Florida Department of Financial Services Facebook Florida Department of Financial Services Twitter

Student Loans

Student Loan Debt Now More Transparent Student Debt Relief Scam

Effective July 1, 2017, Florida colleges and universities that disburse state financial aid must provide each student with an annual breakdown of their federal student loan debt.

The breakdown will include:

  • An estimate of the student’s total amount of borrowed student loans.
  • An estimate of the student’s total potential loan repayment amount associated with the total amount of student loans borrowed by the student.
  • An estimate of the student’s monthly loan repayment amount for the student’s total amount of borrowed student loans.
  • The percentage of the borrowing limit that the student has reached at the time the information is provided.
For more information on the requirement, review Senate Bill 396.

Student Debt Relief Scam

The Federal Trade Commission halted an alleged student loan debt relief operation that defrauded millions of dollars from consumers. View the FTC’s site to learn more.

Stafford Loans

The primary student loan available to students and families by the federal government is the Stafford Loan. It comes in two forms:

  • Federal Family Education Loans - These are by private lenders.
  • Federal Direct Student Loans - These are provided by the government directly to students and their parents.

Stafford Loans are either subsidized, meaning that the government pays the interest on them while the student attends school, or unsubsidized. Subsidized loans are advantageous because the student doesn't have to worry about making payments on them until six months after graduation, when a good paying job is more likely. Eligibility for subsidized loans depends on income level and school costs.

Government loans carry maximum limits, which vary according to the area of study, year in college or whether or not the borrower is still a legal dependent of the parents. The loan limits range from $2,000 per year to $40,500 for medical students. The interest rates are currently fixed at 6.8%.

Perkins Loans

For students with high financial need, the government provides Perkins Loans to supplement Stafford Loans. These are subsidized loans, so they don't have to be paid back until nine months after graduation, as long as the student is enrolled in at least a half-time schedule.

As with Stafford Loans, Perkins Loans have maximum limits. Undergraduates may take out up to $4,000 per year, while students in graduate school may receive up to $6,000. The interest rate is currently just 5%.

PLUS Loans

If Stafford and Perkins loans aren't enough, the student's parents may take out an additional loan known as the PLUS Loan. The student must be a legal dependent, and the parents are required to pass a credit check.

PLUS Loans are designed to supplement other grants and loans, so their amounts are determined by subtracting the borrower's total financial aid package from the total cost of school. So if school costs $10,000 per year and the student is receiving $8,000 from other sources, the maximum PLUS Loan would be $2,000.

Interest on PLUS Loans is generally higher, currently at about 8%. They are also not subsidized, so they begin accumulating interest right after the funds are disbursed. The borrower can wait until after graduation to begin repayment, but he or she will have to repay the accumulated interest as well. Under some circumstances, however, such as extreme financial hardship due to disability, the loans can be deferred, during which time interest would not be added.

Borrower Be Aware

A loan is a form of financial aid that is backed by the federal government but must be repaid by the borrower, usually after they have completed college. In some cases, loans can be forgiven such as loan forgiveness for employment in a public service job or for teachers. More information on loan forgiveness programs is available on the U.S. Department of Education’s website – studentaid.gov.