Need-Based Loans
The federal government supports two loan programs based on financial need and the availability of funds.

The Federal Perkins Loan program enables eligible students to borrow funds each academic year at a simple interest rate of 5%, with repayment beginning six months after graduation or less than half-time enrollment for new borrowers. The aggregate limit for graduate study is $40,000, which includes all undergraduate Perkins Loans.

The Subsidized Federal Stafford Loan is available through private lenders at a 6.8% interest rate with no interest accruing until six months after graduation or less than half-time enrollment. A graduate student may be eligible for a maximum of $8,500 per year. A student’s eligibility is based on financial need as determined by the Office of Financial Assistance Services. The aggregate limit for graduate study is $65,500, which includes all undergraduate Subsidized Stafford Loans at the undergraduate and graduate levels. If you previously borrowed Stafford Loans, we recommend that you continue using the same lender if at all possible. It will benefit you when you go into repayment because you will only be making one monthly payment.

Non Need-Based Loans
The federal government supports other loan programs that are not based on need.

The Unsubsidized Federal Stafford Loan may be awarded to a student who is not eligible for the need-based (subsidized) Stafford Loan. The unsubsidized loan is made through private lenders at the same 6.8% interest rate as that of the subsidized loan. Interest on unsubsidized loans begins to accrue immediately after the loan is disbursed. The student has the option to begin repaying the interest immediately or to defer all repayments until after graduation or less than half-time enrollment. A graduate student may be eligible for an amount up to $8,500 per year. If you previously borrowed Stafford Loans, we recommend that you continue using the same lender if at all possible. It will benefit you when you go into repayment because you will only be making one monthly payment.

The Additional Unsubsidized Stafford Loan is also available to graduate students. The annual limit for graduate study is $12,000. The same rules apply to this program as explained previously. Interest begins to accrue immediately after the loan is disbursed.

Federal Graduate PLUS Loan
The Grad PLUS loan is available to graduate students at an 8.5% interest rate. Graduate students can borrow up to the cost of education that is not covered by financial aid.

Alternative Education Loans are available to help finance a UM education. These loans are not subsidized by the federal government, and therefore may be more expensive than other options. We strongly encourage you to evaluate the Federal Stafford loans before incurring debt through an alternative loan. The interest rates are usually variable and monthly payments are extended over several years. Alternative loans are credit based and may require a cosigner.