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, 2004, the rate for the Federal Direct Loan was 3.37 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.

Federal Perkins Loan. This loan is also 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 on a half-time basis per term. Repayment extends over a maximum of ten 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.

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.

Federal Direct and Perkins Loan recipients must also attend an exit interview before graduation or upon withdrawal from school.

William D. Ford Federal Direct Student Loan. 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 loan 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).

NJCLASS Loan. The NJCLASS, initiated by the state of New Jersey and administered by the New Jersey Higher Education Student Assistance Authority (NJ HESAA), 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 application. Students must also complete the financial aid application procedure to determine the student's eligibility for Federal Direct Student Loans and must accept loan funds from that program before applying for NJCLASS funds. The interest rate may be either fixed or variable. For more information about NJCLASS, call the NJ HESAA Financial Aid Hotline at 1-800-792-8670.

Emergency Loan. Students experiencing a financial emergency may apply for a university loan of as much as $500. A simple interest rate of 3 percent is charged. Loans are awarded as long as funds are available. The applicant must demonstrate an emergency need and indicate a source of repayment. Contact the Office of Financial Aid for additional information.

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