Federal Student Loans
Student loans are financial aid funds that you must repay with interest. Loans are a helpful way to finance your college experience. However, please remember that you will be responsible for these at some point after graduation or if you become enrolled for less than 6 credits at Pace University at any time.
Important Things to Know About Federal Student Loans
- All student loans are subject to annual maximum amounts, and the student must be the applicant/borrower.
- For detailed information about your federal student loan borrowing history including contact information for your Stafford Loan servicer, visit the National Student Loan Data System (NSLDS).
General Eligibility for Federal Financial Aid Programs
- Must file a Free Application for Federal Student Aid (FAFSA) each year.
- Must be admitted as a matriculated student in a degree or certificate program at Pace University.
- Must be enrolled in at least 6 credits per semester (except for Pell Grants).
- Must be making Satisfactory Academic Progress towards a degree.
- Must be a U.S. citizen or eligible non-citizen (permanent residents, certain refugees)
- Must be registered for the Selective Service (only applicable to males aged 18 and older)
- Must not be in default of a federal student loan.
- Must not owe a repayment on a federal student grant.
- Must have and provide a valid Social Security Number.
- Combination of federal aid and all other aid received may not exceed the Cost of Attendance.
|Direct Stafford Loans||Direct Stafford Unsubsidized Loan|
|Direct Parent Plus Loan||Direct Graduate Plus Loan|
Pace University is committed to student-centered loan processing. The University has participated in the Direct Loan program in which loans are provided directly from the federal government to students since the 1994-1995 school year. Pace Financial Aid staff certify and transmit all federal loans directly to the Common Origination and Disbursement Center of the Department of Education.
With regard to private/alternative (non-federal) educational loans, Pace Financial Aid staff will certify any loan of the student’s choice. We do not endorse any particular lender. Neither do we participate in any of the following practices with lenders:
- Revenue-sharing arrangements with any lender
- Receiving gifts from a lender, a guarantor, or a loan servicer
- Contracting arrangement providing financial benefit from any lender or affiliate of a lender
- Directing borrowers to particular lenders, or refusing or delaying loan certifications
- Offers of funds for private loans
- Call center or financial aid office staffing assistance
- Advisory board compensation
Federal Direct Stafford Loans (Subsidized & Unsubsidized)
Undergraduate students are eligible for both subsidized and unsubsidized Federal Direct Stafford loans. These are federally sponsored, low-interest student loans with more flexible repayment options.
Subsidized loan recipients pay no interest during the period of enrollment and for a six-month grace period after the last day of their final semester or termination of half-time study. (Note: Congress has temporarily eliminated the interest subsidy provided on Direct Subsidized Loans during the six month grace period effective for new Direct Stafford Loans for which the first disbursement is made on or after July 1, 2012, and before July 1, 2014.)
Undergraduate students who have been accepted to a degree or certificate program and demonstrate financial need may qualify for a Subsidized loan of up to $3,500 for the freshman year (up to 31 credits earned), $4,500 for the sophomore year (32 to 63 credits earned), and $5,500 for junior and senior years (64 or more credits earned).
Undergraduate students who do not show financial need may receive an Unsubsidized Direct Stafford Loan for the same amounts in addition to their standard Unsubsidized loan of $2,000. Interest accrues on the Unsubsidized loan as soon as the loan is disbursed.
Independent undergraduates or Dependent undergraduates whose parents have been denied a Federal Direct PLUS Loan (see below) may borrow an additional Unsubsidized Direct Stafford Loan of $4,000 per year as a freshman or sophomore and $5,000 per year as a junior or senior.
Interest begins accruing on Unsubsidized Stafford loans as soon as the loan is disbursed. We strongly recommend that the student try to make interest payments on these loans while in school to avoid having the interest added to the principle of the loan after leaving school.
All applicants, regardless of income level, are required to file the Free Application for Federal Student Aid (FAFSA). The Financial Aid Office will calculate the student's eligibility for Federal Direct Stafford Loans and include them on the Financial Aid Award Notice. Once the student accepts a Federal Direct Stafford Loan, the Financial Aid Office will originate the loan with the federal government's Common Origination and Disbursement Center beginning approximately June 1st and on a daily basis thereafter.
- The student will then need to sign the Master Promissory Note (MPN) for the Direct Stafford Loan at www.studentloans.gov (if the student has not previously borrowed a Direct Loan and signed an MPN).
- First time borrowers must also complete Loan Entrance Counseling before the loan funds can be disbursed to their college accounts. This requirement can also be satisfied online at www.studentloans.gov.
To qualify for a Federal Direct Stafford Loan, students must meet all of the general eligibility requirements listed above on this page.
