Direct loans are funded by the government and offer fixed interest rates and, in many cases, income-based repayment plans. There are options for students and parents.
Subsidized loans permit students who demonstrate financial need to borrow specific amounts of money each year in college. These loans require no principal payments while the student is enrolled at least half time, and the U.S. Department of Education pays the interest while students are in school and during a six-month grace period after graduation. The maximum amount students may borrow their freshman year is $3,500. Interest rates for the 20/21 academic year for subsidized loans are 2.75%.
Unsubsidized loans are an option for students whose full calculated need is met with Colby financial assistance and for students who do not demonstrate financial need. The only difference between subsidized and unsubsidized loans is that the student is responsible for repayment of all interest that accrues. The maximum amount students may borrow their freshman year is dependent on the student’s level of financial need, not to exceed $5,500. Interest rates for the 20/21 academic year for unsubsidized loans are 2.75%.
PLUS Loans are available to parents to help pay educational costs not covered by other aid. Eligibility is not based on financial need, however a credit check is required. Parent borrowers who have an adverse credit history will need to meet additional requirements to qualify. Interest rates for the 20/21 academic year for parent plus loans are 5.30%.
For additional information please visit: Federal Student Aid
Loan Reimbursement: Opportunity Maine
Opportunity Maine reimburses education-related loans for Maine resident students who complete an associate’s degree or bachelor’s degree in Maine and live, work, and pay taxes in the state thereafter. Reimbursements are not to exceed in-state tuition and mandatory fees at Maine Community Colleges and the University of Maine System campuses.
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