Federal Direct Student Loans  How Much Can I Borrow?

Federal Direct Parent PLUS Loan  Federal Direct PLUS Loan Graduate Students

Private Loans

Use the repayment estimator to estimate your monthly payment and compare available repayment plan options for when you enter repayment.

In order to limit the amount you borrow in student loans, it is important to complete your degree in eight semesters and avoid withdrawing from classes.

Federal Direct Student Loans

Federal Direct Student Loans are low-interest loans for eligible students to help cover the cost of attendance. Eligible students borrow directly from the U.S. Department of Education and are assigned to a loan servicer. Undergraduate students must be enrolled for at least six credits (half-time), while graduate students must be enrolled for at least five credits to be eligible for Direct Student Loans.

Important Information

  • 2019-20 Undergraduate Subsidized and Unsubsidized Direct Loans interest rate: 4.53%
  • 2019-20 Graduate Unsubsidized Direct Loans interest rate: 6.08%

How to Apply

  1. File a Free Application for Federal Student Aid (FAFSA).
  2. Accept all or a portion of the award on myHeliotrope.
  3. If you accept a Student Direct Loan, you must complete the following steps:

Direct Subsidized Stafford Loan

  • Available to undergraduate students only who are enrolled in at least six credits (half-time).
  • Must have financial need, the difference between the cost of attendance (COA) at a school and your Expected Family Contribution (EFC). While COA varies from school to school, your EFC does not change based on the school you attend.
  • Interest does not accrue while in school at least half-time (six credits or more) and/or during a period of deferment, a temporary postponement of payment on a loan that is allowed under certain conditions and during which interest generally does not accrue on Direct Subsidized Loans, the subsidized portion of Direct Consolidation Loans, Subsidized Federal Stafford Loans, the subsidized portion of FFEL Consolidation Loans, and Federal Perkins Loans. All other federal student loans that are deferred will continue to accrue interest. Any unpaid interest that accrued during the deferment period may be added to the principal balance (capitalized) of the loan(s).
  • Learn more about Direct Subsidized Stafford Loans on studentaid.ed.gov.

Direct Unsubsidized Stafford Loan

  • Available to undergraduate and graduate students.
  • Interest accrues (accumulates) on an unsubsidized loan from the time it’s first paid out.
  • Interest payments are recommended while you are in school, during a period of grace, deferment/forbearance, a period during which your monthly loan payments are temporarily suspended or reduced. Your lender may grant you a forbearance if you are willing but unable to make loan payments due to certain types of financial hardships. During forbearance, principal payments are postponed but interest continues to accrue. Unpaid interest that accrues during the forbearance will be added to the principal balance (capitalized) of your loan(s), increasing the total amount you owe.
  • Interest will accrue and be capitalized if you choose not to pay the interest.
  • Learn more about Direct Unsubsidized Stafford Loans on studentaid.ed.gov.

Entrance Counseling

All Purchase College students borrowing Federal Direct Subsidized and/or Unsubsidized Loan(s) for the first time must complete Federal Direct Loan Entrance Counseling prior to the disbursement of funds. To complete the Federal Direct Loan Entrance Counseling, please visit studentloans.gov.

The Department of Education will notify Purchase College within two to three days after the entrance counseling is completed online.

Entrance Counseling provides to each first-time Federal Direct Loan borrower (other than borrowers of consolidated or Parent PLUS loans) access to information regarding the terms and conditions of the loan and of the borrower’s responsibilities, including:

  • the effect of the loan on the eligibility of the borrower for other forms of aid;
  • an explanation of the use of the Master Promissory Note;
  • the seriousness and importance of the student’s repayment obligation;
  • information on the accrual and capitalization of interest;
  • borrowers of Unsubsidized loans have the option of paying interest while in school;
  • definition of half-time enrollment and the consequences of not maintaining half-time enrollment;
  • importance of contacting appropriate offices if student withdraws prior to completion of program of study;
  • sample monthly repayment amounts;
  • obligation of the borrower to repay the full amount of the loan regardless of whether the borrower completes program or completes within regular time for completion, is unable to obtain employment upon completion, or is otherwise dissatisfied with or does not receive the education or other services the borrower purchased from the school;
  • the consequences of default;
  • information about the National Student Loan Database (NSLDS) to access borrower’s records; and
  • name and contact information for individual the borrower may contact with questions about the borrower’s rights and responsibilities or the terms and conditions of the loan.

Master Promissory Note (MPN/Loan Agreement)

The MPN is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the U.S. Department of Education. The MPN gives detailed descriptions on the terms and conditions of your loan(s). It includes information on how interest is calculated as well as deferment and repayments options available to you.

