Loans for Graduate & Professional Students

There are three sources for educational loans:

1. The Federal Government
2. State Governments/State Agencies
3. Private Lenders

State agency loans and private loans will require an established credit history and/or a creditworthy co-signer. Utilizing a creditworthy co-signer for one of these types of loans may help to secure a lower interest rate than if you as the student borrower were to take out a private loan or state agency loan on your own.

Loans through the Federal Government do not use the same credit metrics compared to traditional lenders. There are two types of federal student loans available to eligible Graduate & Professional students:

• Direct Unsubsidized Loan: Does not require a credit check nor is established credit needed to utilize this type of loan
• Direct PLUS Loan: Does require a credit check and borrowers must not have “adverse credit history” to be approved for this type of loan. Borrowers that do have adverse credit history may be able to take additional action steps to become eligible for the PLUS loan.

Most educational loans have a limit to how much you can borrow. As a borrower, you cannot take out an educational loan that exceeds the Cost of Attendance of your program, including all other financial aid awards.

In addition to this limit, many loan programs will also have annual borrowing limits and aggregate or lifetime limits.

The Federal Direct Loan program has distinct borrowing totals for both aggregate and annual limits.

• Direct Unsubsidized Loan: Annual Limit: $20,500; Lifetime Limit*: $138,500
  • *Includes Unsubsidized and Subsidized Loans from prior education
• Direct PLUS Loan: Annual Limit: Up to Cost of Attendance; Lifetime Limit: Up to Cost of Attendance

There are several factors that contribute to the overall cost of borrowing educational loans:

• Origination Fee
• Interest Rate
• Interest Accrual

An Origination Fee is a cost that can be charged by the lender as a way to recoup some of the lender’s processing costs. The fee is charged upfront and deducted from the amount before the loan is even disbursed. Federal Government Loans charge an origination fee on all of their loans. It is less common for State Government/State Agency Loans and Private Loans to charge an origination fee.

The Interest Rate is the rate you are charged for borrowing and is usually represented as an Annual Percentage Rate such as 5% APR.  Interest rates can be fixed or variable, meaning that the rate will always stay the same (fixed) or it can change over time depending on the financial index used (variable).

Interest Accrual refers to when the lender begins charging interest. Depending on the type of loan, interest accrual will either begin on the day of disbursement (unsubsidized/PLUS loan) or when the loan enters repayment (subsidized loan).

Student loans generally go into repayment six months after the student drops below half-time enrollment.  There is usually a six-month grace period between enrollment and repayment, during which time payments are not required.

However, not every borrower is eligible for a six-month grace period between enrollment and repayment. For example, federal borrowers who have already exhausted their six-month grace period from pervious Subsidized or Unsubsidized Loans and borrow new Unsubsidized Loans would not get a renewal of their six-month grace period.

Most loans have a 10-year repayment period. Only Federal Loans offer lower monthly payments based on your income. In fact the newest repayment plan option, Saving on A Valuable Education, or SAVE, has been designed to provide significant financial relief for borrowers, most notably through the elimination of carrying over unpaid interest and a change in the formula used to calculate payments that has overall lowered a borrower's monthly loan payment. 

Due to these changes, individual borrowers with a single-filer tax status who earn less than $32,800 per year would be required to pay $0 on the SAVE plan and would not see their loan balance increase.

All federal borrowers will have the opportunity to attend student loan exit counseling sessions, however additional information on the repayment options for federal borrowers can also be found on studentaid.gov.

Forgiveness programs for educational loans are very limited and require specific eligibility criteria.

For example, Federal Loan borrowers may receive loan forgiveness after working for a qualifying employer. Some State/State Agency Loans offer similar programs to encourage employment in certain professions. The NC Forgivable Loan is another example of a loan forgiveness program.

Direct Loans are awarded by your program’s Financial Aid Office based on the information you provide on the Free Application for Federal Student Aid, or FAFSA, and the Cost of Attendance for your program.

Steps to Apply:

1. Complete the FAFSA online. 
2. Be sure to have the results sent to Duke University by entering school code 002920 at the end of the form.
3. Wait for your aid notification.
4. A staff member from your program’s Financial Aid Office will automatically award your eligible borrowing amounts for both types of Federal Loans when completing your financial aid award.
5. Review your loan amount(s)- if you do not need to borrow all that you were awarded or think you may need to borrow more, you may be able to make adjustments to your award.
6. Accept your loan on your student account on DukeHub. Any adjustments you need to make to your award can be done with assistance from your financial aid office.

If this is the first time you have borrowed Federal Direct Loans, there are additional steps you must complete before the loan application process is complete.

Additional steps for first-time borrowers:

1. Complete Entrance Counseling
2. Sign a Master Promissory Note

If you receive notice that your Direct PLUS Loan has NOT been approved, the following steps may be needed:

• For PENDING CREDIT: Remove all credit freezes in place through each of the three credit reporting bureaus (Experian, Equifax, TransUnion) AND complete a PLUS application online so the Department of Education can run your credit successfully
• For DENIED CREDIT: You as the borrower have two options to explore: 
  • Obtain an endorser/co-signer* AND complete credit counseling on studentaid.gov
    • For every loan that is endorsed, individual promissory notes must be signed
  • Appeal the credit decision AND complete credit counseling on studentaid.gov

1. Review the full borrower requirements and eligibility criteria at CFNC.org, the College Foundation of North Carolina.
2. Fill out an application for the NC State Assist Student Loan. Once completed, you can check your status online with CFNC.
3. If approved, CFNC will contact your program’s Financial Aid Office directly to process your loan and apply it to your Bursar account.

1. Review the full borrower requirement and eligibility criteria online at CFNC.org
2. Fill out the application for the NC Forgivable Loan. (application process generally begins December or January and closes early spring)
3. Applications will be entered into a lottery for award consideration.
4. If you are awarded this loan, CFNC will contact your program’s Financial Aid Office directly to process your loan and apply it to your Bursar account.

1. Review the list of Private Loan Options and explore additional lenders as needed.
   • While students may borrow from lenders not included on the list of Private Loan Options, the lenders on this list participate in our ELMSelect lender comparison tool. This tool can be used to compare rates, terms, and calculate your future payments. The ELMSelect comparison tool may help you determine which borrowing option may be best for you.
2. Apply online at the website of your preferred lender.
3. Complete the self-certification form at your lender’s website.
4. Once your application process is completed according to the lender's instructions, your program’s Financial Aid Office will receive confirmation from your lender and will add the loan to credit your Bursar bill.