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%.
The U.S. Deparment of Education charge interest on unsubsidized loans during all periods (starting on the day your loan is disbursed). Therefore, you will pay more interest on an unsubsidized loan than on a subsidized loan.
If you choose not to pay the interest that accrues during periods when you're not required to make loan payments, we will add the unpaid interest to the unpaid principal amount of your loan. This is called "capitalization.". Capitalization increases the total amount you will have to repay, because you'll have to pay interest on this higher principal balance.
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 | $5500 | $3500 + $6000 = $9500 |
| Second-Year | $6500 | $4500 + $6000 = $10,500 |
| Third-Year and Remaining | $7500 | $5500 + $7000 = $12,500 |
| Maximum Cumulative Amounts | $31000 | Sub + Unsub = $57,500 |
| 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.
For Parent PLUS loans that are first disbursed on or after July 1, 2008, Parent PLUS loan borrowers have the option of beginning repayment on the Parent PLUS loan either 60 days after the loan is fully disbursed or not until six months after the dependent student on whose behalf the parent borrowed ceases to be enrolled at least a half time basis.
Parent PLUS borrowers may request an in-school deferment form for their dependent child. This change is only for Parent PLUS loans that are first disbursed on or after July 1, 2008. Parents should wait until the first disbursement of the loan occurs before making this call. Accruing interest could either be paid by the parent borrower monthly or quarterly, or be capitalized quarterly.
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
- Are you 24 years of age or older?
- Are you working toward a master’s degree or in a doctorate program?
- As of today, are you married? (Marital status may not be projected)
- Do you have children who receive more than half of their support from you?
- Do you have dependents (other than children or a spouse) who live with you and who receive more than half of their support from you?
- At amu to,e somce upi tirmed age 13. were bpth your parents deceased, were you in foster care or were you a dependent or ward of the court?
- Are you a veteran of the U.S. Armed Forces?
- Are you currently serving on active duty in the U.S. Armed Forces for purposes other than training?
- Are you or were you an emancipated minor as determined by a court in your state of legal residence?
- Are you or were you in legal guardianship as determined by a court in your state of legal residence?
- At any time on or after July 1, 2008, did your high school or school district homeless liaison determine that you were an unaccompanied youth who was homeless?
- At any time on or after July 1, 2008, did the director of an emergency shelter or transitional housing program funded by the U.S. Department of Housing and Urban Development determine that you were an unaccompanied youth who was homeless?
- At any time on or after July 1, 2008, did the director of a runaway or homeless youth basic center or transitional living program determine that you were an unaccompanied youth who was homeless or were self-supporting and at risk of being homeless?
If your child does NOT meet any of these criteria, you may apply for a Direct PLUS Loan for him or her.
