Student Loans

What is a "Student Loan?" | Types Available | Repayment Options | Loan Forgiveness/Discharge Options | Additional Resources

What is a “Student Loan?”

A student loan (also known as an education loan) is a financial aid option that allows you to borrow money from either the federal government, private organizations, or higher education institutions to help you pay for college and higher education-related expenses.

Educating yourself about student loans can help to ensure that you make responsible and effective borrowing decisions about funding your education and may also help you to limit the total amount of debt you may have upon leaving college. 

What types of Student Loans are available? 

Federal 

William D. Ford Direct Loan Program

• Direct Subsidized Loans
• Direct Unsubsidized Loans

• Direct PLUS Loans

Who is eligible to apply? 

To receive either type of loan, borrowers must be enrolled at least half-time at a school that participates in the Direct Loan Program. Generally, you must also be enrolled in a program that leads to a degree or certificate awarded by the school.

The chart below details which loans may be available for student borrowers dependent on their grade level:

How do I apply?

Direct Subsidized and Unsubsidized Loans

Students interested in applying for Direct Subsidized and Unsubsidized Loans should complete the Free Application for Federal Student Aid (FAFSA).  Your school will determine your eligibility for each type of loan and the total amount that you are eligible to borrow.

Direct PLUS Loans

Graduate and professional students interested in applying for Direct PLUS Loans will need to complete the FAFSA and a credit inquiry.  Direct PLUS Loans are available to help cover education expenses not covered by other financial aid options.  If you have educational expenses that are not covered by other financial aid options, you may complete a credit inquiry to determine your eligibility for a Direct PLUS Loan.  If approved, your school will determine the total amount of Direct PLUS Loan funding that you may borrow.

Parent PLUS loan options are listed on our Parent Loans page.

What is the interest rate for Direct Loans? 

The interest rates listed below are for Direct Loans first disbursed on or after July 1, 2024 and before July 1, 2025.  These interest rates are fixed over the life of the loan.

State

Connecticut Higher Education Supplemental Loan Authority (CHESLA)

CHESLA is a quasi-public state authority created to help students and their families finance the cost of higher education.  CHESLA serves as an alternative source of loan funds for:

• Students in or from the State of Connecticut who do not qualify for need-based loans (Direct Subsidized Loans),
• Need to borrow more than the maximum amounts provided by other loan programs, OR
• Seek other loan options and services.

CHESLA Loans are not federal loans and are not regulated by the Department of Banking.

What is the interest rate for CHESLA? 

The loan rate for MyCHESLA Student Loan for the 2024-2025 Academic Year is 6.45%.

Private 

Private education loans are offered by private organizations/lenders such as banks, credit unions, schools, and state-based or state-affiliated organizations. Eligibility criteria and terms and conditions for private loans are determined by the lender.  We recommend thoroughly reviewing the criteria with each lender. 

What repayment options are available?

Federal

There are currently seven repayment plan options for federal student loans. Federal student repayment plans fall into one of two categories:

Fixed Payment Repayment Plans

Fixed Payment Repayment Plans base your monthly payment on how much you owe, your interest rate, and a fixed repayment.  Currently, there are three Fixed Payment Repayment Plans:

• Standard – All student loans default to this plan
• Graduated
• Extended

Income Driven Repayment (IDR) Plans

Income driven repayment (IDR) plans calculate your monthly payment amount based on income and family size. Currently, there are four IDR plans available:

• Saving on a Valuable Education (SAVE) Plan – formerly REPAYE
• Pay As You Earn (PAYE)
• Income-Based Repayment (IBR)
• Income-Contingent Repayment (ICR)

Need help deciding on a plan?

Loan Simulator on Federal Student Aid helps you choose a loan repayment option that best meets your needs and can also help you decide whether to consolidate your student loans into a Direct Consolidation Loan.

Private

Private loan repayment options are determined by the lender.  Please contact your lender directly for available options.

What Loan Forgiveness/Discharge options are available for Student Loans? 

Federal

Public Service Loan Forgiveness (PSLF)

PSLF is the forgiveness program most used by people to have their loans forgiven. If you are employed by a government or non-profit, the program may forgive the remaining balance after meeting certain requirements.

Qualifying for PSLF

To qualify, you must:

• Be employed by a U.S. federal, state, local, or tribal government or qualifying not-for-profit organization
• Work full-time for that agency or organization
• Have Direct Loans, or consolidate other federal student loans into a Direct Loan
• Repay your loans under an income driven repayment plan or 10-year Standard Repayment Plan
• Make a total of 120 qualifying monthly payments

Source: Federal Student Aid

Additional federal loan forgiveness/discharge options and requirements can be found at Federal Student Aid.

Private 

Private loan forgiveness/discharge options are determined by the lender.  Please contact your lender directly for available options. 

Additional Resources

Please review our Student Loan Repayment Guide for an in-depth breakdown of helpful information for anyone seeking more information on student loans.