Direct Loan Program Overview

IMPORTANT FEDERAL UPDATE

LEGISLATION HAS CHANGED SOME OF THE TERMS OF THE DIRECT LOAN PROGRAM FOR THE 2013-2014 ACADEMIC YEAR.  The following changes and updates are effective as of July 1, 2013.

  • ELIMINATION OF DIRECT SUBSIDIZED LOAN FOR GRADUATE STUDENTS Graduate and professional students are no longer eligible to receive subsidized loans, but may still qualify for unsubsidized loans, as outlined in the chart below. This means that you will begin to accrue interest on loans as soon as you receive your aid.
  Loans for loan periods
beginning before
July 1, 2012
Loans for loan periods beginning on or after
July 1, 2012
  Subsidized Loan Maximum Unsubsidized Loan
Maximum
Subsidized Loan Maximum Unsubsidized Loan Maximum
All Graduate and
Professional Students
 $8,500  $20,500, less any subsidized amount received  $0  $20,500
Certain Health
Professions Students
 $8,500  $47,167, less any subsidized amount received  $0  $47,167
  • ELIMINATION OF INTEREST SUBSIDY DURING GRACE PERIOD FOR ALL STUDENTS Unpaid interest accrued during the 6-month grace period after graduation will be added to the unpaid principal of your loan.
  • ELIMINATION OF THE UPFRONT REBATE FOR ALL STUDENTS Upfront rebates will be eliminated and origination fees will be administered (1.051% on Federal Direct Subsidized and Unsubsidized and 4.204% on Direct Plus loans). See the chart below for more information.

2013-2014

Loan Program
Fees for loans disbursed prior to July 1, 2013 Fees for loans disbursed on or after July 1, 2013 Fees for loans disbursed on or after December 1, 2013
Direct Stafford Loan  1.00% 1.051% 1.072%
Direct PLUS Loan  4.00% 4.204% 4.288%

2012-2013

Loan Program
Fees for loans disbursed prior to July 1, 2012 Fees for loans disbursed on or after July 1, 2012
Direct Stafford Loan  0.5% 1.0%
Direct PLUS Loan  2.5% 4.0%
  • Change in PLUS Loan Credit Criteria: New items, such as unpaid collection amounts, bankruptcy discharges, foreclosures and wage garnishments will now trigger denials. For more information see the “Federal Direct PLUS Loan” section at the bottom of this page.

On March 30, 2010, President Obama signed a reconciliation bill that significantly reformed the processing of federal loans and grants for students. In light of this legislation, Columbia University, like all other higher educational institutions in the United States, transitioned to the Federal Direct Student Loan Program beginning with the 2010-2011 academic year.

Like the previous Federal Family Education Loan Program (FFELP), the Direct Loan Program provides federally insured loans to students and their families. Rather than working with private lenders who process and disburse federal loans, students and their families now receive federal loans directly from the U.S. Department of Education.

The Direct Loan Program consists of three main types of loans:

Federal Direct Loan - Subsidized Eligibility (Undergraduate Only)

The federal government also limits the amount of money that can be borrowed each academic year.

Subsidized loans are for students with demonstrated financial need, as determined by federal regulations. No interest is charged while a student is in school at least half-time, during the grace period, and during deferment periods. Subsidized Direct Loans do not require a credit check.

2013-2014 (Current Academic Year)

Eligible Undergraduate Borrowers

Interest Rate

Loan Fees

Repayment

  • U.S. Citizens and Permanent Residents and Eligible Non-Citizens
  • Enrolled at least half-time
  • Maintain satisfactory academic progress
  • Cannot be in default on a federal student loan
  • Have federally defined financial need

3.86% for undergraduate students for loans disbursed on or after July 1, 2013.

1.051% origination fee for loans disbursed on or after July 1, 2013

1.072% origination fee for loans disbursed on or after December 1, 2013

Six-month grace period; Standard Repayment term is 10 years, Extended Repayment term is 25 years

2012-2013 (Prior Academic Year)

Eligible Undergraduate Borrowers

Interest Rate

Loan Fees

Repayment

  • U.S. Citizens and Permanent Residents and Eligible Non-Citizens
  • Enrolled at least half-time
  • Maintain satisfactory academic progress
  • Cannot be in default on a federal student loan
  • Have federally defined financial need

3.4% for undergraduate students for loans disbursed on or after July 1, 2011 but prior to July 1, 2012

6.8% for undergraduate students for loans disbursed on or after July 1, 2012.

