Student Loans - Step Into the Loan Zone


Federal Student Loan Facts

  1. You don’t have to accept the full amount of the loans offered to you. Make a budget of your costs for the year, then determine how much you’ll need to borrow in loans. Take out as little as possible to cover your expenses, you can always revise the amount you accept later if you need more (up to the full amount offered).
  2. You can start paying back your loans any time! If you are still in deferment, you aren’t required to pay anything, even if you start to make occasional payments. So use your PFD’s! Use your tax returns! It will save you a lot of money in the long run. Pay your unsubsidized loan interest every month if you can!

  3. Set up an account with your loan servicer now. Loan services are very important. Don’t know your loan servicer? You can also look on the National Student Loan Data System or to find out. The NSLDS Student Portal will show your loan history, status and interest information.

  4. Once you enter repayment status, you have several payment plans to choose from! If you don’t choose a plan, you will be placed in the 10-year standard plan. But, you may be eligible for others. Talk to your loan servicer once you move into repayment status.

Types of Student Loans Offered at UAA

  • Direct Subsidized Loans

    Based on financial need, the federal government pays the interest that accrues while the borrower is in an in-school or deferment status. (Interest accruing during your grace period depends on when your loan was dispersed - check with your loan servicer for more info on your specific loan(s) and grace period interest accrual). A credit check is not required. If offered, borrow these loans FIRST, as you pay much less interest over the course of the loan.

  • Direct Unsubsidized Loans

    The borrower is fully responsible for paying the interest, regardless of the loan status. Interest on unsubsidized loans accrues from the date of disbursement and continues throughout the life of the loan. Financial need is not required. A credit check is not required.

  • Direct PLUS Loans

    Made to graduate or professional students, and parents of dependent undergraduate students. The borrower is fully responsible for paying the interest regardless of the loan status and interest accrues from day one of the loan. Financial need is not required. A credit check is required for the borrower. Interest rates are generally higher than subsidized or unsubsidized federal direct loans.

Federal Student Loan Limits

Dependent Students
(except students with parents unable to obtain PLUS Loans)
Independent Students
(and dependent undergraduate students with parents unable to obtain PLUS Loans)

First-Year Undergraduate Annual Loan Limit

No more than $3,500 in subsidized loans.

No more than $3,500 in subsidized loans.

Second-Year Undergraduate Annual Loan Limit

No more than $4,500 in subsidized loans.

No more than $4,500 in subsidized loans.

Third-Year and Beyond Undergrad Annual Loan Limit

No more than $5,500 in subsidized loans.

No more than $5,500 in subsidized loans.

Graduate or Professional Annual Loan Limit


(unsubsidized only)

Subsidized and Unsubsidized Aggregate Loan Limit

No more than $23,000 in subsidized loans.

$57,500 for undergraduates
No more than $23,000 in subsidized loans.

Repayment Information

Who Is Your Loan Servicer?

Knowing your loan servicer is very important, as this is to whom you will be making all your loan payments.  You should set up an account with them online as soon as your loan is disbursed and make sure they always have your correct contact information.  They can help you with many things, including any changing regulations, so you want to be sure they can get in touch with you.  You can find out who your loan servicer is, your loan status, and loan history at the National Student Loan Data System (NSLDS) or .

Do the following in order to make payments on your federal student loans:
  1. Log into NSLDS student portal using your FSA ID to find out who your loan servicer is and bookmark their website. The NSLDS - Student Portal will show you your loan history, loan status and interest information.
  2. Once you know who your loan servicer is and their website. Set up an account with them. You will be able to make payments directly to the loan servicer, even if you are still in an "in-school deferment" status.

Paying Interest While in School

If you had a $5,500 Federal Direct Unsubsidized Loan at 3.76% interest, how much could you save by just paying the interest every month while you’re in school so it does not capitalize and get added on to your principal?

Total Interest
Over 10 Years
If You Don't Pay Interest During School $5,500 $2,204 $64
If You Do Pay Interest During School $5,500 $1,091 $55
You Could Save   $1,113 $9/month!

