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Types of aid: Loans

Loans are borrowed funds that you have to repay, usually after you graduate. Either you or your parents can take out an education loan, but there are different programs for students and parents.

If your family is considering an educational loan, we suggest you begin by applying for financial aid, since often the most affordable loans are student loans based on need.

We talk more about the kinds of loans below, but some important things to know are:

  • Federal loans are restricted to U.S. citizens or permanent residents, but other loan programs are not.
  • Some loans, referred to as subsidized loans, do not accrue interest while you are in school.
  • Meanwhile, unsubsidized loans do accrue interest that may be paid while you are in school, or added to your principal balance when you graduate.

Learn more about loans from the U.S. Department of Education. To apply for a loan, fill out the Loan Request Form. If you have any questions about your specific loan eligibility, please contact us at getaloan@mit.edu.

Need-based loans

Federal Direct Stafford Subsidized Loan (for U.S. students)

  • You can borrow up to $3,500 your first year, $4,500 your second year, and $5,500 your third and fourth years.
  • No interest until six months after you graduate or your enrollment drops below half time. Check studentaid.ed.gov for interest rates.

MIT Technology Loan (international undergrads only)

  • No co-signer needed for loans up to $3,400. Loans over $3,400 need a creditworthy co-signer.
  • Students must be enrolled at least half time, make academic progress, and not default on any prior education loans.
  • Repayment begins nine months after graduation or withdrawal, but may be deferred while in graduate or professional school.
  • No interest until repayment begins, 7% interest afterward.
  • Minimum monthly repayment is $50. Loan must be repaid in 10 years.

Loans not based on need

There are other loans that you can apply for that don’t have financial need guidelines in order to qualify.

Federal Direct Stafford Unsubsidized Loan (for U.S. students)

  • Can borrow up to $5,500 your first year, $6,500 your second year, and $7,500 your third and fourth years. These annual loan limits include amounts borrowed under a Federal Direct Subsidized Stafford Loan.
  • Check studentaid.ed.gov for interest rates.
  • Interest accrues while you are in school. We advise you to make interest payments, if possible, while in school. If you choose not to, your interest will be added (or capitalized01 The addition of unpaid interest to the principal balance of a loan.   ) to your balance when you begin to repay it.
  • Students who are considered federally independent or whose parents are declined a PLUS Loan (see below) may borrow an additional $4,000 per year for their first and second years and $5,000 per year for their third and fourth years.

Federal Direct PLUS Loan (U.S. parents only)

  • This can be a good way to spread your education expenses over time.
  • Parents may borrow up to the total price of education, minus any student financial aid, including student loans. Check Direct Loans for more information and current interest rates.

Private Loans

Private loans come from third-party lenders and can be taken out by you or your family.

Only consider private loans when all of your federal eligibility is exhausted. The terms and conditions and interest rates of private loans are often less favorable. Before certifying any private loan that you may take out, our loan counselors will connect with you directly to discuss the implications and terms of the loan.

If you have questions about your eligibility or how to maximize the amount of money that can be applied to your student account, send us an email and we will be happy to help!

Additional resources

Read our Guide to Private Loans if you have any questions.

  1. The addition of unpaid interest to the principal balance of a loan. back to text