Many families use loans in addition to other funding sources to help finance their educational expenses. Our team is committed to helping you identify the very best and most responsible financing plan to support your goals.
Types of Loans
Direct Subsidized Loans and Direct Unsubsidized Loans are administered by the US Department of Education. Both loan programs offer competitive interest rates, which are determined by federal law. Interest begins to accrue as soon as the loan disburses to your UT student account.
The Department of Education pays the interest on a Direct Subsidized Loan while you are in school and for the first six months after graduation. For a Direct Unsubsidized Loan, you are responsible for paying all of the interest. You can choose to begin payment on your loans and their interest early with no penalty.
Parents of dependent students can also consider a Parent PLUS Loan, a credit-based federal loan given to eligible parent applicants. If the loan is approved, the Department of Education will notify UT, and the loan will be added to your financial aid award. Parents are responsible for all repayments and interest.
Direct Loans are low-interest loans for students and parents to help pay for the cost of your education after high school. The lender is the US Department of Education. However, most of the contact will be with your loan servicer.
With Direct Loans, you:
- Borrow directly from the federal government and have a single contact—your loan servicer—for everything related to repayment, even if you receive Direct Loans at different schools.
- Have online access to your Direct Loan account information through your servicer’s website.
- Can choose from several repayment plans, and you can switch repayment plans if your needs change.
The Direct Loan Program offers these types of loans:
- Subsidized: for students with demonstrated financial need, as determined by federal regulations. No interest is charged while a student is in school at least half-time, during the grace period, and during deferment periods.
- Unsubsidized: not based on financial need; interest is charged during all periods, even during the time a student is in school and during grace and deferment periods.
Student borrowers are not required to begin making payments until after they drop below half-time attendance.
PLUS Loans are unsubsidized loans for the parents of dependent students and for graduate/professional students. These loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest is charged during all periods.
You can apply here using your FSA ID to log in and complete your application.
Alternative student loans are made through private lenders (for example, banks). They are not part of the federal loan program.
UT encourages students to look into federal loan programs before applying for a private loan. If you are ineligible for federal loans or you have exhausted government sources, private loans can help offset the difference between your educational expenses and loans.
There are many private loan options. It is to your benefit to research and find the loan that best meets your needs. The lender has final approval for alternative loans, rather than UT.
Disbursement can be slower than it is for direct loans.
There are limits to how much money can be borrowed in federal student loans.
|Grade Level||Academic Year Loan Limit*|
*Amounts for dependent students (the majority of college students). Students who are considered independent by FAFSA are eligible for different amounts. Contact us with any loan questions.
Perkins Loan Repayment and Deferment
Students who previously borrowed through the Federal Perkins Loan program can find more information about repayment and deferment options on the Bursar’s website.
Student Loan Code of Conduct
The purpose of the federal student loan program is to provide the best possible loan terms and service for students and parents who borrow to help finance higher education. UT students and families receive trustworthy, reliable guidance from our institution about financial aid. The university’s first priority in conducting business with student loan providers is to ensure they have borrower benefits and services that provide for the best interests of student and parent borrowers.
The purpose of the federal student loan program is to provide the best possible loan terms and service for students and parents who borrow to help finance higher education. UT students and families receive trustworthy, reliable guidance from our institution about financial aid. The university’s first priority in conducting business with student loan providers is to ensure they have borrower benefits and services that provide for the best interests of student and parent borrowers. The following guidelines are a framework to provide the best possible loan servicing and benefits for the students served by UT and to avoid conflicts or the appearance of conflicts of interest.
- UT is prohibited from receiving anything of value from any lending institution in exchange for any advantage sought by the lending institution. This prohibits any inappropriate financial arrangements between lenders and the university and specifically prohibits “revenue sharing” arrangements and opportunity loan pools. Lenders cannot pay to get on the university’s recommended lender list.
- UT employees are prohibited from soliciting or accepting gifts of more than a nominal value from any lender, servicer, or guarantor. This includes a prohibition for financial aid officers and other university officials from trips, catered meals, athletic or entertainment events, etc. paid for by lenders.
- Financial Aid personnel do not participate on lender advisory boards, but may discuss student loan services and products for UT students and parents with lenders.
- The university’s list of recommended lenders must be based solely on the best interests of the students or parents who may use the list, without regard to financial interests of the university. This ensures that lenders will be those the university has determined offer the best loan services and benefits that are compatible with the needs of students/parents and the university’s automated student loan systems. The recommended lender list should be prominently displayed on the campus website.
- The process by which recommended lenders are selected must be fully disclosed to students. The process should be prominently displayed on the campus website. Students should also be informed that they have the right to use a lender of their own choosing. UT will continue to ask students to name their selected lender at the onset of the student loan process for each new borrower and will not select a lender for a first-time borrower. The university will not refuse to certify or delay certification of any loan based upon the borrower’s selection of a particular lender or guaranty agency.
- The university must ensure that employees of lenders never identify themselves to students as employees of the university. No employee of a lender may ever work in or provide staffing assistance to the university’s financial aid office.
- Financial Aid personnel are not to purchase stocks or accept stocks from banks that provide student loans to UT students.
- UT departments and affiliated organizations should not enter into any contractual preferred student loan consolidation arrangement with any lender, servicer, or guarantor.