Loans for Graduate Students

To be considered for need-based federal, state, and university loan funds, graduate students must complete and submit the FAFSA. Unsubsidized loans and alternative loans, which are not based on need, are available for students who don't qualify for need-based financial aid. UC Davis has chosen to participate in the William D. Ford Direct Loan Program. Under this program, the loan funds come directly from the U.S. government. We are unable to process Federal Family Educational Loan (FFEL) Program applications offered through banks or other lending institutions.

If you are offered a loan, you'll be notifed by an e-mail or postcard to visit the electronic Financial Aid Notice (eFAN) Web site to review your awards and instructed how to accept, decline, or reduce the amount.

Federal Direct (subsidized) Loans
UC Davis offers loans through the William D. Ford Federal Direct Loan Program. When the Financial Aid Office receives your FAFSA from the federal processor, we will usually award one or more of the following federal direct loans according to your eligibility:

Federal Direct (subsidized) Loan
Federal Direct (unsubsidized) Loan
Current Interest Rates as of July 1, 2008. Interest rates and information about the Direct Loan Program are also available online at the Direct Loan Servicer Web site at www.dlssonline.com.

Federal Direct (subsidized) Loans are based on financial need and have a variable interest rate that is adjusted annually, capped at 8.25%. Subsidized means that the interest is paid by the federal government while the student is in schoo1. Repayment begins six months after graduation or withdrawal from school.

You have the option to borrow less by changing the amount online through eFAN before accepting the loan. The minimum amount of Direct Loan offered is $200. For maximum loan amounts, see the Direct Loan Program Maximums chart.

Loan Fees and Repayment Requirements
As a borrower, you will be charged a loan fee when you borrow Federal Direct Stafford Loans. The fee is 2.5% (2% after July 1, 2008), which is deducted proportionately from each disbursement of your loan. After you graduate, leave school, or drop below half-time enrollment, you have a six-month (grace period) before you begin repayment. During the grace period on an unsubsidized loan, you don't have to pay any principal, but interest will be charged. You can either pay the interest or allow it to accumulate. Every educational loan you receive will require that you sign a Promissory Note, in which you will agree to the interest rate and repayment requirements required for the loan.

The Master Promissory Note
Federal Direct Loans and Graduate Plus loans require a Master Promissory Note, which allows a student to receive multiple Direct Loans under one Promissory Note while enrolled at UC Davis. Entering students or first-time borrowers will be asked to sign a Promissory Note online at dlenote.ed.gov. If necessary, students can request a paper Promissory Note from the Financial Aid Office.

Federal Direct (unsubsidized) Loans
Federal Direct Unsubsidized Loans are not based on financial need. Interest is charged beginning the day the loan is disbursed until the loan is repaid in full. Students may pay the interest while they are in school, during the grace period, or during deferment, or they may capitalize the interest (by adding it to the total principal of the loan).

Again, you have the option to borrow less by changing the amount online through eFAN before accepting the loan. For maximum loan amounts, see the Direct Loan Program Maximums chart.

To receive a Federal Direct subsidized or unsubsidized Loan you would need to accept the loan through our electronic Financial Aid Notice (eFAN), and sign the Master Promissory Note online at dlenote.ed.gov.

Graduate Plus Loans
Students who need to borrow funds beyond the federal subsidized, unsubsidized, and Perkins loan limits will now be able to choose between the new federal Grad Plus Loan and Private Loans. The Grad Plus Loan is provided by the William D. Ford Direct Loan Program because UC Davis is a Direct Loan institution for federal student loans. Students in Teaching Credential programs are not eligible for Graduate Plus loans.

The Direct Grad Plus being offered at UC Davis has a fixed interest rate of 7.9%, no annual or aggregate borrowing limits (other than cost of attendance less other financial aid received). While credit checks are required to be eligible for the Grad Plus, the credit criteria are less strict than those associated with private student loans. Furthermore, if you do not meet the credit requirements for a Grad Plus, you may still obtain the loan with an endorser who does meet the credit requirements. All Federal Graduate Plus Loans have a 2.5% origination fee deducted from the loan amount.

The Loan Comparison Chart is designed to help you to consider the significant variables when choosing between the Grad Plus Loan and Alternative Loans. An Alternative Loan may be less expensive depending on your credit score and whether the variable interest rate will increase before you complete repaying the loan.

Direct Plus Loan Request & Credit Authorization Form: Print, complete, and submit it to the Graduate Financial Aid Office. Students in the Schools of Law and Medicine can obtain the form from their respective Financial Aid Office web sites.

Alternative Loans for Graduate Students
Alternative loans, also known as private loans, are obtained through outside lending institutions. They can help a student pay for college expenses that may not be covered by Federal Title IV loans or other financial aid. Alternative loans can assist in filling the 'gap' between what a student receives from all funding sources and what the student's need is.

The Graduate Unit can assist in determining the student's eligibility for loan. The federal government does NOT guarantee the alternative loan so the student must be credit-worthy or secure a credit-worthy cosigner to be eligible.

For more information and an application, visit the Alternative Loans Web page.

Federal Perkins Loan
Federal Perkins Loans are currently at a 5% interest rate (subject to change). Perkins Loans may be limited to a percentage of student's need, their respective programs, or because of demand and limited funds. Repayment begins nine months after graduation or withdrawal from school and may be extended over ten years. Additional deferments are possible for temporary total disability or volunteer service in a private, non-profit organization, VISTA or the Peace Corps. Effective July 1, 2001, for a period not to exceed three years students serving on active duty during a war or other military operation or national emergency, or performing qualifying National Guard duty during a war or other military operation or national emergency. Some teachers of students from low-income families and full-time teachers of handicapped children may also qualify for partial loan cancellation.

If you are offered a Federal Perkins Loan, you'll be asked to complete and submit a Promissory Note, Truth-in-Lending form, Acceptance of Loan Obligation form, and Loan/Borrower Information form to the Financial Aid Office before the loan is disbursed.

Entrance and Exit Loan Counseling Required
Federal regulations require that all first-time borrowers receive entrance loan counseling before funds are disbursed. Entrance Loan Counseling is available online through the Financial Aid Office, or through the Direct Loan Servicer website.

Students who are approaching graduation, and before leaving school, are required to attend Exit Loan counseling to assess their loan indebtedness and to receive a repayment schedule. Student Accounting will provide Exit Loan counseling for your Federal Perkins and University Loans. For Exit Loan Counseling for your Direct Loans, visit the Direct Loan Servicer website.

Federal Student Loan Ombudsman
The Federal Student Aid Ombudsman of the Department of Education helps resolve disputes and solve other problems with federal student loans.

Short-Term, Emergency, and Assistant Loans
If you are experiencing a temporary shortage of funds, the Financial Aid Office administers the UC Davis Short-Term, Emergency, and Assistant Loan Program for all students. These loans are available only to regularly enrolled UC Davis students or new students who have enrolled in classes. The funds may be used for educational purposes only.

To apply, read and complete the application before the loan application review. Assistant and Short-Term Loan review for graduate students takes place Mondays, Wednesdays, Thursdays, and Fridays: 8:30-9:30 a.m.; Tuesdays 11:00 a.m.-12:00 noon.