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Federal Loan Information

Federal Direct Subsidized Stafford Loan

Federal Direct Subsidized Stafford loans are awarded to students who demonstrated financial need as determined by the information provided on the FAFSA. Students who meet the need criteria may borrow up to $4,250 per semester/$8,500 per academic year. The Federal government pays the interest on the loan while the student is enrolled at least half-time. Federal Direct Stafford loans have a fixed interest rate of 6.8%. No interest accrues when students are in school at least half-time, during grace and deferment periods. Repayment begins six (6) months after the borrower graduates or is no longer enrolled at least half-time. Federal law requires both entrance and exit counseling for the Federal Direct Stafford loan, and students complete loan counseling on-line when they apply for the loan. Federal Direct Stafford Loan funds will not disburse to the student account until entrance counseling is complete.
***Graduate/Professional Students are no longer eligible for Subsidized Loans for loan periods beginning on or after 07/01/2012 

Federal Direct Unsubsidized Stafford Loan

Federal Direct unsubsidized Stafford loans are awarded based on a student's cost of attendance. Through this program, a student may borrow up to $6,000 per semester/$12,000 per academic year. The fixed interest rate is the same as the subsidized Federal Direct Stafford loan; however, the unsubsidized interest begins to accrue immediately upon disbursement. The interest begins to accrue with the first disbursement of the loan. The student has the option of paying the interest quarterly or allowing it to accrue while in school at least half-time. Repayment begins six (6) months after the borrower graduates or is no longer enrolled at least half-time. Federal law requires students to complete entrance and exit counseling, and students complete on-line loan counseling when they apply for the Federal Direct unsubsidized Stafford loan. Federal Direct unsubsidized Stafford Loan funds will not disburse to the student account until entrance counseling is complete.
***Graduate/Professional Students with loan periods beginning on or after 07/01/2012 will be eligible for $10,250 per semester

Federal Direct Graduate PLUS Loan

The Federal Direct Graduate PLUS loan is a federal loan designed to assist graduate and professional students who are United States citizens or eligible non-citizens with the costs of pursuing their education. Students may borrow the amount equal to the Cost of Attendance less all other financial aid. The Federal Direct Graduate PLUS loan has a fixed interest rate of 7.9%, and repayment beginning 60 days after the last installment of the loan for the loan period. Students that are enrolled at least half-time are eligible for in-school deferment on the principal balance of the loan. There is no grace period for the Graduate PLUS loan, so students are expected to begin repayment as soon as the deferment ends. The Federal Direct Graduate PLUS loan is credit based; the government does not factor debt-to-income ratio, and only looks at your credit score. The Federal Direct Graduate PLUS loan has the same repayment, deferment, forbearance, and cancellation provisions as the Federal Direct Stafford loan program.

Federal Direct Stafford Loan Repayment Options

Students will most likely begin repayment of their Federal loans once they leave school, drop below half-time enrollment, or their grace period has ended. At this time, the loan servicer will inform you of your repayment options for the Federal Stafford loan. The monthly payment amounts can vary depending on how much was borrowed, the interest rate of the loans, and other factors. During the Federal Stafford loan grace period, students will have the opportunity to choose one of the repayment plans listed below.

Standard or Level Plan: This is the most common and least expensive payment option where students have fixed monthly payments of at least $50 for a 10 year period. If your monthly payments exceed 10% of your gross monthly income, you should consider one of the other repayment options.
Graduated Plan: This option allows students the flexibility of having payments start out low, and increase over time. Generally, this is evaluated every two years. The option is good if you have limited income, and expect higher earnings over the 10 year repayment period.

Income-Based Plan: Monthly payments are based on your income and your total loan amount over a period of 10 years. Payments can be adjusted annually to account for changes in your income. The repayment period of 10 years may be extended to 15 years under a special forbearance provision. Students should discuss the 15 year forbearance option with their loan servicer.

Extended Fixed or Extended Graduated Plan: Monthly payments are fixed or graduated over a period of up to 25 years. Extended repayment plans are available only to new Direct Loan Borrowers on or after October 7, 1998, who currently have an outstanding Direct Loan balance of more than $30,000. You may choose to make payments using the level or graduated repayment schedule. The total interest costs are greater for the 25 year loan period versus the 10 year loan period.

Income Contingent Plan: This option allows the monthly payment to be adjusted each year based on the annual income (including your spouse’s income if married), your family size, and the total amount of your Direct loans. After 25 years, any unpaid loan amount will be forgiven. This plan is currently available only to Direct Subsidized or Unsubsidized Loan borrowers. Beginning July 1, 2009, this plan also will be available to student Direct PLUS Loan borrowers.

Federal Direct Loan Consolidation: This allows you to combine multiple federal education loans into a single Direct Consolidation Loan which may allow students to extend the repayment period. Students should note that while extending the repayment period, they may pay more interest over the life of the Direct Consolidation Loan. The interest rate for a Direct Consolidation Loan is based on a weighted average of the loans being consolidated. Depending on your total loan balance, you may be able to lower your monthly payments. For additional information regarding Direct Loan Consolidation contact the Direct Loan Consolidation Center at 1-800-557-7392.

For more information, you can log onto www.studentloans.gov and search under Managing Repayment

Federal Direct Stafford Loan Sample Repayment Chart

(based on the standard ten year repayment plan at 6.8% fixed interest rate. )

Amount Borrowed
$20,000
$23,000
$25,000
$31,000
$40,000
$50,000
$57,500
$75,000
$100,000
$125,000
$138,000
Estimated Monthly Payment
$230
$265
$288
$357
$460
$575
$662
$863
$1,151
$1,439
$1,588

Federal Direct Graduate PLUS Loan Sample Repayment Chart

(based on the standard ten year repayment plan at 7.9% fixed interest rate.)

Amount Borrowed
$20,000
$25,000
$30,000
$40,000
$50,000
Estimated Monthly Payment
$242
$302
$362
$483
$604


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