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Federal loans

Loans may be part of financial aid options 

Complete the FAFSA application, using Columbia College’s school code 002456 to have the results sent to Columbia College. Once your FAFSA is processed and eligibility is determined. you will be sent notification that details your financial aid package.

When you apply for financial aid, loans may be offered as part of your financial aid package. A loan is money you borrow and must pay back with interest. The U.S. Department of Education’s federal student loan program is the William D. Ford Federal Direct Loan (Stafford) Program. Under this program, the U.S. Department of Education is the lender. You may accept, accept in part, or deny offered loans. 

Understanding the Difference between Direct Subsidized Loans and Direct Unsubsidized Loans

Subsidized Stafford loan - A loan for which the government pays the interest while you are in school, during grace periods, and during any deferment periods.

Unsubsidized Stafford loan - A loan for which you are responsible for paying all of the interest that accrues from the date of the first disbursement until the loan is paid in full.

Direct PLUS Loans

Direct PLUS Loans may be available to eligible parents and graduate or professional students. A Direct PLUS Loan is commonly referred to as a parent PLUS Loan when made to a parent, or as a grad PLUS Loan when made to a graduate or professional student. Parents must not have an adverse credit history. A credit check will be conducted. If a parent is denied the loan during the credit check, additional federal loan eligibility may be made available in the student's name.

The maximum PLUS Loan amount you can receive is the cost of attendance (determined by the school) minus any other financial aid received.

The interest rate for Direct PLUS Loans first disbursed on or after July 1, 2019, and before July 1, 2020, the is 7.08%. This is a fixed interest rate for the life of the loan.

Loan Interest Rates and Calculating Interest

Interest is a loan expense charged for the use of borrowed money. Interest is paid by you, the borrower, to the U.S. Department of Education, the lender. The expense is calculated as a percentage of the unpaid principal amount of the loan.

Direct Loan Interest Rates
Interest rates for Direct Loans first disbursed on or after July 1, 2019, and before July 1, 2020.
Loan Type Borrower Type Fixed interest Rate (%)
Direct Subsidized and Direct Unsubsidized Loans Undergraduate 4.53
Direct Unsubsidized Loans Graduate 6.08
Direct PLUS Loans Parents and Graduate or Professional Students 7.08

Interest rates for Direct Loans first disbursed on or after July 1, 2019 and before July 1, 2020.

Calculating Interest & Interest Rate Factor

The amount of interest that accrues (accumulates) on the loan between monthly payments is determined by a daily interest formula. This formula consists of multiplying the loan balance by the number of days since the last payment was made and multiplying that result by the interest rate factor.

Simple daily interest formula:

Interest Amount = (Outstanding Principal Balance x Interest Rate Factor) x Number of Days Since Last Payment

The interest rate factor is used to calculate the amount of interest that accrues on the loan. It is determined by dividing the loan's interest rate by the number of days in the year.

Federal Direct Loan Fees

In addition to interest there is a loan fee applied to Direct PLUS loans. The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement. You’re responsible for repaying the entire amount you borrowed and not just the amount you received. The percentage varies depending on when the loan is first disbursed, as shown in the chart below.

Direct Loan Fees
Loans first disbursed prior to Oct. 1, 2018, have different loan fees.
Loan Type First Disbursement Date Loan Fee (%)
Direct Subsidized and Direct Unsubsidized Loans On or after 10/1/2019 and before 10/1/2020 1.059
On or after 10/1/2018 before 10/1/2019 1.062
Direct PLUS Loans On or after 10/1/2019 and before 10/1/2020 4.236
On or after 10/1/2018 before 10/1/2019 4.248

Direct Loan Limits

There are limits on the amount in subsidized and unsubsidized loans that you may be eligible to receive each academic year (annual loan limits) and the total amounts that you may borrow for undergraduate and graduate study (aggregate loan limits).

Loan Limits
Academic Year, grade level classification Credit Hours Dependent Students (except students whose parents are unable to obtain PLUS Loans) Independent Students (and dependent undergraduate students whose parents are unable to obtain PLUS Loans)
Freshman Undergraduate Annual Loan Limit 0- 29.9 $5,500

No more than $3,500 of this amount may be in subsidized loans

$9,500

No more than $3,500 of this amount may be in subsidized loans.

Sophomore Undergraduate Annual Loan Limit 30 – 59.9 $6,500
No more than $4,500 of this amount may be in subsidized loans.
$10,500
No more than $4,500 of this amount may be in subsidized loans.
Junior Undergraduate Annual Loan Limit 60-89.9 $7,500
No more than $5,500 of this amount may be in subsidized loans.
$12,500
No more than $5,500 of this amount may be in subsidized loans.
Senior Undergraduate Annual Loan Limit 90+ $7,500
No more than $5,500 of this amount may be in subsidized loans.
$12,500
No more than $5,500 of this amount may be in subsidized loans.
Graduate or Professional Students Annual Loan Limit N/A Not Applicable (all graduate and professional students are considered independent) $20,500 (unsubsidized only)
Subsidized and Unsubsidized Aggregate Loan Limit N/A $31,000
No more than $23,000 of this amount may be in subsidized loans.
$57,500 for undergraduates

No more than $23,000 of this amount may be in subsidized loans.

$138,500 for graduate or professional students

No more than $65,500 of this amount may be in subsidized loans. The graduate aggregate limit includes all federal loans received for undergraduate study.

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