Loans

Federal Perkins Loan.  This loan is based on need. Annual awards vary according to fund availability but cannot, by federal regulation, exceed $6,000. Federal regu­lation limits the maximum aggregate loan amount for graduate and professional students to $40,000, including National Direct Student and Perkins Loans borrowed as an undergraduate student.

Interest at the rate of 5 percent begins nine months after the borrower ceases to enroll in a minimum of 6 credits per term. Repayment extends over a maximum of 10 years. Monthly payments of at least $40 are required. Deferment of repayment is permitted for certain kinds of federal ser­vice, and cancellation of loans is permitted for certain public-service positions.

All first-time Federal Perkins Loan borrowers are required to attend an entrance interview to learn about their rights and responsibilities regarding the loan. They must also attend an exit interview before graduation or upon withdrawal from the school.

Details and procedures regarding the repayment of the Federal Perkins Loan are sent to each student recipient by Rutgers, The State University of New Jersey; Office of Student Loans; Division of Student Accounting, Billing, Cashiering, and Collections; 65 Davidson Road, Piscataway, NJ 08854-8094.

William D. Ford Federal Direct Loans.  Federal Direct Student Loans (Direct Loans) are available for students directly from the federal government to pay for educational costs. These loans eliminate the need for an outside lender, such as a bank. To be considered for a Direct Loan, students must complete the FAFSA. Subsequently, the award letter issued by Rutgers will list eligibility for the program. Money for which students are eligible will be credited directly to their accounts. Because Rutgers has chosen to participate in direct lending, the university cannot accept any Federal Stafford applications from students or their lenders. Since the U.S. Department of Education is the lender for the Federal Direct Loan Program, borrowers will send all loan repayments to the department, rather than to several lenders.

In general, to be eligible for a Direct Loan, a student must have a high school diploma or a General Education Development (GED) certificate or meet other standards approved by the U.S. Department of Education, be a U.S. citizen or an eligible noncitizen, be enrolled at least half time per term, be making satisfactory academic progress, have a social security number, not be in default on prior loans or owe refunds to a federal grant program, and register with the U.S. Selective Service Administration, if required.

In addition to these requirements, all first time Direct Loan borrowers must attend an entrance interview in order to learn of their rights and responsibilities regarding the loan.

The aggregate limit for Federal Direct Loans, including both subsidized and unsubsidized amounts is $138,500 for a graduate or professional student (including loans for undergraduate study).

Federal Direct Subsidized Loan.  This loan is based on financial need. The government pays the interest on the loan while the student is attending school. The interest rate is variable; that is, it is adjusted each year. Effective July 1, 2003, the rate for the Federal Direct Loan was 3.42 percent. Additionally, borrowers are charged an origination fee of 1.5 percent. Graduate students may borrow $8,500 per year. The total debt may not exceed $65,500, including loans for undergraduate years.

Federal Direct Unsubsidized Loan.  The loan is not based on financial need, and all interest charges must be paid by the student. The interest rate is the same as that of the Federal Direct Subsidized Loan. Students may borrow as much as $18,500 per year, less any amount from the subsidized loan program. The total debt permitted for all subsidized and unsubsidized Direct Loans is $138,500.

Emergency Loans.  Students who are experiencing a financial emergency may apply for a university loan for up to $500. An emergency need must be demonstrated and a source of repayment must be indicated. The interest rate is 3 percent and is awarded as long as funds are available.

Students should contact their local financial aid office for additional information. If loans in excess of this amount are required, an appointment with a counselor is recommended. Students do not need to be recipients of financial aid or have filed a financial aid application to be considered for these loans.

NJCLASS Loans. The NJCLASS, initiated by the state of New Jersey and administered by the New Jersey Higher Education Assistance Authority (NJHEAA), is a program that makes loans available to students regardless of income level. Students must be permanent New Jersey residents classified as citizens or eligible noncitizens of the United States for at least six months prior to filing the NJCLASS Loan application. Students also must complete the  financial aid application procedure to determine the student`s eligibility for Federal Direct Loans, and must accept loan funds from these programs before applying for NJCLASS Loan funds. The interest rate may be fixed or variable. For more information about NJCLASS, call the NJHEAA Financial Aid Hotline at 800/792-8670.

Note: Quoted interest rates may change at any time. Subse­quent program regulations may change the terms of eligi­bility and repayment.