Loan Programs

Several loan programs exist to help defer the costs of college.  The information below is provided as a guide to select the loan program that is right for you.

 

Federal Stafford Loan Program

 
Federal Stafford loans are available to undergraduate and graduate students attending college at least half-time and are one of the most common and lowest-cost loan options.  Nearly all students are eligible to receive Stafford loans, regardless of credit.  Eligibility is dependent on school cost, enrollment and grade level.  There are two types of Federal Stafford Loans available to students; subsidized and unsubsidized. 

 
Federal Subsidized Stafford Loan

  • This is a need-based loan.
  • You must be enrolled at least half-time in an eligible program to qualify. 
  • Interest on the loan is paid by the federal government while you are in school, during your grace period, and during authorized periods of deferment. 
  • During periods of forbearance, you will be responsible for interest that accrues on your subsidized loans. 
  • Repayment of your loans will begin six months after you graduate, withdraw from school or drop below half-time enrollment status.

Federal Unsubsidized Stafford Loan

  • This is not a need-based loan.
  • You must be enrolled at least half-time to qualify.
  • You are responsible for paying the interest on your loan from the date of disbursement.
  • You can choose to pay the interest while in school or you can choose to postpone the payment of the interest until you enter repayment. If you choose to postpone the payment of the interest, it will be added to the principal amount of your loan.
  • Repayment of your loans will begin six months after you graduate, withdraw from school or drop below half-time enrollment status.

Stafford Loan Limits

 

Stafford Loans are the primary student loans offered by the federal government. Current Stafford Loan Limits are as follows:

 

       Dependent Student     Independent Student
First Year Undergraduate              $5,500               $9,500
Second Year Undergraduate              $6,500              $10,500
Third Year Undergraduate              $7,500              $12,500
Fourth Year Undergraduate              $7,500              $12,500
Graduate                             $20,500

 

For a more detailed overview of Stafford Subsidized and Unsubsidized loan limits as well as aggregate loan limits, FAME has prepared a quick reference sheet on Stafford Loan Limits.

 

Federal Perkins Loan Program


This Federal loan Program is a need-based, low interest rate loan that is awarded by the financial aid office.  Unlike Stafford Loans, Perkins Loan funds are limited and are not available at all schools.

  • Available to students with exceptional financial need.
  • Generally, you must be enrolled at least half-time to qualify.
  • Interest on the loan does not accrue while you are in school, during your grace period, or during authorized periods of deferment.
  • The interest rate is fixed at 5%.
  • Repayment begins nine months after you graduate, withdraw from school or drop below half-time enrollment status.

Federal PLUS Loan Program for Parents & Graduate Students


The Federal PLUS Loan Program is available to parents of undergraduate students and students pursuing a graduate or professional degree.

  • You must be awarded the maximum Stafford Loan eligibility to apply for the Grad PLUS Loan.
  • This is not a need-based loan.
  • The loan requires a credit check, so a good credit history is needed to qualify.
  • The interest rate is adjusted annually. Interest accrues immediately upon disbursement and during any periods of deferment or forbearance.
  • If you choose to postpone the payment of interest, it will be added to the principal amount of your loan.
  • You may request to borrow up to the full cost of education less the amount of any other financial aid received.
  • Repayment of your Grad PLUS Loan will begin 60 days after the final disbursement of the loan. You will be eligible for an in-school deferment so long as you are enrolled at least half-time; however, interest will continue to accrue.  

State of Maine Sponsored Loan Programs

The State of Maine sponsors several loan programs that are targeted to students seeking studies in a specific profession such as education or healthcare.  Additional details may be found under the Maine Financial Aid section of this site.  

 

Alternative Loan Programs

Alternative loans provide a source for financing costs of your education not covered by other forms of financial aid. 

 

It is good practice to document the terms of the various loans you are exploring to allow comparison across several important factors.  FAME has created a simple worksheet to help you. 

 

It is easy to fall victim to loan offers that come in the mail, over the Internet, or in your private email. Read this guide to protect yourself.

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    The Maine Senate recently confirmed Gov. LePage’s six nominees (two reappointments and four new members) to the Finance Authority of Maine (FAME) Board of Directors. The six board members are: Jonathan A. Block of Portland; Reis Hagerman of Standish; James G. Howard of Topsham; Gregory E. Miller of Old Town; Rosaire Pelletier of Madawaska; and James P. Violette, Jr. of Waterville. Upon swearing in, the new members will join the fifteen-member FAME Board.   

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