That's only for one year's worth of loans! Imagine if you borrow loans every year, how much you could save in interest costs by just paying a little every month!   In this example, paying your interest monthly would be about $25 or less every month - not bad, right?

Important Loan Terms

  • Aggregate Loan Limit: The maximum amount you can borrow in Federal Student Loan money over your lifetime.
  • Capitalization of Interest: The addition of unpaid interest to the principal balance of a loan. When the interest is not paid as it accrues during periods of in-school status, the grace period, deferment, or forbearance, your lender may capitalize the interest. This increases the outstanding principal amount due on the loan and may cause your monthly payment amount to increase. Interest is then charged on that higher principal balance, increasing the overall cost of the loan.
  • Default: Failure to repay a loan according to the terms agreed to in the promissory note. For most federal student loans, you will default if you have not made a payment in more than 270 days. You may experience serious legal consequences if you default.
  • Deferment: A postponement of payment on a loan that is allowed under certain conditions and during which interest does not accrue on Direct Subsidized Loans, Subsidized Federal Stafford Loans, and Federal Perkins Loans. All other federal student loans that are deferred will continue to accrue interest. Any unpaid interest that accrued during the deferment period may be added to the principal balance (capitalized) of the loan(s).
  • Delinquent: A loan is delinquent when loan payments are not received by the due dates. A loan remains delinquent until the borrower makes up the missed payment(s) through payment, deferment, or forbearance. If the borrower is unable to make payments, he or she should contact his or her loan servicer to discuss options to keep the loan in good standing.
  • Direct Loan: A federal student loan, for which eligible students and parents borrow directly from the U.S. Department of Education at participating schools. Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans and Direct Consolidation Loans are types of Direct Loans.
  • Federal Student Loan: A student loan funded by the federal government to help pay for your education. A federal student loan is borrowed money you must repay with interest.
  • Financial Need: The difference between the cost of attendance (COA) at a school and your Expected Family Contribution (EFC). Your EFC is determined by your completed FAFSA. While COA varies from school to school, your EFC does not change based on the school you attend.
  • Forbearance: A period during which your monthly loan payments are temporarily suspended or reduced. Your lender may grant you a forbearance if you are willing but unable to make loan payments due to certain types of financial hardships. During forbearance, principal payments are postponed but interest continues to accrue. Unpaid interest that accrues during the forbearance will be added to the principal balance (capitalized) of your loan(s), increasing the total amount you owe.
  • Grace Period: A period of time after borrowers graduate, leave school, or drop below half-time enrollment where they are not required to make payments on certain federal student loans. Some federal student loans will accrue interest during the grace period, and if the interest is unpaid, it will be added to the principal balance of the loan when the repayment period begins.
  • Interest: The cost to borrow money. The expense is calculated as a percentage of the unpaid principal amount of the loan.
  • Lender: The organization that made the loan initially; in the case of Federal Student Loans, the lender is the U.S. Department of Education.
  • Loan Fee: A fee charged for each student loan you receive that is a percentage of the total loan amount you are borrowing (gross amount). The loan fee is deducted proportionately from each disbursement of your loan. This reduces the actual loan amount you receive (net amount).
  • Loan Servicer: A company that collects payments, responds to customer service inquiries, and performs other administrative tasks associated with maintaining a federal or alternative student loan on behalf of a lender. You send  payments directly to the loan servicer when repaying your student loans, that's why it is critical to know the name of your loan servicer and make sure they have your current address and phone number. Failure to remain in contact can result in accidental delinquency and default status, along with collection penalties and fees.
  • Principal: The total sum of money borrowed plus any interest that has been capitalized.
  • Promissory Note: The binding legal document that you must sign when you get a federal student loan. It lists the terms and conditions under which you agree to repay the loan and explains your rights and responsibilities as a borrower. It’s important to read and save this document because you’ll need to refer to it later when you begin repaying your loan or at other times when you need information about provisions of the loan, such as deferments or forbearances.