Generally the Federal Direct Subsidized and Unsubsidized MPN is valid for a period of 10 years. This means you should only need to complete the MPN once while attending Purchase College. Please be aware, you must have a valid MPN on file with the U.S. Department of Education prior to receiving any federal loan disbursement. Monitor the items listed on your MyHeliotrope account under Eligibility to determine if the MPN is needed.

To complete the MPN electronically, please visit studentloans.gov. Note, you need your Federal Student Aid ID (FSA ID) to sign the MPN.

The process takes approximately 30 minutes to complete and consists of the following four steps:

  1. Enter your personal information and school information.
  2. Enter information about two references who you have known for at least three years.
  3. Read all terms and conditions.
  4. Review, electronically sign (using FSA ID), and submit the MPN.

How much can I borrow?

Dependent Undergraduate Students

Year in School

Annual Amount

First Year (0-29 credits)

$5,500 (no more than $3,500 can be Subsidized)

Example: $3,500 Subsidized and $2,000 Unsubsidized

Second Year (30-59 credits)

$6,500 (no more than $4,500 can be Subsidized)

Example: $4,500 Subsidized and $2,000 Unsubsidized

Third Year (60-89 credits)

$7,500 (no more than $5,500 can be Subsidized)

Example: $7,500 Unsubsidized

Fourth Year and above (90+ credits)

$7,500 (no more than $5,500 can be Subsidized)

Example: $5,500 Subsidized and $2,000 Unsubsidized

Independent Undergraduate Students (and Dependent Undergraduate Students whose parents are denied the Federal Direct PLUS Loan)

Year in School

Annual Amount

First Year (0-29 credits)

$9,500 (no more than $3,500 can be Subsidized)

Example: $3,500 Subsidized and $6,000 Unsubsidized

Second Year (30-59 credits)

$10,500 (no more than $4,500 can be Subsidized)

Example: $4,500 Subsidized and $6,000 Unsubsidized

Third Year (60-89 credits)

$12,500 (no more than $5,500 can be Subsidized)

Example: $12,500 Unsubsidized

Fourth Year and above (90+ credits)

$12,500 (no more than $5,500 can be Subsidized)

Example: $5,500 Subsidized and $7,000 Unsubsidized

Graduate Students

Annual maximum—Unsubsidized Loan only: $20,500 (for loans disbursed after July 1, 2012)

Additional loan money for Graduate students could be applied for through a Graduate PLUS Loan.

Aggregate Federal Subsidized & Unsubsidized Stafford Loan Limits

Dependent, Undergraduate Students
  • $23,000 Aggregate Maximum Subsidized
  • $31,000 Annual Maximum Subsidized and/or Unsubsidized
    • Example: $23,000 Subsidized and $8,000 Unsubsidized would total to $31,000
Independent, Undergraduate Students & Dependent Undergraduate Students whose parents are denied the Federal PLUS Loan
  • $23,000 Annual Maximum Subsidized
  • $57,500 Annual Maximum Subsidized and/or Unsubsidized
    • Example: $23,000 Subsidized and $34,500 Unsubsidized would total to $57,500
Graduate Students
  • $65,500 Annual Maximum Subsidized
  • $138,500 Annual Maximum Subsidized and/or Unsubsidized
    • Example: $65,500 Subsidized and $73,000 Unsubsidized would total to $138,500

Federal Direct Parent PLUS Loan

A PLUS loan is meant to assist families in covering costs beyond any student financial aid. PLUS Loans are borrowed through the Department of Education and assigned to a loan servicer.

Important Information

  • 2019-20 Direct PLUS loan for Parents and Graduate Students interest rate: 7.08%

How to Apply

  1. File a Free Application for Federal Student Aid (FAFSA)
  2. The parent must log-in and apply on studentloans.gov or complete a Direct PLUS Loan Application with Purchase College’s financial aid office.
  • Remember that the parent is the borrower and student is the student.
  • When logging into studentloans.gov, the parent must “Apply for a Direct PLUS Loan.” A credit decision is immediate.
  • If approved, complete the Master Promissory Note (MPN) on the same site.
  • If denied, three options are available:
    • Request a credit appeal.
    • Provide an endorser.
    • Not pursue the PLUS Loan: The student may use additional Direct Unsubsidized Loan. Additional Unsubsidized Stafford loan funding is available up to $4,000/academic year for first and second year students (59 or less credit hours earned); and up to $5,000/academic year for third and fourth year students (60 or more credit hours earned).

