Loans

Federal Loans are educational loans and must be repaid once a student is no longer enrolled at least half time. There are four main loan types described below.

1. Federal Perkins Loan Program is available to both undergraduate and graduate students

Federal Perkins loans are campus-based loans. It is a federal loan program; however, Castleton University is the lender.

FEDERAL PERKINS LOAN PROGRAM TO END (UPDATE) New Federal Perkins Program regulations were made law on December 18, 2015. The new regulations limit the program to be available only up to the 2017-2018 academic year for undergraduate students (and only those students who meet new criteria), and only up to the 2016-2017 academic year for graduate students (and only those students who meet certain criteria). The new regulations now require additional disclosures to be made with each Perkins Loan disbursement, disclosure information is available. The new criteria for undergraduate students will include a requirement that Direct Loans be awarded first, and for graduate students criteria includes the receipt of a Perkins disbursement prior to October 1, 2015 as well as continuation in the same program of study. Details mentioned here are not all-inclusive, and interpretation of the new regulations are still being made. We will update the website as we learn more about the new regulations.

2. Federal Direct Subsidized & Unsubsidized Loans (William D Ford Direct Student Loans)

  • Must complete Direct Loan Entrance Counseling (Log in with your FSA ID)
  • Must sign a Master Promissory Note (Log in with your FSA ID)
  • Eligibility is based on cost of attendance less other financial aid and family contribution
  • Annual borrowing limits and Aggregate loan limits:

Federal Direct Loan Limits
Authorized by Ensuring Continued Access to 
Student Loans Act of 2008 (H.R. 5715) 
Effective for Federal Direct loans first disbursed on or after July 1, 2008

First-Year Undergraduates (less than 30 credits earned)

Academic Grade Level/Loan Type and Maximum Loan Amount

Base Direct Loan eligibility (subsidized and unsubsidized):
Dependent Student = $3,500
Independent Student or Dependent Student Whose Parent is Ineligible for Federal Direct PLUS = $3,500

Additional unsubsidized Direct Loan eligibility:
Dependent Student = $2,000
Independent Student or Dependent Student Whose Parent is Ineligible for Federal Direct PLUS = $6,000

Maximum First-Year Total:
Dependent Student = $5,500
Independent Student or Dependent Student Whose Parent is Ineligible for Federal Direct PLUS = 
$9,500

Second-Year Undergraduates (30-59 credits earned)

Academic Grade Level/Loan Type and Maximum Loan Amount

Base Direct Loan eligibility (subsidized and unsubsidized):
Dependent Student = $4,500
Independent Student or Dependent Student Whose Parent is Ineligible for Federal Direct PLUS = $4,500

Additional unsubsidized Direct Loan eligibility:
Dependent Student = $2,000
Independent Student or Dependent Student Whose Parent is Ineligible for Federal Direct PLUS = $6,000

Maximum Second-Year Total:
Dependent Student = $6,500
Independent Student or Dependent Student Whose Parent is Ineligible for Federal Direct PLUS = 
$10,500

Third-and Subsequent-Years Undergraduates (60 or more credits earned) and Certificate Students

Academic Grade Level/Loan Type and Maximum Loan Amount

Base Direct Loan eligibility (subsidized and unsubsidized):
Dependent Student = $5,500
Independent Student or Dependent Student Whose Parent is Ineligible for Federal Direct PLUS = $5,500

Additional unsubsidized Direct Loan eligibility:
Dependent Student = $2,000
Independent Student or Dependent Student Whose Parent is Ineligible for Federal Direct PLUS = $7,000

Maximum Third-and Subsequent-Years and Certificate Student Total:
Dependent Student = $7,500
Independent Student or Dependent Student Whose Parent is Ineligible for Federal Direct PLUS = 
$12,500

Graduate and Professional Students

Academic Grade Level/Loan Type and Maximum Loan Amount

Total unsubsidized Direct Loan eligibility:
Dependent Student = N/A
Independent Student or Dependent Student Whose Parent is Ineligible for Federal Direct PLUS = $20,500

Maximum Graduate and Professional Total:
Dependent Student = N/A
Independent Student or Dependent Student Whose Parent is Ineligible for Federal Direct PLUS = 
$20,500

Aggregate Loan Limits

Dependent Undergraduate or Certificate Student:
$31,000 (no more than $23,000 of which may be subsidized)

Independent Undergraduate or Certificate Student or Dependent Student Whose Parent Is Ineligible for Federal Direct PLUS:
$57,500 (no more than $23,000 of which may be subsidized)

Graduate/Professional Student:
$138,500 (no more than $65,500 of which may be subsidized)

150% Subsidized Loan Limits

New borrowers on or after July 1, 2013 become ineligible to receive additional Direct Subsidized Loans if the period during which the borrower has received such loans exceeds 150% of the published length of the borrower's educational program. The borrower also becomes responsible for accruing interest during all periods as of the date the borrower exceeds the 150% limit.

  • Interest rates for undergraduate borrowers are fixed at 3.76% for loans disbursed between July 1, 2016 and June 30, 2017 and at 4.45% for loans disbursed between July 1, 2017 and June 30, 2018. For graduate borrowers the Unsubsidized loan rate is fixed at 5.31% for loans disbursed between July 1, 2016 and June 30, 2017 and at 6.00% for loans disbursed between July 1, 2017 and June 30, 2018.
  • Net origination fee of 1.069% of the gross amount of the loan for loans first disbursed between 10/01/16 and 09/30/17.  Net origination fee of 1.066% of the gross amount of the loan for loans first disbursed between 10/01/17 and 09/30/18.  The fee amount is subject to change based on federal funding.
  • There are repayment plans designed to meet the needs of almost every borrower.
  • No payments of principal are required while enrolled at least half time (on Subsidized and Unsubsidized Direct Loans), but interest accrues while enrolled for Unsubsidized Direct Loans. Students can choose to pay the interest while they are in school or have the interest added to their principal.

