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Federal Financial Aid

Veterinary schools require specific educational and financial requirements, like other healthcare programs.

Even with state-provided financial aid, private loans, and scholarships, it’s likely that you or your family will have to apply for federal aid. Mark Kantrowitz, publisher of FinAid.org and Fastweb.com, explains your federal loan options.

By Mark Kantrowitz, publisher, FinAid.org and Fastweb.com

The federal education loans include the Perkins Loan, Stafford Loan, PLUS Loan and Consolidation Loan.

The Perkins Loan is a low-interest loan available from some but not all colleges. The interest rate is 5% and the government pays the interest while you are in school and during a 9-month grace period after you graduate. Eligibility for the Perkins loan is based on financial need.

The Stafford Loan comes in two versions, subsidized and unsubsidized.In the subsidized loan, the government pays the interest on the loan while you are in school and during the 6-month grace period after graduation.In the unsubsidized loan, you are responsible for the interest but you can defer repaying it until after the end of the grace period by capitalizing it.
The interest rate on the unsubsidized Stafford loan is 6.8% for undergraduate and graduate students (though it may be lower for undergraduate students).

The subsidized Stafford loan is based on financial need. The unsubsidized Stafford loan does not depend on financial need, so even wealthy students can get it. The loan limits depend on several factors, discussed below.

The PLUS Loan is available to parents of dependent undergraduate students (Parent PLUS loan) and to graduate and professional students (Grad PLUS loan). The interest rate is 7.9%. The PLUS loan does not depend on financial need, so anyone can get it.This loan has an annual loan limit equal to the cost of attendance minus any other aid received. There is no cumulative loan limit.
The PLUS loan requires that you have a good credit history over the last five years: no bankruptcy, default, tax liens, wage garnishment, foreclosure and repossession, or a current delinquency of 90 or more days on any debt. If your parent is denied a Parent PLUS loan, you become eligible for the higher unsubsidized Stafford loan limits available to independent students.

The Federal Consolidation Loan lets you combine several federal education loans into a single loan and provides access to alternate repayment plans. The interest rate is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest 1/8th of a point, and capped at 8.25%.

Are you a dependent?

The loan limits on the Stafford loan depend on year in school and dependency status. Are you dependent or independent?

The most common criteria for independent status include:

Age. Are you 24 or older as of December 31 of the award year?
Marital status. Independent status is granted to married students.
Dependents. Do you have dependents of your own, other than a spouse?
Student type. Are you a graduate or professional student?
Military service. Are you a veteran or active duty member of the Armed Forces?

Independent students can borrow up to $9,500 in unsubsidized Stafford loans as a college freshman, $10,500 as a sophomore, $12,500 as a junior and $12,500 as a senior. There is also an cumulative borrowing limit of $57,500.

Dependent students can borrow up to $5,500 in unsubsidized Stafford loans as a college freshman, $6,500 as a sophomore, $7,500 as a junior and $7,500 as a senior. There is also an cumulative borrowing limit of $31,000.

The subsidized Stafford loans are limited to $3,500 for college freshmen, $4,500 for sophomores, $5,500 for juniors and $5,500 for seniors, with an cumulative limit of $23,000. Any amounts received as a subsidized Stafford loan are subtracted from the corresponding unsubsidized Stafford loan limits. (Graduate and professional students can borrow up to $20,500 a year, no more than $8,500 of which can be subsidized.)

How to Apply

All federal education loans are now made through the Direct Loan program.

To apply for these loans, contact the financial aid office at your college. After you tell the college how much you wish to borrow (up to the annual and cumulative loan limits), they will ask you to sign a Master Promissory Note (MPN). You will have to sign the MPN only once per college, as it is valid for all your federal education loans while you are enrolled.