Skip to Content

Education Loans

Need help understanding the different loans that might be available to you? The frequently asked questions listed below should give you a good start.

Ready to apply? Visit the Apply for a 2013-14 loan page.

Federal Direct Student Loan

What is a Student Loan?
It’s a low-interest (6.8% or less) educational loan that you, the student, can apply for to help pay for college.

How much can I borrow?
Yearly amounts vary based on class level:
Freshmen (0-27 units): $5,500 (up to $3,500 of which may be Subsidized)
Sophomores (28-59 units): $6,500 (up to $4,500 of which may be Subsidized)
Juniors and seniors (60+ units): $7,500 (up to $5,500 of which may be Subsidized)

If you’re an independent student or your parents are denied the PLUS loan, you can take out an additional Unsubsidized loan (freshmen and sophomores, $4,000; juniors and seniors, $5,000). See your award letter for the specific amount for which you’re eligible.

What’s the difference between Subsidized and Unsubsidized?
Subsidized is just a big word which means you don’t need to worry about the interest on the loan while you are in school; the government actually pays it for you. Unsubsidized means you pay the interest on the loan while in school.

How is it determined whether a loan is Subsidized or Unsubsidized?
Several factors go into Subsidized eligibility, such as other aid, but basically it’s determined by the information on your FAFSA. Rest assured that APU will always offer you a Subsidized loan if you are eligible for one.

I don’t want to pay interest while in school. Can I capitalize the interest on my Unsubsidized Stafford loan?
You can, but it will cost you. See the example below (the example assumes a 10-year repayment term):

$3,500 loan; 6.8% interest; 4 years in school Capitalize Interest Interest Paid In School
Amount Borrowed $3,500 $3,500
Monthly Interest Payment (while in school) $0 $19.84
Interest to Capitalize $952 $0
Principal Balance at Repayment $4,452 $3,500
Estimated Monthly Payment (once in repayment) $50 $50
Total Payments $5,950 $5,302
Total Interest Paid $2,450 $1,802
Total Savings   $648

What do I have to do to remain eligible for a Student Loan?
You need to take at least six units per semester and maintain "satisfactory academic progress (SAP)," which basically means you need to pass most of the classes you take. Read more about SAP.

When will I get the money and when do I have to repay it?
Assuming your admissions file and financial aid file are complete, the funds generally apply to your student account during the first month of the semester. It could be later depending on when we receive your paperwork. The first half of the loan applies to the fall semester and the second half to the spring semester.

You’ll be required to begin repaying the loan six months after you drop below half-time enrollment (half-time is six units) or graduate from college.

Federal Direct PLUS Loan (parents)

What is a PLUS Loan?

It’s a low-interest (fixed 7.9%) educational loan that you, the parent, may apply for to help your dependent student pay for college.

How much can I borrow?
You can borrow any amount up to your student’s Cost Of Attendance (COA) minus any other aid he or she is receiving. The COA is a general budget, which factors in typical student costs (tuition, fees, room, board, books, miscellaneous expenses, etc.)

For example, if the COA is $38,000 and your student’s grants, scholarships, and loans equal $18,000, then the total you could apply for would be $20,000.

What happens if I apply for the PLUS loan and am denied?
The PLUS loan, unlike the student’s Stafford loan, is based on credit-worthiness. If you apply for a PLUS loan and are denied, your student is then eligible to take out an additional Unsubsidized Stafford loan ($4,000/year for freshmen and sophomores; $5,000/year for juniors and seniors).

How does the PLUS loan compare to alternative loans?
The main advantage of the Direct PLUS loan is the interest rate. It is fixed at 7.9%. The common interest rate on an alternative loan can range anywhere from 9-15% or higher! And it’s variable!

What does the student have to do to remain eligible for a PLUS Loan?
They need to take at least six units per semester and maintain “satisfactory academic progress (SAP),” which basically means they need to pass most of the classes they take. Read more about SAP.

When will I get the money and when do I have to repay it?
Assuming your student’s admissions file and financial aid file are complete, the funds generally apply to your student’s account during the first month of the semester. It could be later depending on when we receive his or her paperwork. The first half of the loan applies to the fall semester and the second half to the spring semester.

You’ll usually be required to begin repaying the loan 60 days after the loan has been fully disbursed (for most students, this means after the second disbursement in early January). In some cases, payment can be delayed by deferment or forbearance. See studentloans.gov for more information.

Federal Perkins Loan (student)

What is a Perkins Loan?
It’s a low-interest (5.0%) educational loan that you, the student, can apply for to help pay for college. You don’t have to pay interest on the loan while in school; the government pays it for you.

Who is eligible?
Only students of very limited means (as determined by the FAFSA) are eligible. Funding for this loan is restricted.

How much can I borrow?
You may borrow a maximum of $3,000 per year. Please refer to your award letter for the exact amount for which you qualify.

What do I have to do to remain eligible for a Perkins Loan?
You need to take at least six units per semester and maintain "satisfactory academic progress (SAP)," which basically means you need to pass most of the classes you take. Read more about SAP.

When will I get the money and when do I have to repay it?
Assuming your admissions file and financial aid file are complete, the funds generally apply to your student account during the first month of the semester. It could be later depending on when we receive your paperwork. The first half of the loan applies to the fall semester and the second half to the spring semester.

You’ll be required to begin repaying the loan nine months after you drop below half-time enrollment (half-time is six units) or graduate from college.