Federal Direct Loans

Federal SUBSIDIZED Direct Loan

This is a federally supported loan made to students who demonstrate financial need. Occidental students may borrow based on their need, year in school, and satisfactory academic progress. 

When a student is enrolled at least half-time, there is no repayment of interest or principal required. Over a four-year period beginning July 1, 2008, the interest rate on Federal Direct Loans made to undergraduate students was reduced. The applicable interest rates for loans made during this period are as follows:

 

Payment begins at a minimum of $50 per month, six months after graduation. Your actual repayment is determined by the total amount borrowed and interest accrued. In general, there is a maximum of 10 years to repay the loan. The maximum amount you can borrow is reflected on your Financial Aid Award Letter. If you have any questions regarding your eligibility, please contact the Financial Aid Office. 

The federal government charges an origination fee of up to 1% when the loans are issued. Therefore, a student borrowing $3,500 will receive 1% less, disbursed in two installments, one in the fall and one in the spring.

The Budget Control Act of 2011 eliminates the interest subsidy for Federal Direct/Stafford loans made to graduate and professional students for periods of enrollment beginning on or after July 1, 2012.

Federal UNSUBSIDIZED Direct Loan

This is available for students who do not demonstrate financial need. While the terms of the loan are similar to those noted above, interest accrual is immediate. Students may choose to pay interest while in school or have it capitalized onto the principal balance. If you have any questions regarding your eligibility, please contact the Financial Aid Office.

As of July 1, 2006 the interest rate is fixed at 6.8%.

Federal Direct Loan Limits

Annual and grade level limits in the Federal Direct Loan program (subsidized and unsubsidized) are as follows:

School Year	Yearly Maximum Subsidized	Yearly Maximum Unsubsidized
Freshman	$3,500	$2,000
Sophomore	$4,500	$2,000
Junior	$5,500	$2,000
Senior	$5,500	$2,000
5th Year Senior	$5,500	$2,000
Graduate Student	$8,500	$12,000

                                             

 

Maximum aggregate borrowing in the Federal Direct Loan program (subsidized and unsubsidized):

Status	Amount
Dependent Undergraduates	$31,000
Dependent Undergraduates whose parents are ineligible for PLUS	$57,500
Independent Students	$57,500
Graduate Students	$138,500

 

These loan limits apply to the Direct Loan programs only. A student may borrow more than these amounts in any one year (if eligible) and may accumulate more than the aggregates shown by borrowing in different loan programs. These loans are for educational purposes only.