Interest will be charged on the amount you borrow. Federal loans available through the UCR Financial Aid Office have interest rates ranging from 5% to 7.9%. The federal government pays the interest on subsidized loans while you are enrolled at least half-time. You are responsible for the interest on unsubsidized loans while you are enrolled.

Loan Repayment.

UCR students have overwhelmingly found that they can manage to repay their student loans upon graduation. However, you should carefully monitor the total amount you borrow and the repayment requirements that you will have when you finish your education. All new borrowers at UCR must complete online pre-loan counseling in which loan responsibilities and repayment terms are addressed. Pre-loan counseling is available online. Sample Direct Loan repayment schedules are available online at the U.S. Department of Education's Direct Loan web site. Borrowers can choose from a variety of repayment plans to fit their financial circumstances and can change plans if those circumstances change. Information regarding deferment provisions and repayment options is available at the Student Business Services loan counseling web site as well as on the Department of Education's Direct Loan web site. Provisions for loan deferment or cancellation are also contained on the loan promissory note you will submit, and will also be provided to you online via the Student Business Services Office loan exit interview required when you leave UCR.

Federal Direct Subsidized Stafford Loans.

Loans from this program are awarded to students with financial need. This loan is "subsidized" because the federal government pays the interest while the student is in school and during the grace period (the first six months after leaving school or dropping to less than half-time enrollment status). The maximum amount that may be borrowed is based on dependency status and grade level according to the annual and aggregate loan limits established by Congress. Click here for information on loan limits.

The interest rate on Direct Subsidized Loans, for new loans disbursed on or after July 1, 2007, will be a fixed rate of 6.8%. A federal loan origination fee of 1.5% is deducted from the amount of the loan prior to disbursement.

Over a four year period, beginning July 1, 2008, the College Cost Reduction and Access Act will reduce the interest rates on Direct Subsidized Stafford Loans made to undergraduate students annually. The rates for loans borrowed during this time are as follows:

Federal Direct Unsubsidized Stafford Loans.

The Direct Unsubsidized Loan is not based on financial need and is available to all eligible students, regardless of income. A FAFSA application is required to apply for this loan. This loan is "unsubsidized" because the student is responsible for paying all interest due; there is no federal interest subsidy for the loan. The terms and conditions for Direct Unsubsidized Loans are otherwise the same as for Direct Subsidized Loans. Interest accrues immediately upon disbursement of the loan to the student. The interest rate on Direct Unsubsidized Loans, for new loans disbursed on or after July 1, 2007, will be a fixed rate of 6.8%. Borrowers may elect to pay accrued interest on a monthly or quarterly basis, but most students elect to have it added back to the principal balance in a process called capitalization. The interest is then added in to the total amount borrowed and is not paid until the loan repayment period begins, six months after graduation or withdrawal from the University. The minimum monthly repayment amount is $50.

The maximum amount that may be borrowed is based on dependency status and grade level according to the annual and aggregate loan limits established by Congress. Click here for information on loan limits. Students' eligibility for Subsidized Loans is computed before Unsubsidized Loans are awarded. Applicants may receive both types of loan, but the total may not exceed the loan limits. Borrowers who have both types of loans may have a single repayment schedule.

Federal Direct PLUS Loan Program

Parent Loan.

A parent may borrow up to the annual cost of education minus any estimated financial aid received by the student, regardless of financial need. To determine the maximum amount you may qualify to receive, subtract the Total Financial Aid shown on the Financial Aid Award from the Total Cost of Attendance.

A FAFSA application is required for this loan. This loan has a fixed interest rate of 7.9%, for new loans disbursed on or after July 1, 2007. A federal loan origination fee of 2.5% is deducted from the amount of the loan prior to disbursement. New parent borrowers awarded the PLUS loan will be instructed to complete a UCR PLUS Loan Request form online, then a separate online loan promissory note. The application approval process includes a standard credit check for all parent borrowers.

Interest begins accruing on the PLUS loan after the first disbursement. The first payment of principal and interest is due within 60 days after the final loan disbursement for the year is made. For more information on PLUS Loans, click here.


Grad PLUS.

Effective July 1, 2006, graduate students may borrow a federal Grad PLUS Loan for up to the annual cost of education minus any estimated financial aid received. A FAFSA application is required. The interest rate and terms of the Grad PLUS loan are the same as the Federal Direct PLUS Loan for parents (above), with a fixed interest rate of 7.9%. A federal loan origination fee of 2.5% is deducted from the amount of the loan prior to disbursement. Interest begins accruing on the PLUS loan after the first disbursement. However, repayment for graduate students can be deferred while the student is enrolled at least half-time. The online loan promissory note will provide more details on loan deferment and cancellation provisions (see “Loan Repayment”, above).

Federal Perkins Loans.

Undergraduate students may be awarded up to $4,000 annually, for an undergraduate aggregate maximum of $20,000. Actual award amounts may be less based on annual funding levels and UCR’s institutional awarding policy. Simple interest of 5% per year on the unpaid principal balance begins six months after graduation or withdrawal from UCR. New borrowers must complete a pre-loan counseling session online as a requirement for disbursement of the loan. Borrowers may be eligible to postpone (or defer) repayment under certain circumstances. Full or partial loan cancellation may be available for full-time employment in selected public service jobs and/or for permanent and total disability. The deferment and cancellation provisions for this loan are contained on the loan promissory note which will be sent to borrowers.

University Loans.

A very limited number of these loans are available to undergraduate students for up to $5,500 annually. The University Loan requires one or more cosigners who must be employed full-time and who must be U.S. citizens or permanent residents. Cosigners may not be the student's spouse or other students. Simple interest of 5% per year on the unpaid principal balance begins six months after graduation or withdrawal from UCR.

Alternative Private Loans.

Private loans, sometimes called "Alternative" or "Outside Agency" loans, are funded through banks and other private lending institutions.

Since the Department of Education does not regulate private educational loans, their terms and conditions can vary widely. We only recommend you consider private loans if you need more money after taking the federal student loans for which you qualify. In general, federal loan terms are better than private loan terms.

Which lender is right for me?
How do I apply?
How will I receive my loan funds?