FINANCIAL AID
Federal Loans
Loans are aid resources that, unlike grants, must be repaid with interest. Students at The University of Alabama apply to be considered for Federal Direct Loans, which includes the Federal Direct Parent Loan for Undergraduate Students (PLUS Loan), and the Federal Perkins Loan.
The Federal Direct Loans are classified as either subsidized or unsubsidized. For subsidized loans, the government does not charge interest while the recipient is in school, for and six months after graduation, and during any period of deferment or forbearance. Eligibility for subsidized loans is dependent on financial need. Unsubsidized loans are available to students that do not demonstrate financial need. The government does not pay interest on these loans while the recipient is in school. However, recipients have the option of paying the interest accrued while in school. The current interest rate on Direct Loans is fixed at 6.8% for amounts dispersed after July 1, 2006
The maximum amounts of Federal Loans a student can receive are as follows:
|
Dependent Undergraduate Student |
Independent |
Graduate or Professional Student |
1st Year |
$3,500 |
$6,625: No more than $2,625 of this amount may be in subsidized loans. |
$20,500 for each year of study—No more than $8,500 of the annual amount may be in subsidized loans. |
2nd Year |
$4,500 |
$7,500: No more than $3,500 of this amount may be in subsidized loans. |
|
3rd and 4th Years (each) |
5,500 |
10,500: No more than $5,500 of this amount may be in subsidized loans. |
|
Maximum Total Debt Allowed |
$27,000 |
$46,000: No more than $23,000 of this amount may be in subsidized loans. |
$138,500—No more than $65,500 of this amount may be in subsidized loans. The graduate debt limit includes Stafford Loans received for undergraduate study. |
The Perkins Loan is awarded to undergraduate and graduate students with exceptional financial need. This is a campus-based loan program, with the school acting as the lender using a limited pool of funds provided by the federal government. It is a subsidized loan, with the interest being paid by the federal government during the in-school and 9-month grace periods. There are no origination or guarantee fees, and the interest rate is 5%. There is a 10-year repayment period.
For more information regarding these loans, feel free to contact The University of Alabama Financial Aid Office in 106 Student Services Center.
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