + $4000 = $7500 |
| Second-Year | $4500 | $4500 + $4000 = $8500 |
| Third-Year and Remaining | $5500 | $5500 + $5000 = $10,500 |
| Maximum Cumulative Amounts | $23,000 | Sub + Unsub = $46,000 |
| Graduate or Professional Student | $8500 + $12,000 = $20,500 | |
| Maximum Cumulative Amount: Undergraduate and Graduate |
Sub + Unsub = $138,500 | |
Additional information and an Unsubsidized Direct Ford Loan request form are available on our web site.
The Department of Education's Direct Loan Web Site provides an Interactive Budgeting Worksheet and Calculator that allows you to estimate your financial needs and create a budget for school and living expenses.
Frequently Asked Questions regarding the Direct Loan Program
The Federal Direct PLUS Loan enables parents of dependent students to receive funds directly from the U.S. Department of Education. As in the case of other Direct Loans, the Department is the lender rather than a bank, and loan proceeds are delivered through UW-Eau Claire. The interest rate is variable and is adjusted each year. It will never exceed 9 percent. Like the Unsubsidized William D. Ford Federal Direct Loan, the interest begins to accumulate on the date of the first loan disbursement.
Parents may borrow up to the amount of their child's educational costs (as set by the Financial Aid Office) minus any other financial aid he or she may receive. Financial need is not considered when determining eligibility.
The repayment period begins on the day after the loan is fully disbursed. The first payment will be due within 60 days after the final loan disbursement. The parent borrower is required to pay both principal and the interest that accumulates.
A dependent student is one who does not meet any of the criteria for an independent student. An independent student, according to federal definition, must meet at least one of the following criteria:
Independent Student Definition
- at least 24 years of age
- married
- a graduate student
- veteran
- orphan
- ward of the court
- someone with legal dependents other than a spouse
If your child does NOT meet any of these criteria, you may apply for a Direct PLUS Loan for him or her.
