Federal Loans

Luther Rice participates in the William D. Ford Federal Direct Loan Program.  Direct Loans are low-interest loans for students to help pay for the cost of higher education.  The lender is the U.S. Department of Education rather than a bank or other financial institution.

Direct Stafford Loans

Two types of Direct Stafford Loans exist, subsidized (needs-based) and unsubsidized (non needs-based).  The student does not begin repayment on these loans until six months after either the student graduates or drops below half-time enrollment.

Undergraduate Students

Subsidized:

The government pays the interest on this loan while the student is enrolled at least half-time (2 classes) and until he graduates.

Unsubsidized:

The student pays the interest on this loan.  Students may elect to pay the interest during their education (recommended) or may defer payment and the interest capitalizes into the original loan.

The granting of which type of loan the student receives is automatically determined from the student's FAFSA information and the school's cost of attendance.

The annual loan amount is determined by federal annual loan limits and the school's cost of attendance.

Graduate Students

Unsubsidized:

The student pays the interest on this loan.  Students may elect to pay the interest during their education (recommended) or may defer payment and the interest capitalizes into the original loan.

The annual loan amount is determined by federal annual loan limits and the school's cost of attendance.

Private Loan

Students may apply for a private loan through any lender of their choosing.  Luther Rice recommends that students investigate a Direct Loan before borrowing from a private lender because of potential preferable terms of a Direct Loan.  Luther Rice does not endorse any particular private lender.

Consolidation Loan

Typically, after a student graduates or drops below half-time he may apply for a consolidation loan to combine various loans into one new loan.  Visit www.StudentLoans.gov to view information and apply for a consolidation loan.


Information on annual and lifetime loan limits.

Current interest rates on Federal Direct Loans.