Federal Direct PLUS for Graduate Students

A Graduate PLUS loan is only available for graduate students working toward their master’s or other professional degree. Unsubsidized Direct Loan should be used first.

Important Information

  • 2019-2020 Interest Rate is 7.08%

How to Apply

  1. File a Free Application for Federal Student Aid (FAFSA)
  2. Graduate students must log-in and apply on studentloans.gov
  3. Select the option “Apply for a Direct PLUS Loan.”
  • A credit decision is immediate.
  • If approved, complete the Master Promissory Note and Entrance Counseling on the same site.
    • Select the MPN and Entrance Counseling option for the Graduate PLUS Loan.
    • If denied, two options are available:
      • Request a credit appeal.
      • Provide an endorser.

Federal Perkins Loans (Program is Cancelled)

Important: the Federal Perkins Loan Program has been cancelled by the federal government as of July 1, 2018.

Perkins is a low-interest federal student loan program. Funds are limited and not guaranteed from year to year. The loan is awarded through Purchase and the loan servicer is the Student Loan Servicing Center (SLSC).

  • The interest rate is fixed at 5.0 percent.
  • Must have financial need.
  • No origination fee.
  • Repayment begins nine months after leaving school.

Private Loans

Most experts believe that federal student loans are better than private education loan in terms of repayment options and interest rates. Purchase College’s policy is that it will not certify a private loan that is greater than a student’s Cost of Attendance. Student Financial Services at Purchase College does not steer or influence students in regards to private loan lenders and cannot give out suggested lenders.

Private loans are education credit based loans that are offered by several financial lending institutions. Not everyone will credit qualify for these loans. Private loans are designed to finance your remaining cost of attendance after all other sources of federal aid are exhausted.

Purchase College strongly encourages you to complete your Free Application for Federal Student Aid (FAFSA) in order to receive the Federal Direct Loans. Qualified Federal Direct borrowers can receive Federal Direct loans regardless of need.

Shortly after receipt of your FAFSA form, you will receive an email instructing you to view your award letter which itemizes your financial aid eligibility. If you still feel that it is necessary to borrow a private loan once your financial aid package is awarded to you, research any financial lending institution of your choice to cover your remaining educational expenses.

Also, when deciding upon how much to borrow, practice smart borrowing techniques and only borrow those funds that you need. A refund from your private loan may be nice up front, but could be very costly down the road!

Lastly, if possible, have a cosigner (parent, grandparent, aunt, uncle, etc.) apply for the loan with you. Often lenders require the use of cosigners, and it can be very cost effective for the primary borrower to use a cosigner as interest rates will most likely be drastically reduced.

View a detailed comparison of alternative loans and federal student loans.

Private Loan Disclosures

In accordance with the Truth in Lending Act (TILA), financial lending institutions are required to provide students with three loan disclosures. Each disclosure informs the borrower of specific information regarding the loan.

  1. Application Disclosure: the Application Disclosure is generally presented to the borrower along with the loan application. If the disclosure is not provided with the initial loan application, the lender will be required to mail an Application Disclosure to the borrower within three days after an application is received.

    The Application Disclosure contains pertinent information about:

    • the range of rates
    • fees
    • other terms that apply
    • total cost of the loan
    • federal student loan options

    Please be aware the Application Disclosure must be accepted and signed by the borrower and cosigner in order to proceed through the application process.

  2. Approval Disclosure: the Approval Disclosure is provided to the borrower electronically or by mail when the lender has conditionally approved or approved the borrower for a loan.

    The borrower and cosigner will receive the Approval Disclosure as part of the application process before the promissory note is signed. The Approval Disclosure must be accepted by both the borrower and cosigner within 30 calendar days of the credit offer. The Approval Disclosure must state the acceptance date deadline and the manner in which the lender requires the borrower to accept the terms of the loan. If any permissible changes (i.e. changes made to accommodate a borrower request) are made to the loan, a new disclosure and 30 day acceptance period is required to accept new terms.

    Remember that the Approval Disclosure must be accepted and signed by the borrower and cosigner (if applicable) prior to continuation of the application process.

  3. Final Disclosure: the Final Disclosure is presented to the borrower after the loan terms have been accepted. A three day recession period occurs after the Final Disclosure is presented to the borrower.

    The Final Disclosure will note the borrowers’ right to cancel the loan, state the deadline for cancellation, and the methods in which a lender accepts a cancellation request.

    Lastly, the Final Disclosure provides the borrower with the final information on the cost of their loan.