HDS - Financial Aid - Loan Programs

Financial Aid

Loans

Federal Perkins Loan | William D. Ford Federal Direct Loan Program | Graduate Federal PLUS Loans

The Divinity School participates in the government loan programs described below as a way to make funds available to eligible candidates. For information on eligibility for these programs, please see Federal Aid Eligibility and Requirements.

First-time borrowers to any federal loan program must have a loan entrance interview and either sign an entrance interview form or successfully complete an entrance interview quiz prior to the first disbursement of the loan. The quiz/form states the borrower's rights and responsibilities as well as the consequences of default. Upon receipt of a degree, approval of a leave of absence, or withdrawal from HDS, a loan exit interview is required. In this session students will receive specific information on repayment options, indebtedness levels, and other general loan information.

Federal Perkins Loan

A limited amount of loan money is available through the Federal Perkins Loan program to those students who demonstrate the greatest financial need. In reviewing financial need, previous educational indebtedness is heavily weighted. Selection of the recipients for this loan is administered within the Office of Financial Aid. There is no separate application process for this loan, and students are not guaranteed to receive funding from this program, despite their ability to document financial need. The maximum annual limit for this loan is $8,000 for graduate students and varies according to need (the aggregate loan limit, including undergraduate Perkins Loan borrowing, is $60,000). Generally this loan is disbursed in two equal installments. Interest is 5% per annum and the grace period is nine months for new borrowers.

William D. Ford Federal Direct Student Loan Program

Harvard University has been selected by the U.S. Department of Education as a Direct Loan Program participating institution. The terms and conditions of the William D. Ford Federal Direct Loan Program are very similar to the Federal Family Education Loan Program that has been used in the past. The major differences lie in the simplification of the borrowing process, the elimination of the commercial lender, more flexible repayment options, and the Department of Education acting as lender (rather than a bank) and provider of customer service.

After the loan eligibility has been determined and an award acceptance received, an electronic Master Promissory Note will be generated online (students who have signed a Direct Loan Master Promissory Note prior to attending HDS may be excused of this requirement). The borrower must complete and sign this note, which requires two references. Ordinarily, this process must be complete prior to registration in September. After the note has been signed, the proceeds will be credited to the student's term bill within three business days.

Repayment usually begins six months after a student's degree is granted, enrollment is terminated, a leave of absence is approved, or enrollment drops below half-time. The student will always make payments to the same Direct Loan servicer, even if the student receives Direct Loans at different schools. Direct Loans will not be sold and students who have received Direct Loans while at different schools will not have to send deferments or forbearances to multiple lenders and/or guaranty agencies. Deferments are granted for at least half-time study at a postsecondary institution, enrollment in an approved graduate fellowship program, participation in a rehabilitation training program for the disabled, unemployment (up to three years), or economic hardship (up to three years). A borrower may choose any of the available repayment plans:

Standard Plan — fixed annual repayment amount (minimum $600) over a fixed period of time (not to exceed 10 years)
Extended Plan — assumes a fixed annual repayment amount (greater of $600 or the amount of interest due) over an extended period of time (12 to 30 years)
Graduated Plan — annual repayment at two or more levels over a fixed or extended period of time: repayments not less than 50% or more than 150% of loan repayment if repaid under the standard plan
Income Contingent Plan — varying annual repayment amounts based on borrower's income over an extended period of time, not to exceed 25 years.

William D. Ford Federal Direct Subsidized Loan

All applicants must undergo a full financial need analysis as described under Federal Methodology requirements to determine eligibility. Eligible students may borrow a maximum of $8,500 per year up to a total of $65,500 (including undergraduate and graduate indebtedness under the William D. Ford Federal Direct Loan Program and the Federal Stafford Loan Program). This loan has a fixed interest rate of 6.8%. A 0.50% loan origination fee will be deducted from the face value of the direct loan, the remaining proceeds of which will be disbursed in two equal parts to the student's e-bill.

