Federal student loans are available to most students regardless of income and provide a range of repayment options including loan forgiveness benefits, which private educational loans are not required to provide. The government pays the interest while the student is in school and during grace periods. Loans are monies you borrow and must be paid back.
All federal loan programs require the student to:
- Complete a current academic year FAFSA, and meet all FAFSA eligibility requirements
- Not be in federal loan default, nor owe a federal grant overpayment
- Be enrolled in at least half-time
- Not exceed the annual loan and lifetime aggregate limits
Types of student loans available:
Manage Your Student Loans:
Sacramento State participates in the William D. Ford Federal Direct Loan program. Under this program, the U.S. Department of Education is your lender. You can find more information on Direct Loans here: www.studentloans.gov. Quick Reference: Direct Loan Checklist
Direct Loan Process
Accepting the Direct Loan offer, will initiate To Do list items on your My Sac State Student Center to complete the Master Promissory Note (MPN) and Entrance Loan Counseling (ELC). All Sacramento State students must complete the MPN and Entrance Loan Counseling at least once. Check your My Sac State Student Center for instructions after you have accepted your loan.
The Federal Direct Subsidized Loans are long-term with fixed interest rates and awarded to undergraduate and credential students based on financial need. Interest is paid by the government while the borrower is enrolled at least half-time (in-school deferment).
The Federal Direct Unsubsidized Loans are long-term with fixed interest rates and awarded to undergraduate, credential, graduate/professional students regardless of financial need. Interest is the borrower's responsibility. The borrower will be charged interest and can either pay the interest while in school or defer the interest which will be capitalized (added) to the outstanding principal when the student enters repayment. We strongly encourage students to pay the interest while attending school.
Federal Perkins and Nursing Loans are both serviced by Sacramento State and are awarded to eligible students on a first come first serve basis to eligible students. The Perkins and Nursing loans are offered at a 5% interest rate. They are limited to a percentage of a student's need because of demand and limited funding. Repayment begins nine months after graduation and/or dropping below half-time status. The government pays the interest while the student is in school and during grace periods.
- Enrolled at least half-time
- Demonstrate financial need
- Cannot be offered both loan programs during the same semester
- Nursing Loan students only:
- Must be admitted to the clinical portion of Nursing Program, and
- Financial aid applicants will be automatically selected for verification
Awarding and Disbursement:
Both the Perkins and Nursing loans are offered by the Financial Aid Office in a fair and equitable manner and therefore discourages written requests for these loans.
Students must complete additional loan requirements before a loan can disburse. Within a week of accepting the loan, you will have a To Do list item on your My Sac State Student Center providing you instructions and a link to complete the loan requirements.
Graduate students and parents of dependent students are eligible to borrow under the PLUS Loan program up to their Cost of Attendance minus other estimated financial resources. The Direct PLUS is a long-term program with a fixed interest rate and is subject to a credit check and approval by the lender. Students must be enrolled at least half-time to receive this loan.
PLUS loans are disbursed after all requirements are met, but no earlier than 10 days prior to the first day of instruction. Any debts owed to the University; including tuition, housing, etc., will be deducted from the PLUS disbursement. Any PLUS funds remaining will be refunded to the borrower.
- Graduate/Professional student, refer to the Direct Graduate/Professional PLUS Loan Request form for the application process.
- Parent of dependent student, refer to the Direct Parent PLUS Loan Request form for the application process.
- 2014-2015 Direct Loan Forms
- For more information about the Direct PLUS Loan program visit Federal Student Aid.
These loans may be appropriate for some students who do not qualify for the federally guaranteed subsidized, unsubsidized and parent PLUS loans. However, students should always take advantage of their federal financial aid eligibility, including all loan programs when possible. In most cases, you will be required to meet with a financial aid counselor to review other aid options. This is a federal lending regulation. Fees and interest rates can be based on your credit score, therefore, you are encouraged to shop different lenders for the best option available. Sacramento State does not endorse or recommend private lending programs.