Students are currently charged an origination fee that is assessed on the face value of each loan borrowed. This fee is deducted prior to disbursement of funds. Repayment of the principal on these loans begins six months after graduation or after the student ceases to be enrolled for at least 6 credits per semester. The minimum monthly installment is generally $50 including interest. The interest rate for new Subsidized and Unsubsidized Direct Stafford loans first disbursed on or after July 1, 2016, is a fixed rate. The standard repayment period is 10 years, but students may extend repayment under the Consolidation Loan Program or by selecting the Graduated, Extended, Income-Based, Pay as you Earn, or Income-Contingent repayment plan. The aggregate borrowing limit for undergraduate study is $31,000 for Dependent students and $57,500 for Independent students. Of those aggregate amounts, up to $23,000 may be borrowed in the form of a Subsidized Stafford Loan.
Repayment of the whole or part of the loan may be made in advance at any time without an interest penalty. Borrowers may defer repayment for up to three years while the student serves in the Armed Forces, Peace Corps, or as a full-time volunteer in VISTA.
Learn more about Direct Stafford loans.
Federal Direct Parent Loan for Undergraduate Students (PLUS)
The parents of a dependent student may borrow up to the full Cost of Attendance minus other financial aid, for each academic year for a child matriculated into to a degree or certificate program. Parent loans have a fixed interest rate of 7%. Loan repayment begins within 60 days after disbursement. However, parents may request a deferment (from the federal Loan Origination Center) until six months after the student graduates or ceases to be enrolled in at least 6 credits. The standard repayment period is 10 years, however alternate repayment options are available. All borrowers are required to pay an origination fee. Currently the loan origination fee is 4.264% and is deducted from the face value of each loan borrowed.
Parents (biological or adoptive) or step-parents (currently married to the parent) of dependent matriculated students may borrow through this program. The student must be enrolled at least half time (6 credits per semester) and must maintain Satisfactory Academic Progress. The parent/ step-parent must have a positive credit history. Both the parent/step-parent and the student must be U.S. citizens or eligible non-citizens. Neither the parent/step-parent nor the student may be in default of a federal student loan or owe a repayment on a federal grant. The student must have filed a Free Application for Federal Student Aid (FAFSA) for the parent to be eligible to for a PLUS loan.
The Financial Aid Office includes its “Parent Loans For Students (Plus) - Request For Federal Direct Plus Loan And Consent To Obtain Credit Report” form with Award Letters and has them available in the offices. Parents who wish to borrow a PLUS loan must complete this form and submit it to the Financial Aid Office. Upon receipt of this form, the Financial Aid Office will originate the loan with the federal government’s Common Origination and Disbursement Center beginning approximately June 1st and on a daily basis thereafter. If credit-approved, the parent must sign a Master Promissory Note (MPN) if not previously completed. The MPN can be signed online at www.studentloans.gov. There is no ‘Need” requirement for this loan. The parent/step-parent may borrow up to the cost of attendance per student minus financial aid available to the student. Funds are disbursed twice during the loan period. However, PLUS loans cannot be used to replace the student’s eligibility for the Stafford Loan, so it is generally to the family’s advantage to have the student borrow the lower interest rate Stafford Loan. Parents must reapply each year if they want a PLUS loan.
As with all student loans, Parent Loans for Undergraduate Students are to be used exclusively for educational expenses.
Federal Direct Stafford Unsubsidized Loans (Rules Specific to Graduate Students)
Graduate students may borrow Federal Direct Unsubsidized Stafford loans while they complete their program of study. Interest accumulates on unsubsidized loans while the student is attending college. Students should pay this interest while they are in school. Students may receive unsubsidized loans regardless of financial need.
Graduate students may borrow a maximum of $20,500 per academic year in unsubsidized loans. Students are given up to or more than 10 years to pay back all loans.
For more information about interest rates and Stafford loans, visit FAFSA's Federal Stafford Loans website.
Federal Direct Graduate Plus Loan (Graduate Students only)
Full or part-time graduate students can borrow money equal to their cost of attendance minus other estimated financial assistance.
Applicants must demonstrate that they do not have adverse credit history. There is no limit to the amount of money a student can receive – students may borrow (up to the cost of attendance) minus any funds covered by existing financial aid.
The first payment on a Direct PLUS Loan is due within 60 days after the loan is fully dispersed. Students may, however, postpone payments on the loan while they are in school. Fill out a FAFSA (Free Application for Federal Student Aid) to apply.
Also complete the Graduate PLUS Application provided by the Office of Financial Aid.
A Graduate PLUS Loan application is mailed along with the annual award notice. More information about this loan can be found on the Direct PLUS Loans for Graduate Students website.