Important News
- Mid-Year Fee Increase Approved
- Letter from President Yudof About Proposed Fee Increases
- 2010-2011 Continuing Undergrad Scholarship Application Online
- Perkins Loan Terms & Conditions Addendum 10/1/09
- Help During Tough Economic Times
- Special Circumstance Review
- Blue & Gold Opportunity Plan at UC Davis
- Paying for UC--Financial Aid Advice on YouTube
- Financial Aid Notice for Veterans
- Join the Financial Aid Student Advisory Committee
- Navigating the Financial Aid Web Site
Federal Perkins Loan
Federal Perkins Loans are currently at a 5% interest rate (subject to change). Loans may be limited to a percentage of student's need because of demand and limited funds. Interest does not accrue on the loan until repayment begins. Repayment begins nine months after graduation or withdrawal from school and may be extended over ten years. Additional deferments are possible for temporary total disability or volunteer service in a private, non-profit organization, VISTA or the Peace Corps, and effective July 1, 2001, for a period not to exceed three years during which the borrower is serving on active duty during a war or other military operation or national emergency, or performing qualifying National Guard duty during a war or other military operation or national emergency. Some teachers of students from low-income families and full-time teachers of handicapped children may also qualify for partial loan cancellation.
The Federal Perkins Loan Master Promissory Note (MPN) has been updated to reflect changes to the terms and conditions of Perkins Loans that were made by recent legislation. If you have accepted a Perkins Loan and signed the Master Promissory Note (MPN) before October 1, 2009, please read and retain the Perkins Addendum summarizing the changes to the loan terms and conditions.
To receive the loan the student must first accept the loan through MyAwards, then submit a signed, completed Federal Perkins Loan Promissory Note, Interim Truth-in-Lending, Acceptance of Loan Obligation Form, and Loan/Borrower Information Form to the Financial Aid Office. The Federal Perkins Promissory Note, Loan Obligation Form, and Loan/Borrower Information forms can be printed from MyAwards.
The Federal Direct Loan Program
UC Davis offers loans through the William D. Ford Federal Direct Loan Program. When the Financial Aid Office receives your FAFSA from the federal processor, we will usually award one or more of the following federal direct loans according to your eligibility:
- Federal Direct (subsidized) Loan
- Federal Direct (unsubsidized) Loan
- Federal Direct PLUS (Parent Loan for Undergraduate Students)
Current interest rates and information about the Direct Loan Program are available online at the Direct Loan Servicer web site at www.dl.ed.gov.
Loan Fees and Repayment Requirements
As a borrower, you will be charged a loan fee when you borrow Federal Direct Stafford Loans. The fee is 1.5%, which is deducted proportionately from each disbursement of your loan. Every educational loan you receive will require that you sign a Promissory Note, in which you will agree to the interest rate and repayment requirements required for the loan.
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.
Federal Direct (Subsidized) Loan
Federal Direct (Subsidized) Loans are based on financial need and have a fixed interest rate of 5.6% (only for undergraduates, and disbursed between 7/1/09 and 6/30/10). Subsidized means that the interest is paid by the federal government while the student is in school. Repayment begins six months after graduation or withdrawal from school.
To receive a Federal Direct Loan students accept the loan offered through MyAwards and sign the Master Promissory Note online at dlenote.ed.gov. Students have the option to borrow less Direct Loan by indicating the amount they would like to borrow before accepting the loan. The minimum amount of Direct Loan a student can borrow is $200. For maximum loan amounts, see the Direct Loan Program Maximums chart.
Federal Direct (Unsubsidized) Loan
Federal Direct (Unsubsidized) Loans are not based on financial need. Interest of 6.8% is charged beginning the day the loan is disbursed until the loan is repaid in full. Students may pay the interest while they are in school, during the grace period, or during deferment, or they may capitalize the interest (by adding it to the total principal of the loan after graduation).
To receive a Federal Direct Unsubsidized Loan students accept the loan offered through MyAwards and sign the Master Promissory Note online at dlenote.ed.gov. Students have the option to borrow less Unsubsidized Loan by indicating the amount they would like to borrow before accepting the loan. For maximum loan amounts, see the Direct Loan Program Maximums chart.
Federal Direct PLUS (Parent Loans for Undergraduate Students)
Federal Direct PLUS is a government-insured loan made to parents of dependent students. The interest rate is fixed at 7.9% and is adjusted each year on July 1. The loan fee is 4%. Parents may borrow up to the cost of education minus other financial aid received by the student during the years the dependent student is an undergraduate.
To receive a Federal Direct PLUS loan:
- Students accept PLUS loan offered through MyAwards
- The parents and student must complete the UC Davis Direct PLUS Loan Request form, which is available online through MyAwards.
- In addition, the parents must sign the Master Promissory Note at dlenote.ed.gov.
After receiving the PLUS Loan Request Form, UC Davis transmits the information to the federal loan servicer who then performs a credit check to determine the parent's eligibility for the loan. Once the loan is approved, the UC Davis Financial Aid Office is notified and the loan is processed. The servicer sends the parent borrower the results of the credit check, a loan disclosure statement, and repayment information. Repayment begins 60 days after the final disbursement for every academic year.
If the servicer denies the loan, the borrower is notified of the reason for denial and the Financial Aid Office will stop the Direct PLUS process. Parents who are denied a PLUS loan will need to work with the servicer if they wish to pursue the loan further. Parents who decide to reapply with an eligible endorser (cosigner) begin the process again and will need to sign a new promissory note online and submit another Direct Loan PLUS form.
Estimated Direct Loan Repayment Amounts by Type of Repayment Plan and Debt Amounts
The Master Promissory Note
The Federal Direct Loan program features a Master Promissory Note, which allows a student to receive multiple Direct Loans under one Promissory Note while enrolled at UC Davis. Entering students will be asked to sign a Promissory Note online at dlenote.ed.gov. If necessary, a paper Promissory Note is available upon request from the Financial Aid Office.
Entrance and Exit Loan Counseling Required
UC Davis and the Department of Education want to ensure that students understand their rights and responsibilities as borrowers. Students are required to receive loan counseling before they receive a loan. Federal regulations require that all first-time borrowers attend entrance loan counseling before funds are disbursed. Entrance Loan counseling is available online at financialaid.ucdavis.edu/entrance.
Students who are approaching graduation, and before leaving school, are required to attend Exit Loan counseling to assess their loan indebtedness and to receive a repayment schedule.