William D. Ford Federal Direct Unsubsidized Loan

This loan has the same terms and conditions as the William D. Ford Federal Direct Subsidized Loan except that: 1) the borrower is responsible for interest that accrues while she or he is in school; and 2) there is no analysis of need. The borrower may choose to make the payments or request that the interest be accrued. This loan is open to students who do not qualify for, or only partially qualify for, the William D. Ford Federal Direct Subsidized Loan. A student can borrow up to $20,500 per year from this loan program, less the amount received under the William D. Ford Federal Direct Subsidized Loan. Total borrowing under the William D. Ford Federal Direct Subsidized Loan, William D. Ford Federal Direct Unsubsidized Loan, Federal Stafford Loan, and Federal Supplemental Loan for Students for both undergraduate and graduate education cannot exceed $138,000.

Graduate Federal PLUS Loans

Graduate students are eligible to borrow a Federal Graduate PLUS Loan. The PLUS Loan allows students who qualify to borrow funds up to their cost of attendance minus all sources of financial aid. Before applying for a Graduate PLUS Loan, students are required to meet with a financial aid counselor. Students can apply for either the Direct Graduate PLUS Loan or from any other lending agency via the Federal Family Education Loan Program (FFELP).

Direct Graduate PLUS Loan

Interest Rate
The Direct Graduate PLUS Loan is a federal loan with a fixed 7.9% interest rate and a 4% federal guarantee fee. The Department of Education will only charge 2.5% initially. The remaining 1.5% will not be charged unless you fail to make your first 12 monthly payments on time.

Eligibility
To qualify, an applicant must be a U.S. citizen or permanent resident and must have a satisfactory credit history. Individuals who apply and are turned down due to credit issues are eligible to obtain an endorser (co-signer) and reapply.

Amount
Borrowers are eligible to receive up to the cost of education minus all other aid received from all sources. Grad PLUS Loan borrowers must first apply and be approved for their Stafford Loan eligibility prior to borrowing a PLUS Loan.

How to Apply
HDS students must meet with a financial aid representative before a PLUS Loan will be certified. To apply for a Direct Grad PLUS Loan, applicants must complete and return a credit check authorization form. Once you have passed the credit check, you will be notified of approval.

Deferments, Forbearance, and Repayment Plans
Unlike private loans, PLUS Loans are federal loans which qualify for deferment, forbearance, forgiveness, consolidation, and several different repayment plans. Deferments include unlimited in-school deferment, and up to 3 years of deferment for financial hardship and unemployment. PLUS Loans also qualify for up to 3 years of forbearance. Repayment plan options include the 10-year standard plan, as well as an extended plan that will allow you to reduce your monthly payments by lengthening your repayment to up to 25 years. There is also an income-contingent repayment plan.

Grace Period
Please note, however, that PLUS Loans do not have a grace period and repayment will begin within 30 days of completing your program. There are, however, options to request a forbearance so that you can begin repaying your PLUS Loan after the same six-month grace period afforded the Stafford Loan.

Federal Family Education Graduate PLUS Loan (FFELP)

Interest Rate
The FFELP Graduate PLUS Loan is a federal loan. The interest rate will not exceed 8.5%, and there is a 4% federal guarantee fee. Please note that interest rates and guarantee fees could be lower depending on which lender you choose.

How to Apply
HDS students must meet with a financial aid representative before a PLUS Loan will be certified. To apply for a FFELP Grad PLUS Loan, applicants should apply directly with the lender they are choosing to process the loan. Once you have passed the credit check, the financial aid office will be contacted by your lender to electronically certify your eligibility.

Grace Period
Please note, however, that PLUS Loans do not have a grace period and repayment will begin within 30 days of completing your program. There are, however, options to request a forbearance so that you can begin repaying your PLUS Loan after the same six-month grace period afforded the Stafford Loan.

Harvard Divinity School