6.8% for graduate loans

1% origination fee for loans disbursed on or after July 1, 2011 but prior to July 1, 2012, with a .5% upfront rebate of  the fee

**For loans disbursed July 1, 2012 and after the upfront rebate of .5% is no longer offered

Six-month grace period; Standard Repayment term is 10 years, Extended Repayment term is 25 years

Federal Direct Loan - Unsubsidized Eligibility

Unsubsidized loans are not based on financial need.  Interest is charged during all periods, even during the time a student is in school and during grace and deferment periods. Unsubsidized Direct Loans do not require a credit check.

2013-2014

Eligible Borrowers

Interest Rate

Loan Fees

Repayment

  • U.S. Citizens and Permanent Residents and Eligible Non-Citizens
  • Enrolled at least half-time
  • Maintain satisfactory academic progress (as defined by your school)
  • Cannot be in default on a federal student loan
  • Award not based on federally defined need

3.86% undergraduate students and 5.41% for graduate/ professional students for loans disbursed on or after July 1, 2013

1.051% origination fee for loans disbursed on or after July 1, 2013

1.072% origination fee for loans disbursed on or after December 1, 2013

Six-month grace period; Standard Repayment term is 10 years, Extended Repayment term is 25 years.

Interest accrual begins at disbursement but can be paid monthly or prior to capitalization.

2012-2013

Eligible Borrowers

Interest Rate

Loan Fees

Repayment

  • U.S. Citizens and Permanent Residents and Eligible Non-Citizens
  • Enrolled at least half-time
  • Maintain satisfactory academic progress (as defined by your school)
  • Cannot be in default on a federal student loan
  • Award not based on federally defined need

6.8% for loans disbursed on or after July 1, 2012

1% origination fee with a 0.5% upfront rebate of the fee

**For loans disbursed on and after July 1, 2012, the upfront rebate of .5% is no longer offered

Six-month grace period; Standard Repayment term is 10 years, Extended Repayment term is 25 years.

Interest accrual begins at disbursement but can be paid monthly or prior to capitalization.

Federal Direct PLUS Loan (which includes Graduate PLUS)

IMPORTANT UPDATE: Effective July 1, 2012, the Department of Education has modified credit criteria for the PLUS Loan program. Unpaid collection amounts and charge-offs will now be included in the credit review. Items such as 90 days delinquency on debts, bankruptcy discharges, foreclosures, and wage garnishments during the previous five years will now trigger denials, even for many who had previously been approved in 2011-2012. For more information, including what to do if you are denied, please see FAQs.

Under the PLUS loan program, parents and/or graduate and professional students may borrow up to the full cost of education minus other financial aid received.  Interest is charged during all periods and credit checks are required.

Each time you wish to take out a PLUS loan, you must complete a PLUS Loan Authorization Form to authorize Columbia University to request your credit history to determine eligibility.

2013-2014

Eligible Borrowers

Interest Rate

Loan Fees

Repayment

 

6.41%

4.024% origination fee for loans disbursed on or after July 1, 2013

4.288% origination fee for loans disbursed on or after December 1, 2013

Begins at the time the PLUS loan is fully disbursed and the first payment is due within 60 days after the final disbursement. 

Borrowers are given a 6-month post enrollment period to align the repayment with the direct subsidized/unsubsidized loans.

2012-2013

Eligible Borrowers

Interest Rate

Loan Fees

Repayment

 

7.9%

4% origination fee with an upfront rebate of 1.5%

**For loans disbursed on or after July 1, 2012, the upfront rebate will no longer be offered.

Begins at the time the PLUS loan is fully disbursed and the first payment is due within 60 days after the final disbursement. 

Borrowers are given a 6-month post enrollment period to align the repayment with the direct subsidized/unsubsidized loans.

* Applicants can add an endorser or can appeal their credit decisions if denied.