An educational loan is a serious financial obligation and must be repaid. You should carefully consider the repayment obligation before you accept educational loans. Loans can be an invaluable resource for many students and their families in financing a college education. Students can postpone paying a portion of their educational costs until they complete their education or leave school. The repayment period on most loans can extend up to 10 years after graduation or leaving school.
Graduating with educational debt is a fairly common experience for students. At Caltech, however, the average educational indebtedness at graduation is significantly lower than the national average for students attending four-year private and public colleges.
The William D. Ford Federal Direct Loan Program
This program offers eligible students and parents the opportunity to borrow money directly from the federal government to help pay the cost of attendance at Caltech. The U.S. Department of Education makes loans, through Caltech, directly to students and/or parents. The Institute will use the loan(s) to pay your tuition/fees and other direct charges such as room and board, and give the student any remaining money for indirect costs. Students and/or parents make their repayments directly to the federal government.
Direct loans include
- The Federal Direct Stafford Loan Program;
- The Federal Direct Parent PLUS Loan Program;
- The Federal Direct Graduate PLUS Loan Program; and
- The Federal Direct Consolidation Loan Program.
Federal Direct Stafford Loan
There are two types of Federal Direct Stafford Loans: subsidized and unsubsidized. The federal government pays the interest on subsidized loans while the borrower is enrolled at least half-time and during authorized periods of deferment. The interest on unsubsidized loans begins to accrue immediately upon disbursement and is generally capitalized (added to the amount borrowed) when the borrower is no longer enrolled at least half-time.
Eligibility for subsidized Stafford Loans is based on financial need as demonstrated by the FAFSA. Students who do not demonstrate sufficient need or whose need is met may borrow unsubsidized Stafford Loans provided their total financial aid, including the Stafford Loan, does not exceed the total estimated cost of attendance.
Dependent undergraduate students (excluding students whose parents cannot borrow Parent PLUS loans) may borrow Stafford Loan amounts not to exceed an annual total of
- $5,500 for first-year students, with no more than $3,500 in subsidized Stafford;
- $6,500 for second-year students, with no more than $4,500 in subsidized Stafford; and
- $7,500 for third- and fourth-year students, with no more than $5,500 in subsidized Stafford.
Independent undergraduate students and dependent undergraduate students whose parents are unable to borrow Parent PLUS loans may borrow additional unsubsidized Stafford Loan amounts not to exceed an annual total of
- $9,500 for first-year students, with no more than $3,500 in subsidized Stafford;
- $10,500 for second-year students, with no more than $4,500 in subsidized Stafford; and
- $12,500 for third- and fourth-year students, with no more than $5,500 in subsidized Stafford.
Graduate students may borrow Stafford Loan unsubsidized amounts not to exceed an annual total of $20,500.
The maximum outstanding total subsidized and unsubsidized Stafford Loan debt is
- $31,000 for dependent undergraduate students, with no more than $23,000 in subsidized Stafford;
- $57,500 for independent undergraduate students (or for dependent undergraduate students whose parents do not qualify for PLUS loans), with no more than $23,000 of this aggregate amount in the form of subsidized loans; and
- $138,500 for graduate students (including loans for undergraduate study), with no more than $65,500 of this aggregate in the form of subsidized loans.
Stafford Loan interest rates
The interest rate on subsidized and unsubsidized Stafford Loans disbursed for enrollment periods that begin after July 1, 2022 is currently scheduled to be fixed at 4.99% for undergraduate students.
|Enrollment Periods Beginning Between||Interest Rates|
|July 1, 2022 - June 30, 2023||4.99%||4.99%|
|July 1, 2021 - June 30, 2022||3.73%||3.73%|
|July 1, 2020 - June 30, 2021||2.75%||2.75%|
|July 1, 2019 - June 30, 2020||4.53%||4.53%|
|July 1, 2018 - June 30, 2019||5.05%||5.05%|
|July 1, 2017 - June 30, 2018||4.45%||4.45%|
|July 1, 2016 - June 30, 2017||3.76%||3.76%|
|July 1, 2015 - June 30, 2016||4.29%||4.29%|
|July 1, 2014 - June 30, 2015||4.66%||4.66%|
|July 1, 2013 - June 30, 2014||3.86%||3.86%|
|July 1, 2011 - June 30, 2013||3.40%||6.80%|
|July 1, 2010 - June 30, 2011||4.50%||6.80%|
|July 1, 2009 - June 30, 2010||5.60%||6.80%|
|July 1, 2008 - June 30, 2009||6.00%||6.80%|
|Enrollment Periods Beginning Between||Interest Rates|
|July 1, 2022 – June 30, 2023||6.54%|
|July 1, 2021 – June 30, 2022||5.28%|
|July 1, 2020 – June 30, 2021||4.30%|
|July 1, 2019 – June 30, 2020||6.08%|
|July 1, 2018 – June 30, 2019||6.60%|
|July 1, 2017 – June 30, 2018||6.00%|
|July 1, 2016 - June 30, 2017||5.31%|
|July 1, 2015 - June 30, 2016||5.84%|
|July 1, 2014 - June 30, 2015||6.21%|
|July 1, 2013 - June 30, 2014||5.41%|
|July 1, 2006 - June 30, 2013||6.80%|
To offset the federal government’s cost of the program, the borrower must pay an up-front origination fee of the principal amount of the loan.
|First Disbursement Made||Loan Fee|
|October 1, 2022 – September 30, 2023||1.057%|
|October 1, 2020 – September 30, 2022||1.057%|
|October 1, 2019 – September 30, 2020||1.059%|
|October 1, 2018 – September 30, 2019||1.062%|
|October 1, 2017 – September 30, 2018||1.066%|
|October 1, 2016 – September 30, 2017||1.069%|
|October 1, 2015 – September 30, 2016||1.068%|
|October 1, 2014 – September 30, 2015||1.073%|
|December 1, 2013 – September 30, 2014||1.072%|
|July 1, 2013 – November 30, 2013||1.051%|
The maximum repayment period under this program is 10 years, not including authorized periods of deferment. Direct Stafford Loans have a six-month grace period that starts the day after the borrower graduates, leaves school, or drops below half-time enrollment. Repayment begins when the grace period ends. Deferments are available for new borrowers during at least half-time enrollment at an eligible institution; during periods of academic study in approved graduate fellowship or rehabilitation programs; and for periods of unemployment and economic hardship.
Applications for Federal Direct Stafford Loans are available on the Caltech Financial Aid Office website. Complete information on Stafford Loan deferments and repayment options is also available from the Financial Aid Office.