Alternative Loan Process:
- The student initiates and completes a loan application with a private student loan lender
- If credit approved, the private lender will electronically send a School Certification request to the Financial Aid Office at Sacramento State
- An Alternative Loan Counseling To Do list item is placed on your My Sac State Student Center
- You must meet with a Financial Aid Counselor during drop-in counseling hours to complete the Alternative Loan Counseling requirement
- Sacramento State begins certifying ALL student loans (including private) beginning in July for the upcoming academic year
- Credit approvals expire. You are encouraged to apply for a private loan no earlier than June 1 for the upcoming academic year
- Private loans are certified by the Financial Aid Office one academic year at a time
- When applying for a private loan, use the correct loan period for the term(s) or academic year you are requesting the private loan for
- An academic year loan includes Fall and Spring
- 2014-2015 academic year loan period: 09/02/14 - 05/22/15
- Fall only loans:
- Fall 2014: 09/02/2014 - 12/19/2015
- Spring only loans:
- Spring 2015: 01/26/2014 - 05/22/2015
- Summer only loan periods should start with the beginning date of your first summer course and should end with the last date of enrollment for summer.
- If applying for a summer private loan, you MUST also complete a Summer Aid Application available every April.
|Class Level||Subsidized||Additional Unsubsidized Dependent||Additional Unsubsidized Independent|
*Includes loans received for undergraduate study
|Borrower||Loan Type||Loan Period||Fixed Interes Rate|
|Undergraduate Students||Direct Subsidized and Unsubsidized||7/1/2014 - 6/30/2015||4.66%|
|Graduate and Professional Students||Direct Unsubsidized||7/1/2014 - 6/30/2015||6.21%|
|Parents and Graduate Students||Direct PLUS||7/1/2014 - 6/30/2015||7.21%|
For more information on Interest Rates and Fees, click here.
IMPORTANT Loan Information
- Beginning July 1, 2012, all Federal Direct Subsidized and Unsubsidized loans will have a 1% origination fee applied at disbursement, and the Direct PLUS loan will have a 4% origination fee applied at disbursement.
- Federal Direct Subsidized Loans originated before July 1, 2012, interest is deferred while the borrower is enrolled at least half-time, during grace periods and periods of deferment.
There is a lot to consider when it comes to repaying federal student loans. Understanding the details of repayment can go a long way in your financial planning. Find out when your repayment begins, how to make a payment, repayment plan options and what to do if you have trouble making payments and much more. You can access your federal student loan information using the National Student Loan Data System (NSLDS).
Exit Loan Counseling
A mandatory online information session which takes place when you graduate or attend school less than half-time. The session explains your loan rights and responsibilities and when repayment begins. If you graduated or stopped attending at least half-time at Sacramento State, we will place a To Do list item in your My Sac State Student Center to complete this requirement. You must complete this federal requirement even if you are returning to the university or attending college elsewhere. For information on repayment and grace periods click here.
During a deferment you do not need to make payments. The government may pay the interest on your Federal Perkins Loan and/or Direct/Stafford Subsidized Loans. It does not pay the interest on your unsubsidized loan or any PLUS loans. In most cases, students receive an in-school deferment when enrolled in college during a period of at least half-time. For more information on deferments, click here.
If you can not make your scheduled loan payments, but do not qualify for a deferment, your loan servicer may grant you a forbearance. With a forbearance you may be able to stop making payments or reduce your monthly payments for up to 12 months. Interest will continue to accrue on your subsidized and unsubsidized loans and all PLUS loans. For more information on forbearances, click here.
Although consolidating your loans will simplify your loan repayment by combining your loans into one bill, you may lose the borrower benefits from your original loans. A loan consolidation can lower your monthly payments by giving you up to 30 days to repay your loans or provide you access to alternative repayment plans you would not have had before. Contact your loan servicer for assistance. For more information on loan consolidation click here.
You can use the Repayment Estimator to get an early look at which plans you may be eligible for and see estimates for how much you would pay monthly and overall.
