Student Loans For Yale: Is It Possible?

Yale University offers a range of student loan options for both undergraduate and graduate students. The university is committed to ensuring that a Yale education is accessible to all students, regardless of financial background, and offers a need-blind admissions process and need-based financial aid. Yale meets 100% of demonstrated financial need for all admitted students, including undocumented students living in the US, and does not include loans in its financial aid awards. However, students and their families may opt to take advantage of various loan options to cover their net costs. These include federal loans, Yale loans, and private loans from banks or other financial institutions.

Federal Direct Student Subsidized Loan

The Federal Direct Student Subsidized Loan is a guaranteed loan for undergraduates who are US citizens or permanent residents and have demonstrated financial need as determined by federal regulations.

Eligibility

To be eligible for the loan, you must:

• Be a US citizen or permanent resident
• Be enrolled at least half-time in an undergraduate degree program
• Maintain satisfactory academic progress
• Not be in default on a federal student loan
• Demonstrate financial need

Interest and Repayment

The interest rate is fixed at 6.533% for loans disbursed on or after July 1, 2024, through June 30, 2025. There is also a 1.057% origination fee for loans first disbursed from October 1, 2020, through September 30, 2024. No interest is charged while a student is in school at least half-time and during deferment periods. There is a six-month grace period; the timeframe depends on the type of repayment plan.

Application Procedure

New borrowers will be notified to complete the Direct Loan Master Promissory Note once Yale originates the loan with the Department of Education. They will also be required to complete the Federal Loan Entrance Counselling Session, which is mandatory for all first-time borrowers.

Federal Direct Unsubsidized Student Loan

A Federal Direct Unsubsidized Student Loan is a guaranteed loan for U.S. citizens or permanent residents who do not show financial need under federal regulations. Direct Unsubsidized Loans are available to both undergraduate and graduate students.

Eligibility

To be eligible for a Federal Direct Unsubsidized Student Loan, you must:

• Be a U.S. citizen or permanent resident
• Be enrolled at least half-time in a degree program
• Maintain satisfactory academic progress
• Not be in default on a federal student loan

Interest and Fees

The interest rate for the 2024-2025 academic year is fixed at 6.533% for undergraduates and 8.08% for graduate students. There is also an origination fee of 1.057% for loans first disbursed from October 1, 2020, through September 30, 2025. Interest accrues on these loans as soon as they are disbursed, and students are responsible for interest payments while in school.

Loan Amounts

The federal government sets limits on the amount of Direct Unsubsidized Loans that a student may be eligible to receive in each academic year and in total. These limits vary based on whether the student is pursuing an undergraduate or graduate degree, among other factors.

Application Procedure

To apply for a Federal Direct Unsubsidized Student Loan, you will need to complete the Free Application for Federal Student Aid (FAFSA) or Renewal FAFSA (for returning students) at StudentAid.gov. Once you have received your financial aid award letter and accepted your financial aid, you will need to sign any associated paperwork, such as the Master Promissory Note (MPN).

Yale Graduate and Professional International Loan

The Yale Graduate and Professional International Loan is a financial aid option for international students who do not qualify for US federal or Canadian student loans. The loan is available to students in the Graduate School of Arts and Sciences and in some professional schools, although not all professional schools offer this loan.

The Yale Graduate and Professional International Loan amount cannot exceed the cost of attendance minus any other financial assistance received. However, each participating school determines the loan limit for its students. Interest begins to accrue upon disbursement of loan funds, and students are responsible for interest payments while in school. Students have the option to pay interest monthly or to capitalise the interest by allowing it to accrue and adding it to the principal when the loan goes into repayment.

There is a six-month grace period, with a maximum repayment term of 10 years and a minimum monthly payment of $50.

To apply for the loan, students in the Graduate School should visit the Graduate School of Arts and Sciences website for additional information. Professional school students should contact their school's financial aid office for information on loan availability and application procedures.

Federal Direct PLUS Loan

The Federal Direct PLUS Loan is one of the four types of federal student loans issued by the Department of Education. The other three are Direct Subsidized, Direct Unsubsidized, and Direct Consolidation Loans. PLUS Loans are further divided into two categories: Grad PLUS and Parent PLUS.

Grad PLUS Loans

Grad PLUS Loans are specifically for graduate or professional students enrolled at least half-time in an eligible school, and their program must lead to a graduate or professional degree or certificate.

Parent PLUS Loans

Parent PLUS Loans are for parents of undergraduate students. The parent will take out a loan in their name to pay for their child's education, and the parent is the only person legally obligated to repay the loan. The child has no obligation to repay the Parent PLUS Loan.

Eligibility for Federal Direct PLUS Loan

To be eligible for the Federal Direct PLUS Loan, you must be a US citizen or permanent resident and have no adverse credit history. The loan is unsubsidized, meaning interest begins accruing immediately after disbursement. The federal government does not pay the interest on this loan.

Interest Rates on Federal Direct PLUS Loan

The interest rates on Federal Direct PLUS Loans are fixed rates that change only for new loans each July 1. The new interest rate is based on the last 10-year Treasury Note Auction. The interest rates are the same for both Federal Parent PLUS Loans and Federal Grad PLUS Loans.

Loan Fees on Federal Direct PLUS Loan

Loan Limits on Federal Direct PLUS Loan

Repayment Options for Federal Direct PLUS Loan

Repayment options for Federal Direct PLUS Loans vary depending on whether it is a Grad PLUS or Parent PLUS Loan.

For Grad PLUS Loans, borrowers are eligible for all federal repayment plans, including all of the income-driven repayment (IDR) plans.

Parent PLUS Loans are more restrictive. In their current state, they are not eligible for IDR plans, nor can borrowers qualify for Public Service Loan Forgiveness (PSLF). However, there is a workaround. Borrowers with Parent PLUS Loans can consolidate with a Direct Consolidation Loan. Once the loan is consolidated, they become eligible for one of the IDR plans – income-contingent repayment – and can work toward PSLF.

Private loans

Yale University offers financial aid to its students to ensure that a Yale education is accessible to the most talented students from around the world, regardless of family income. Yale's financial aid policies ensure that 100% of every undergraduate's demonstrated need is met with a package that does not include loans. However, students and their families may opt to take advantage of their eligibility for education loans as an alternative route to paying their net cost.

It is recommended that families in need of additional funding for educational expenses first consider all potential outside scholarships, federal grants, work-study funds, and federal loans before taking out a private loan. Private loans should be used sparingly, and students and families are advised to contact Yale's Undergraduate Financial Aid office with any questions or to discuss their particular situation.

Yale's Student Loan Billing and Payment Office is responsible for the management and collection of Federal Perkins Loans, Yale Student Loans, and Health Profession Loans. All payments must be made in US dollars drawn on a US bank. University Accounting Services, LLC (UAS) is the billing service for Yale University's student loan programs.

Frequently asked questions