Types of Student Loans
Federal Direct Loans
Subsidized and Unsubsidized Federal Direct Loans
There are two types of Federal Direct Loans—subsidized and unsubsidized.
- Subsidized means that the U.S. Department of Education pays your interest while you are in school and during any other periods of authorized deferment. However, during periods of repayment and forbearance, you are responsible for the interest on your loan. This type of loan is need based, meaning that your eligibility for this loan will be based in part on your financial need.
- Undergraduate Direct Subsidized loans have a fixed interest rate of 3.73% for loans disbursed between July 1, 2021, and June 30, 2022.
- Unsubsidized means that you are responsible for the interest that accrues from the disbursement date, even while you are in school. This type of loan is not based on your financial need.
- Undergraduate Direct Unsubsidized loans have a fixed interest rate of 3.73% for loans disbursed between July 1, 2021, and June 30, 2022.
- Graduate Direct Unsubsidized loans have a fixed interest rate of 5.28% for loans disbursed between July 1, 2021, and June 30, 2022.
These loan payments are deferred while you are enrolled in school. However, once you graduate or fall below a half-time credit load (undergraduate, 6 quarter credit hours per semester; graduate, 2 or 4 quarter credit hours depending on your program), you will enter into a “grace” period of 6 months before your repayments begin. Once this period has expired, you will be required to begin making payments on your student loans.
Important Direct Loan information is also accessible on the U.S. Department of Education Federal Student Aid website.
Graduate PLUS Loans
Graduate PLUS loans are only available to graduate students who are enrolled at least half-time and who meet all the eligibility requirements for federal student aid programs. Graduate PLUS loans have a fixed interest rate of 6.28% for loans disbursed between July 1, 2021, and June 30, 2022. These are fixed interest rates for the life of the loan.
You can visit https://studentaid.gov/understand-aid/types/loans/interest-rates to review the Graduate PLUS loans fixed interest rate for the current award year.
Students are responsible for repaying Graduate PLUS loans while they are enrolled in school but have the option to defer payments as long as they remain in at least a half-time status. Interest on the loan will continue to accrue while the student is in school and during any period of forbearance or deferment. Students also have a number of repayment options available to them based on their individual borrower needs.
For more information on Direct PLUS Loans, visit the Federal Student Aid site.
Parent PLUS Loans
Parent PLUS loans are only available to the parent(s) of a dependent undergraduate students enrolled at least half-time and who meet all the eligibility requirements for federal student aid programs. Parents who intend to apply for a Parent PLUS loan, will need to complete the PLUS request process and sign a PLUS MPN on the Federal Student Aid website. Please see below for details on completing the MPN.
Parents are responsible for repaying Parent PLUS loans once the loan is fully disbursed but have the option to defer payments as long as their child remains enrolled in at least a half-time status. Interest on the loan will continue to accrue while the student is in school and during any period of forbearance or deferment. Parents have a number of repayment options available to them based on their individual borrower needs. Parent PLUS loans have a fixed interest rate of 6.28% for loans disbursed between July 1, 2021, and June 30, 2022.
You can visit https://studentaid.gov/understand-aid/types/loans/interest-rates to review the Parent PLUS loans fixed interest rate for the current award year.
Parent Eligibility Requirements for a Direct PLUS Loan
A parent must be the student's biological or adoptive parent or the student's stepparent if the biological or adoptive parent has remarried at the time of application. The child must be a dependent student who is enrolled at least half-time at a school that participates in the Direct Loan Program.
For financial aid purposes, a student is considered "dependent" if he or she is under 24, unmarried, and has no legal dependents at the time the Free Application for Federal Student Aid (FAFSA) is submitted. If a student is considered dependent, then the income and the assets of the parent have to be reported on the FAFSA.
Dependent students will not be required to submit Parent documents (PLUS Credit decision, PLUS MPN) if any of the following exceptions apply:
Exceptions for Dependent Students
- Student is a non-Title IV recipient (GOK, cash pay, 100% tuition reimbursement, 100% tuition assistance, military, scholarship recipient, or international student).
- Student has a parent who was denied the Parent PLUS loan and a credit decision exists on file.
- Students who are seeking a Professional Judgment: Dependency Override will need to have all required professional judgment documents on file.
Interest on PLUS Loans
Unpaid interest accumulates while the student is in school or in any deferment or grace period, and is added to the principal balance at the end of the grace period, deferment period, or forbearance period.
For example, if $1,000 is borrowed and there is $50 in unpaid interest, that $50 is added to the $1,000 at the end of the grace period. Thus, the principal balance will become $1,050 and interest will then accumulate on that amount. Both graduate students and parents of dependent students have the option to pay the interest while the student is in school to avoid having the unpaid interest amount added to the principal balance.
When applying for a loan, it is important to know the rights and responsibilities of a student borrower. Both graduate students and parents of dependent students must understand the seriousness and importance of the repayment obligation being assumed on the loan.
Master Promissory Note
About the Master Promissory Note
The Master Promissory Note (MPN) is a binding contract. The document states your obligation to repay your financial aid loans. The MPN can be used for both subsidized and unsubsidized loans and for one or more academic years (up to 10 years).
- Visit the Federal Student Aid website to complete your MPN.
- Under "Select the type of Direct Loan MPN you would like to preview or complete," choose "MPN for Subsidized/Unsubsidized Loans."
- Log in and complete the student authentication process. Please have your FSA ID ready.
- Provide the required school information: Select INDIANA for the school location and select PURDUE UNIVERSITY GLOBAL, 2550 NORTHWESTERN AVENUE, SUITE 1100, WEST LAFAYETTE, IN 47906-1332
- Read the borrower's rights and responsibilities.
- You must provide the names of verifiable references who do not live in your household. Do not leave anything blank.
- Avoid clicking on the "Back" button when completing this form.
Loan Simulator and Repayment Schedule
The Department of Education Federal Student Aid website provides a Loan Simulator calculator that students can use to estimate monthly repayment amounts for their federal student loans. Access the Financial Aid Information guide to view a sample repayment schedule.
Student Loan Assistance
Students experiencing difficulty repaying their student loans can speak to Purdue Global’s advisors, who will review their situation and explain the loan management options available for their specific circumstance. Students can contact student assistance at 855-875-7430 or email@example.com.
Loan Deferments for Borrowers
A loan deferment temporarily postpones payment on a loan (allowed under certain conditions), during which interest generally does not accrue. To be eligible, students must be enrolled in a degree or certificate program and participate in a minimum number of credits. Students must submit a request for a deferment to loan servicers and will need to complete an In-School Deferment Request Form provided on Purdue Global Campus to the Registrar’s Office. Student borrowers can visit the Federal Student Loan website for more information.
Loan deferment terms and conditions are further defined for those under the Domestic Volunteer Service Act as well as for those who serve in the Peace Corps or as a volunteer for a tax-exempt organization of demonstrated effectiveness in community service. These individuals should contact the Student Finance Office for additional information.
National Student Loan Data System
The National Student Loan Data System (NSLDS) is the U.S. Department of Education’s central database for federal student aid. The Department of Education’s website, studentaid.gov, provides aid recipients with a centralized view of federal student aid loans and grants from schools, guaranty agencies, and Department of Education programs.