Federal Perkins Loans. Federal Perkins Loans are available to students who are enrolled in a minimum of 6 credits per term, who are citizens or permanent residents of the United States, and who demonstrate need through the FAFSA. 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. It extends over a maximum repayment period of 10 years. Monthly payments of at least $40 are required. Deferral 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 at Rutgers are required to attend an entrance interview to learn about their rights and responsibilities regarding the loan. In addition, Federal Perkins Loan recipients must attend an exit interview before graduation or upon withdrawal from 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 to students 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 awarded to students 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 set by the U.S. Department of Education,
provide evidence of U.S. citizenship or be an eligible noncitizen,
be enrolled at least half time per term and be making satisfactory academic progress,
have a valid social security number,
sign a statement of educational purpose,
not be in default on prior loans or owe refunds to a federal grant program, and
register with the U.S. Selective Service, if required.

In addition to these requirements, all first-time Federal Direct Loan borrowers must attend an entrance interview in order to learn about 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 variable interest rate is adjusted each year. Effective July 1, 2001, the maximum rate for the Federal Direct Loan was 5.99 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. This 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 having a financial emergency may apply for a university loan of as much as $300 (up to $500 in an extreme case). The simple interest rate is 3 percent. An emergency need must be demonstrated and funds must be 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 need not be recipients of financial aid or have filed a financial aid application to be considered for these loans.

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