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Summer 2013 Financial Aid Newsletter for Families

Federal Loan Changes for 2013-14 and Beyond

The Federal loan changes listed below are effective as of July 1, 2013.

The Federal Subsidized Stafford Loan interest rate doubled from 3.4% to 6.8%. The interest rate was temporarily lowered to 3.4% by Congress for the 2011-12 and 2012-13 academic years, but currently no further legislature has been established to extend the timeframe. The Federal Unsubsidized Stafford Loan interest rate remains at 6.8%. Federal Parent and Graduate PLUS Loans have an interest rate of 7.9%, unchanged from previous years. All interest rates are fixed.

Loan origination fees also increased. Stafford Loans now have 1.051% fees (previously 1.0%), and Parent and Graduate PLUS Loans have 4.204% fees (previously 4.0%). Students and families are encouraged to use the loan fee calculator on our website at www.purdue.edu/dfa/loans/calculator.php to assist in determining how much will be reduced from the accepted or requested amount due to loan fees. They can also see how much they need to borrow to offset the loan fees, if a specific net amount is needed to credit the bill.

First-time borrowers will have eligibility for Federal Subsidized Stafford Loans limited to a period of 150% of the educational program length. A student enrolled in a Bachelor’s degree will have no more than 6 years of Subsidized Stafford Loan eligibility due to being in a 4-year program. An annoucement from the Department of Education provides a more in-depth explanation and examples at http://www.purdue.edu/dfa/loans/Subsidized-Eligibility-Time-Limitation.pdf.

How to Set a Budget

One of the more over-looked responsibilities of being a college student is the need to properly budget your money. See below for an explanation of direct and indirect costs that you will incur and how to calculate a budget for the coming academic year.

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State Aid Changes for 2013-14 and Beyond

Click below to read about the upcoming changes to the aid programs provided by the state of Indiana. Their overall goal is to save the state money by encouraging students to earn their degrees in 4 years or less. Students will need to understand the new rules, or risk losing thousands of dollars in need-based aid.

+ Click here to see more.