Federal Direct Loan Program

Loans are borrowed funds that must be repaid with interest. You are automatically considered for federal loan funds by completing your FAFSA.

William D. Ford Federal Direct Loan Program

Prescott College participates exclusively in the William D. Ford Federal Direct Loan program in which borrowers obtain Federal Direct, Parent PLUS and GradPLUS loan funds directly from the US Department of Education rather than from private lenders. We believe that the Direct Loan program offers our students and parents a more stable, streamlined, and predictable borrowing experience.

Federal Direct

Federal Direct loans are the most common source of student loan funds made available to students seeking a degree or certificate. Federal Direct Loans must be repaid with interest. Federal Direct Loans offer deferments of principal payments while a student is in school and allow a six-month grace period after leaving school, before repayment begins. Depending on a student's need as calculated by U.S Department of Education, a Federal Direct Loan may be offered as a subsidized or unsubsidized loan, or as a combination of the two.


Subsidized Federal Direct loans are need-based. With a Subsidized Federal Direct Loan the Department of Education will pay the interest while the student is in school and during the grace and deferment periods. The fixed interest rate for Undergraduate loans beginning July 1, 2011 is 3.4%. The fixed interest rate for Graduate loans beginning July 1, 2011 is 3.4%.


All qualified students, regardless of their income or assets, may take out Unsubsidized Federal Direct loans. Students must meet all of the same requirements as those for Subsidized loans, except they do not need to demonstrate financial need. With an Unsubsidized Federal Direct Loan the student is responsible for interest that accrues throughout the life of the loan. A student may elect to defer interest payments while in school; however, this interest will be added to the principal balance of the loan upon repayment. Therefore, we strongly recommend students pay interest on a quarterly basis to keep their loan debt under control. The fixed interest rate for all Unsubsidized loans beginning July 1, 2011 is 6.8%.

Federal PLUS


The Parent PLUS Loan has a fixed interest rate of 7.9% for all loans disbursed after July 1, 2011. Interest will begin to accrue with the first disbursement to the school. Repayment of Principal and interest will begin sixty days after the loan funds are fully disbursed to the school.


The Graduate PLUS loan is a loan program for graduate students that are enrolled at least half-time (6 credits). Borrowers must pass a credit check and may borrow the full "cost of attendance" minus other forms of financial aid received. The interest rate is fixed at 7.9% for loans disbursed after July 1, 2011. Students may apply for deferments while enrolled at least half-time.