Although, you may select or be assigned a repayment plan when you first began repaying your student loans, you can change repayment plans at any time. Contact your loan servicer to discuss repayment options or change your repayment plan. There are different repayment plans to choose from:
|Repayment Plan||Eligible Loans||Time Frame||Quick Description|
|Standard Plan||Direct Subsidized and Unsubsidized, all PLUS loans (student/parent)||Up to 10 years||You will pay less interest for your loan over time under this plan than you would under other plans.|
|Graduated Plan||Direct Subsidized and Unsubsidized, all PLUS loans||Up to 10 years||You will pay more for your loan over time than under the Standard Plan. Payments are lower at first and then increase over time.|
|Extended Plan||Direct Subsidized and Unsubsidized, all PLUS loans (student/parent)||Up to 25 years||Payments may be fixed or graduated. You will pay more for your your loan over time than under the Standard Plan.|
|Income Based Plan (IBR)||Direct Subsidized and Unsubsidized, PLUS loans made to students, Consolidated student loans||Up to 25 years||Payment is 15 percent of discretionary income; the amount will change as your income changes. Must have partial financial hardship, you will pay more for your loan over time than under the Standard Plan. After making 25 years of monthly payments, the outstanding balance will be forgiven. You may be taxed on the amount forgiven.|
|Pay As You Earn Plan||Direct Subsidized and Unsubsidized, Direct PLUS loans made to students, Direct Consolidated student loans||Up to 20 years||Monthly payment is 10 percent of discretionary income; the amount will change as your income changes. Must be a new borrower (as of 10/1/07) and must have been disbursed a Direct Loan (as of 10/1/11). Must have a partial financial hardship, you will pay more for your loan over time than under the Standard Plan. After making 20 years of monthly payments, the outstanding balance will be forgiven. You may be taxed on the amount forgiven.|
|Income Contingent Plan||Direct Subsidized and Unsubsidized, Direct PLUS loans made to students, Direct Consolidated student loans||Up to 25 years||Monthly payment is calculated each year based on income, family size and total amount of Direct Loans. You will pay more for your loan over time than under the Standard Plan. After making 25 years of monthly payments, the outstanding balance will be forgiven. You may be taxed on the amount forgiven.|
|Income Sensitive Plan||Stafford Subsidized and Unsubsidized, FFEL PLUS & Consolidated Loans||Up to 10 years||Monthly payment is based on annual income; will change as your income changes.You will pay more for your loan over time than under the Standard Plan. Monthly payments are based on each lender's formula.|
For additional information on repaying your student loans visit Federal Student Aid.
If you do not make a payment on time or you miss a payment, your loan is delinquent. You need to bring your account current to take your loans out of delinquency. If not, loan servicers report all delinquencies of at least 90 days to the three major credit bureaus.
To default means you failed to make monthly payments for 270 days. Some consequences of defaulting include, loosing eligibility for additional student aid, negative credit, federal and state tax refunds withheld, loan debt increase due to additional fees (court, collection, late fees, etc.), wage garnishment, etc.
Take the necessary steps to avoid defaulting on your student loans by:
- Understanding your loan agreement - Master Promissory Note
- Managing your borrowing - Don't borrow more than you need or expect to be able to repay
- Tracking your loans online - Use the National Student Loan Data System for information on all your federal student loans
- Keeping good records - Organize all your loan documents
- Notifying your loan servicer - Always maintain contact with your loan servicer of any income / school changes
For more information on avoiding default click here.
Loan forgiveness is the cancellation of all or some portion of your remaining federal student loan balance. If your loan is forgiven, you are no longer responsible for repaying that remaining portion of the loan. Student borrowers are encouraged to research all loan forgiveness and loan assumption programs prior to going into repayment.
Resources may be federal, state, or private. Some non-profit employer programs and service organizations may, like the Peace Corps, Teach America, etc. may also assist with loan repayment. The following list provides examples of some of the larger loan forgiveness programs.
- Public Service Loan Forgiveness Program
- Teacher Loan Forgiveness Program
- Federal HRSA Nursing Loan Forgiveness Program
Loan Cancellation and Discharge
Loan Cancellation is the release of a borrower from the obligation to repay all or a designated portion of principal and interest on a student loan. Types of cancelation include:
Loan Discharge is the release of a borrower from the obligation to repay the loan borrowed. Types of in Discharge include:
- Total and Permanent Disability
- Bankruptcy (in rare cases)
- Closed School
- False Certification of Student Eligibility
- Unpaid Refund
For more information on federal student loan forgiveness, cancellation or discharge, click here.