bulbYou’ll need to know some basic loan terminology before you can begin to fully understand your student loan repayment terms.  Once you review these terms, you’ll see the general loan guidelines and repayment details listed in summary form below.  You should always refer to your promissory note and to your lender’s web site for the most accurate borrower specific information.

Direct Stafford Loans (Subsidized and Unsubsidized):
The annual loan maximum is $20,500 in unsubsidized funding (up to $8,500 subsidized funding was available through the 2011-2012 academic year based on financial need)

  • For loans made on or after July 1, 2006 through June 30, 2013 the interest rate was fixed at 6.8%
  • For loans made on or after July 1, 2013 the rate is fixed annually.  The rate for 2013-2014 academic year loans was 5.41% and for 2014-15 6.21%
  • You have a six month grace period, with repayment beginning in the seventh month.
  • For the subsidized portion of this loan, interest does not accrue until 6 months after the last day of class which for May graduates is May 14, 2015 (Federal regulations state that your graduation date is the last day of class and not the actual date you receive your diploma.)
  • Interest accrues from the date of disbursement on the unsubsidized portion. You had the choice of paying interest as it accrued or not. If you paid interest on a regular basis, your loan amount at the time of repayment, will consist of the principal amount only. If you chose to defer payment of the interest while you were in school, and through your grace period, then the amount of money that accrued during your deferment period will be added to the principal amount for a new loan amount.
  • You have the option of paying all of the accrued interest prior to the end of your grace period in order to avoid paying interest on interest. Most students cannot pay the interest while they are in school and therefore, the interest that accrues during your enrollment will be capitalized once either at the time your separate from the University or at the time you end your grace period and enter repayment. Check with your lender to see when they capitalize the interest on your unsubsidized loan.

Direct Grad Plus Loans:
The annual loan maximum is your student budget minus any other aid.

  • GradPLUS loans are always unsubsidized and have a fixed interest rate.
  • For Loans borrowed prior to July 1, 2013 the interest rate is 7.9%
  • For loans made on or after July 1, 2013 the rate is fixed annually.  The rate for the 2013-14 academic year was 6.41% and for 2014-15 7.21%
  • Grad Plus loans taken out prior to 7/1/08 begin repayment 30 – 60 days after the last day of class, which for May graduates is May 14, 2015. GradPLUS loans taken out after 7/1/08 are eligible for a 6 month Post Enrollment Deferment from the last day of class. If you are unable to make payments immediately, you can apply for a deferment or forbearance through your lender.
  • Interest accrues from the date of disbursement on all GradPLUS loans. You had the choice of paying interest as it accrued or not. If you paid interest on a regular basis, your loan amount at the time of repayment, will consist of the principal amount only. If you chose to defer payment of the interest while you were in school, and through your grace period, then the amount of money that accrued during your deferment period will be added to the principal amount for a new loan amount.
  • You have the option of paying all of the accrued interest prior to the end of your grace period in order to avoid paying interest on interest. Most students cannot pay the interest while they are in school and therefore, the interest that accrues during your enrollment will be capitalized once either at the time your separate from the University or at the time you end your grace period and enter repayment. Check with your lender to see when they capitalize the interest on your unsubsidized loan.

The Department of Education has designated a servicer for both your Direct Stafford and GradPLUS loans.  To find out who your specific lender and servicer is, log in to the  National Student Loan Data System for specific address and phone contact information. You will receive a 0.25% interest rate reduction if you opt to make your payments electronically. Any Direct loan can be consolidated however your interest may be higher if you consolidate your loans through the government loan consolidation program.  You will want have a conversation with your lender regarding consolidation prior to completing any application.  You can also read more about consolidation at the Department of Education site. There are many different types of repayment options. If you do not choose a repayment option you will automatically be defaulted to the Standard Option. Students going into LIPP will want to remain in the Standard repayment option. You can view all of these repayment plans and use the calculators by going to  StudentLoans.gov.

  • Standard: Under the Standard Repayment Plan, each of your monthly payments will be at least $50 and may be more if necessary to repay the loan within 10 years (excluding periods of deferment and forbearance)
  • Extended: Under the Extended Repayment Plan, the minimum payment amount is $50, and may be more if necessary to pay off our loan in the maximum number of repayment years. The repayment period generally varies from 12-25 year according to the total loan amount. The higher the loan amount the longer the repayment period will be.
  • Graduated: Under the Graduated Repayment Plan, the payments start out low and increase every two years. The repayment period generally varies from 12 -25 years, depending on the total amount borrowed. Your stating monthly payment amount will be the larger of the following two calculations:
    150% of the amount that would be required under the Standard Repayment Plan, or
    the amount of interest that accrues monthly on the loan.
  • Income Based Repayment, Income Contingent, Income Sensitive and the Pay as you Earn plans are all repayment plans that are based on your income and a number of other factors.    Before considering this plan you should contact our office to see if you qualify for LIPP.

Perkins:
The annual loan maximum is $8000 – Most HLS students received between $2,700 and $6,100 during their time at HLS.

  • All  Perkins loans have a 5% fixed interest rate and are subsidized loans.
  • You have a nine month grace period, with repayment beginning in the tenth month.
  • Interest does not accrue until nine months after the last day of class which, for May graduates, is May 14, 2015 (Federal regulations state that your graduation date is the last day of class and not the actual date you receive your diploma.)
  • Harvard University is the lender and ECSI is the servicer of your Perkins loan unless you decided to consolidate this loan.  If you consolidated, your new lender would be your consolidation agency.
  • If you consolidated your Perkins loan with your Direct or FFELP Stafford loans, then your grace period is now six months and no longer nine months and your interest rate is now the consolidated rate.
  • Consolidating your Perkins loan will also make you ineligible for federal loan cancellation or postponement.
  • If you are going into a job that qualifies for federal loan cancellation, such as Peace Corp/Vista, Nonprofit Family Service Agency, U. S. Armed Forces in hostile area, Law Enforcement (District Attorney), you may not want to consolidate your Perkins loans. Refer to the Student Loan Office’s Perkins Loan Cancellation and Postponement form.
  • Perkins loans that are eligible for LIPP will not receive a double benefit, therefore, if you are not paying on your Perkins loan because it is being cancelled, LIPP will not use the Perkins loan in it’s calculation of eligibility. Contact the LIPP office with specific Perkins cancellation and postponement questions.
  • There is only one repayment option for Perkins loans: fixed monthly payment amount for a maximum of 10 years depending on total amount borrowed (minimum monthly payment of $40).

Harvard Law School loans:

The annual loan maximum will vary from year to year and is based on the reason we awarded you these funds.

  • All HLS loans have a fixed interest rate ranging from 5 -7% depending on the award year and the reason we awarded your these funds.
  • Most students receive Unsubsidized Harvard Law School loans with the exception of international students who receive the first $8500 in subsidized funds in the 11-12 academic year (in order to mimic the federal loan program that year), students with dependents and summer SPIF loans.
  • Your Unsubsidized Harvard Law School loans accrue interest from the date of disbursement, whereas your subsidized Harvard Law School loans do not accrue interest until the loan is in repayment.
  • Your loan has a six month grace period with the first payment due in the seventh month after the last day of class which for May graduates, is May 14, 2015
  • Harvard University is the lender and ECSI is the servicer of your HLS loans. Harvard Law School loans cannot be consolidated with the federal loans.
  • There is only one repayment option for Harvard Law School loans: 10 years of a fixed monthly payment amount (minimum monthly amount of $50).