If your class level changes during the year, you may be eligible for an increase in your Federal Direct Loan. If you wish to request an increase in your loan amount, please email or stop by the Financial & Registration Services Office to present the request in writing.

The Federal Student Aid Ombudsman of the Department of Education helps resolve disputes and solve other problems with federal student loans.

You may access your prior Federal Loan (Perkins, Direct, and Stafford) information on the National Student Loan Data System (NSLDS) website. This site contains all of your federal Title IV aid history.  You can also view your Federal Loan information, including comparing payment plans, by logging into studentloans.gov and choosing the Repayment Estimator.  Both sites require your FSA username and password to log in.

3. Federal Direct Parent Loan for Undergraduate Students (PLUS)

  • The PLUS program allows parents of a dependent student to borrow funds. Eligible parent borrowers must be either biological or adoptive parent, or step parent if listed on the FAFSA. 
  • Parents can borrow up to the cost of attendance less financial aid.
  • Interest rate is fixed at 6.31% for loans disbursed between July 1, 2016 and June 30, 2017 and at 7.00% for loans disbursed between July 1, 2017 and June 30, 2018.
  • Net Origination fee of 4.276% for loans first disbursed between 10/01/16 and 09/30/17.  Net origination fee of 4.264% of the gross amount of the loan for loans first disbursed between 10/01/17 and 09/30/18.(fee is subject to change based on federal funding).
  • Must apply online (Log in using parent FSA ID)
  • Must complete a Master Promissory Note
  • A credit check is required to borrow from this loan program. The credit check is valid for 180 days, and applications are available starting May 1 for the upcoming academic year. In the event the credit check expires before the loan can be processed the credit will be pulled again and the result may be different from the original based on borrower credit history.
  • In the event that the parent credit is denied, the parent borrower will be presented with options which include obtaining an endorser (co-signer), appealing the credit decision, or canceling the PLUS Loan. If the parent chooses to cancel the loan, the student will be awarded an additional unsubsidized loan (up to $4,000 for the year for students with less than 60 cumulative credits or up to $5,000 for the year for students with 60 or more cumulative credits). If the parent chooses to get an endorser or appeal the credit decision, the parent will be directed to complete parent PLUS Loan counseling, which must be completed in order to process the loan after the endorser is obtained or the credit appeal granted.
  • Repayment begins 60 days after the second disbursement.
  • Parents may choose to defer payments until six months after the date the student ceases to be enrolled at least half time or may pay accruing interest monthly or quarterly, or allow interest to be capitalized quarterly. To request an in-school deferment (after the first disbursement) you may contact Direct Loan Borrower Services at 800-848-0979.
  • There are three repayment options: Standard Repayment, Graduated Repayment and Extended Repayment Plan.
  • Parents are given a choice of repayment plans prior to their first payment.
  • Repayment periods range from 10 to 30 years depending on repayment option selected.

4. Federal Direct Plus Loan for Graduate Students

  • The Direct Grad PLUS Loan is for creditworthy graduate students enrolled at least half time. Graduate students must apply for the maximum amount of Federal Stafford Loans first.
  • Interest rate is fixed at 6.31 for loans disbursed between July 1 2016 and June 30, 2017 and 7.00% for loans disbursed between July 1, 2017 and June 30, 2018.
  • Net Origination fee of 4.276% for loans first disbursed between 10/01/16 and 09/30/17.  Net origination fee of 4.264% of the gross amount of the loan for loans first disbursed between 10/01/17 and 09/30/18.(fee is subject to change based on federal funding).
  • Must apply online (Log in using FSA ID)
  • Must complete a Master Promissory Note
  • A credit check is required to borrow from this loan program. The credit check is valid for 180 days, students cannot apply until May 1 for the upcoming year. In the event the credit check expires before the loan can be processed the credit will be pulled again and the result may be different from the original based on borrower credit history.
  • If borrower is denied credit they have option of reapplying with a creditworthy endorser. If they choose to do this, the student will be directed to complete Grad PLUS Loan counseling, which must be completed prior to loan being processed with an endorser.
  • Payments are deferred until six months after student ceases to be enrolled at least half time. Interest accrues during this time. Student may choose to make interest payments while loan is deferred.
  • There are three repayment options:  Standard Repayment, Graduated Repayment, and Extended Repayment Plan. You may contact Direct Loan Borrower Services at (800) 848-0979 for more information on repayment options.

A Note About Direct Loan Servicers

Direct Loans (Subsidized, Unsubsidized, Parent PLUS, and Grad PLUS) are funded by the U.S. Department of Education through Castleton University. Under the supervision of the Department of Education, loan servicers are assigned to manage the loans. For more information about loan servicers go to visit the Federal Student Aid website or go to the NSLDS website or studentloans.gov to view the loan servicer information for your Direct Loans. 

Castleton Alumni Loan Fund

Emergency short-term loans of up to $50 are available from the Alumni Loan Fund. These loans are non-interest bearing; however a service charge of fifty cents ($0.50) is made for each loan. Loans from these funds are usually granted for emergencies that arise. Students are generally asked to repay the loan within thirty (30) days.