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Education loans


Almost all families use education loans to cover at least part of the cost of college. Unlike grants, scholarships, and work-study, loans are borrowed money that will need to be repaid, with interest, so it's important to choose carefully. Learn more about comparing college costs, financial aid awards, and education loans at vsac.org/learn

 

Evaluate which loan(s) are best for your family's situation, and borrow only what you need.

 

Start with federal Direct Subsidized student loans, federal Perkins loans, and federal Direct Unsubsidized student loans. Then compare the federal Direct PLUS loan for parents and graduate students with VSAC's fixed-rate Vermont Advantage loan for students coming to Vermont for college and for Vermont residents attending colleges in the U.S. and abroad.  

 

Education Loan Types

Federal education loans


To apply for any of the following federal loans, first fill out the Free Application for Federal Student Aid (FAFSA).

Based on your FAFSA information, the financial aid office at your college or program will determine the loan types for which you are eligible. These may include:

Perkins loan for students


Perkins loans are:

  • awarded to undergraduate, graduate, or professional degree students who demonstrate exceptional financial need
  • awarded to both full-time and part-time students
  • available only at participating schools
  • repaid by students to their schools

The current fixed interest rate on all Perkins loans is 5%.

The financial aid office at your school will determine whether or not you are eligible for a Perkins loan, based on the information reported on your FAFSA. Your school may also consider factors not included on the FAFSA. If you are eligible, the financial aid office will include a Perkins loan in your financial aid award notification.

 

Direct Subsidized and Unsubsidized loans for students


Provided directly from the federal government for:

  • undergraduate, graduate, or professional degree students
  • students enrolled at least half time

The financial aid office at your school will determine whether or not you are eligible for these loans, based on the information reported on your FAFSA. Your school may also take into consideration factors not included on the FAFSA. If you are eligible, the financial aid office will include federal Direct Subsidized and/or Unsubsidized loans in your financial aid award notification.


What's the difference between federal Direct Subsidized and Unsubsidized loans?


Federal Direct Subsidized loans

The U.S. Department of Education will pay the interest:

  • while you’re in school at least half time
  • during any periods of deferment

To obtain a federal Direct Subsidized loan, you must demonstrate financial need.


Federal Direct Unsubsidized loans

The U.S. Department of Education does not pay the interest for you. Unpaid interest is added to the principal balance after the six-month grace period. If you make interest payments while you’re in school, or before the end of your grace period, your loan debt will be lower upon entering repayment.

Students do not need to demonstrate financial need to obtain this loan.

Learn more about how interest works.


rates for undergraduate students


Federal Direct Subsidized and Unsubsidized loans for undergraduate students

  • 4.66% fixed interest rate for loans with a first disbursement between July 1, 2014, and June 30, 2015
  • 4.29% fixed interest rate for loans with a first disbursement between July 1, 2015, and June 30, 2016
  • 1.073% loan fee for loans with a first disbursement between October 1, 2014, and September 30, 2015
  • 1.068% loan fee for loans with a first disbursement between October 1, 2015, and September 30, 2016

Apply through the financial aid office at your school.


rates for graduate/professional students


Federal Direct Unsubsidized loans for graduate students

  • 6.21% fixed interest rate for loans with a first disbursement between July 1, 2014, and June 30, 2015
  • 5.84% fixed interest rate for loans with a first disbursement between July 1, 2015, and June 30, 2016
  • 1.073% loan fee for loans with a first disbursement between October 1, 2014, and September 30, 2015
  • 1.068% loan fee for loans with a first disbursement between October 1, 2015, and September 30, 2016

Apply through the financial aid office at your school.


student loan limits


Schools will set both your federal Direct Subsidized and Unsubsidized loan amounts, up to the following limits:

ANNUAL  Dependent student Independent student or dependent student whose parent is ineligible for PLUS
First year  $5,500 $9,500
(up to $3,500 may be in federal Direct Subsidized loans)
Second year  $6,500 $10,500
(up to $4,500 may be in federal Direct Subsidized loans)
Remaining years  $7,500 $12,500
(up to $5,500 may be in federal Direct Subsidized loans)

CUMULATIVE

$31,000 dependent undergraduate
$57,500 independent undergraduate or dependent student whose parent is ineligible for PLUS

 

Direct PLUS loans for parents and for graduate/professional students


PLUS loans are provided directly from the federal government. They can be used to make up the difference between the total cost of college and the various kinds of financial aid and other loans you receive.

Eligibility for the loan depends on a credit check. If you are eligible, you can apply for a PLUS loan through the financial aid office at your school. Some schools will include a PLUS loan in their financial aid award notifications; others will not. It is your choice whether or not to borrow some or all of this loan amount. Compare the federal Direct PLUS loan to VSAC's Vermont Advantage student loan.


  • Parent PLUS loans enable parents to borrow to help pay education costs for a dependent student enrolled in an undergraduate degree program.
  • Graduate PLUS loans are available for graduate and professional degree students.
PLUS interest rates for parents or graduate/professional students


Parent and Graduate PLUS loans

  • 7.21% fixed interest rate for loans with a first disbursement between July 1, 2014, and June 30, 2015
  • 6.84% fixed interest rate for loans with a first disbursement between July 1, 2015, and June 30, 2016
  • 4.292% loan fee for loans with a first disbursement between October 1, 2014, and September 30, 2015
  • 4.272% loan fee for loans with a first disbursement between October 1, 2015, and September 30, 2016

Apply through the financial aid office at your school.



Parents, think you may not qualify for a PLUS loan? Apply anyway! If you are denied, your student can possibly receive an additional amount up to $5,000 in federal Direct Unsubsidized loans.

 


The Vermont Advantage education loan


VSAC provides the fixed-rate Vermont Advantage loan for students coming to Vermont for college and for Vermont residents attending colleges in the U.S. and abroad.

Compare VSAC's Vermont Advantage student loan to federal Direct PLUS

Sign up for e-mail notification about VSAC education loan programs.

 



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