Before You Borrow: Information for Graduate Students

Important News

Know the Types of Loans You Are Borrowing

During the course of your years at school, you may borrow a combination of different types of loans. It's important to know what type of loan you are borrowing and who your lender is. Stafford Loans, Federal Direct Loans, University Student Loans, Federal Perkins Loans are all separate loan programs that may require separate, simultaneous loan payments to different lenders upon graduation.

The award page in SISWeb will show the types of loans you are being offered. Loan must be repaid after graduation or withdrawal from school, and some loans require payment while you are still in school. We encourage you to think carefully about your future loan indebtedness before accepting loans. You are not obligated to accept any loan offered to you, and you can decline the aid offered by checking the decline box on the award page.

Keep Track of Your Federal Student Loans

The National Direct Student Loan Data System (NSLDS) Student Access web site allows students and parents to track and manage their federal student loans and/or grants. This site displays information about your loan and/or grant amounts, outstanding balances, loan status, and loan amounts that you receive. You will need the Personal Identification Number (PIN) you used when applying for financial aid online, to access your information.

Know the Difference Between a Subsidized Loan and an Unsubsidized Loan

Subsidized means that the interest is on the loan is paid by the government while you are still in school and during the grace period until you begin repaying the loan. Unsubsidized means that the interest is not paid by the government while you are still in school, but that you are required to pay the interest while you are still in school and during the grace period. You can ask for the interest to be deferred while you are still in school, which is called capitalization.

Capitalization allows you to defer interest that accrues while you're in school. This option postpones your interest payment, but cost you more over the life of the loan.

Learn About Loan Fees

You will be charged a loan fee when you borrower Federal Direct Loans. The loan fee is deducted proportionately from each disbursement of your loan. Loan fees are as follows:

Federal Direct Subsidized and Unsubsidized Loan - 1.5%
Federal Direct Parent Loan for Undergraduate Students (PLUS) - 4%
Federal Direct Graduate Plus Loan - 4.0%
Requesting Additional Loan

If you have remaining eligibility for Unsubsidized Direct Loan, you may request that this loan be awarded to meet all or a portion of your expected student contribution. Contact the Graduate Financial Aid Office to request additional loan.

Canceling Your Loans

At any time before the loan money is disbursed or after it has disbursed a student can decline all or part of the loan money by notifying the UC Davis Financial Aid Office in writing. The student's name, I.D. number, and the amount of loan money they wish to return should be included on the letter/statement. The letter should be sent to Financial Aid Office, UC Davis, One Shields Avenue, Davis, CA 95616-8596.

Know the Terms of Your Grace Period

The grace period is the amount of time you have after you graduate, withdraw, or drop below half-time, before you are required to begin repaying your loan. The grace period depends on the terms of the loan you are borrowing. Be sure to read the Promissory Note for the loan you are accepting so that you are aware of the grace period for that particular loan. The grace periods for the following federal loan programs are:

Federal Direct Subsidized and Unsubsidized Loans - six months
Perkins Loan - nine months
Federal Direct Graduate Plus Loan - no grace period. The borrower will be given an in-school deferment and a possible six-month forbearance to align with Direct Subsidized and Unsubsidized loans.

Protect Your Credit, Repay Your Loans

After you graduate, leave school, or drop below half-time enrollment and your grace period has expired, you must begin repaying your loans. When you receive a student loan it becomes part of your credit file. Repaying your loan according to the agreed schedule may give you a head start when you apply for more credit in the future. If for any reason you are having difficulty repaying your loan, contact your lender right away and see what arrangements can be made. For information aobut Direct Loan deferments, forbearance, or forgiveness options after graduation, visit the Direct Loan Borrower Services web site. For information about deferments and other repayment options for the Perkins Loan Program, contact the Student Accounting Office at UC Davis.

Repayment Options Available Through Direct Loan Borrower Services

You have a variety of repayment options. If you do not select a plan, your loans will automatically be placed in the Standard Repayment Plan. Choose a repayment plan that's right for you:

Standard Plan -You pay a fixed amount each month until your loans are paid in full. Your monthly payments will be at least $50, and you'll have up to 10 years to repay.
Extended Plan -You will have minimum monthly payments of $50, but you can take from 12 to 30 years to repay your loans, depending on the amount you owe.
Graduated Plan -Your payments start out low, then increase, generally every two years. The length of your repayment period will be from 12 to 30 years and will depend on the total amount you owe.
Income Contingent Plan (ICR) -Your payments are based on your ability to pay each year, your monthly payments will be calculated on the basis of your annual income, certain other factors, and the total amount of your Direct Loans. Borrowers who choose the ICR have up to 25 years to repay their loans.
Income-Based Repayment Plan: This new program (as of July 1, 2009) sets monthly payments based on adjusted gross income and family size. Unpaid principal and interest is generally added to your loan amount. Any debt remaining is wiped out after 25 years - or after 10 years if you work in the public or nonprofit sector.

Estimated Direct Loan Repayment Amounts

FSA (Federal Student Aid) Loan Ombudsman

The FSA Ombudsman works with student loan borrowers to informally resolve loan disputes and problems. Their goal is to facilitate and provide creative options/alternatives for borrowers needing assistance with loan disputes with any of the following loan programs: Subsidized and Unsubsidized Federal Direct Student Loans, Direct PLUS Loans (for parents), and Direct Consolidation Loans; Federal Family Education Loans—Subsidized and Unsubsidized Stafford Loans, FFEL PLUS Loans (for parents), and FFEL Consolidation Loans; Guaranteed Student Loans, SLS Loans; and Perkins Loans.