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Federal Loan Current Terms & Conditions

  1. All students must submit the Free Application for Federal Student Aid (FAFSA) to the U.S. Department of Education to receive financial aid from federal aid programs. Within four weeks, the U.S. Department of Education will process the FAFSA and calculate an Expected Family Contribution (EFC), which is used to determine a student's eligibility for subsidized federal loans.
  2. An independent student is any student enrolled in graduate or professional school. Therefore, Princeton graduate students completing the FAFSA are not required to complete the sections asking for parental income, just the student sections.
  3. Maximum limits: Graduate students are eligible to borrow a maximum of $18,500 Federal Stafford loan funds per academic year ($8,500 of which may be subsidized) up to an aggregate limit of $138,500 ($65,500 of which may be subsidized) for graduate or professional education. Graduate/professional students may borrow additional funds through the Federal Perkins loan program (maximum of $6,000 per year up to an aggregate limit of $40,000, including undergraduate Perkins loans).
  4. Students must reapply for federal aid every year.
  5. For each Stafford loan, the federal government charges an origination fee equal to the amount required by the Higher Education Act of 1965 (3 percent). The guaranty agency that guarantees the loan may charge a fee not to exceed a maximum amount specified in the Act (up to 1 percent). These fees will be deducted proportionately from each Stafford loan disbursement.
  6. Loan repayment is deferred while the student is in school at least half-time at an eligible school and for a grace period from six months up to three years after termination of studies (students should contact their lenders for additional information).
  7. Interest accrues on the unpaid principal balance of each loan from the date of the disbursement until the entire principal balance is paid in full. The government pays interest benefits for students on the Federal Perkins and the Subsidized Federal Stafford loans while they are enrolled in school and during the grace period. Students must pay all interest charges on Unsubsidized Federal Stafford loans upon disbursement, unless they have previously requested that the interest that accrues be added to the principal balance of the loan (referred to as capitalization).
  8. The Federal Stafford loan interest rate varies annually and may not exceed 8.25 percent. The Federal Perkins loan interest rate is 5 percent.
  9. Princeton University is required by federal regulations to have financial aid transcript information on file from all U.S. institutions that the student has attended at least half-time. The transcript identifies students who are in default on federal or state guaranteed loans or owe a refund on other federal aid programs. The Graduate School will obtain this information from a national database system.
  10. All students who want to be considered for federal loans must be registered with the Selective Service, if required.
  11. Students who have been convicted of drug-related crimes may be ineligible for federal aid programs.
  12. Students must be enrolled at least half-time in order to qualify for federal aid.