Type of Loans

Federal Direct Loans

These are federal loans borrowed directly from the federal government; they do not come from a bank or other lending institution, nor from your school. You sign a Master Promissory Note when you take out these loans as an official promise to pay back the federal government.

Dental school students starting their program on or after July 1, 2026, can access only one federal direct loan: direct unsubsidized.

Federal loans typically make up a large portion of a dental school student’s loan portfolio.

Direct Unsubsidized Loan

Special Note: New annual and aggregate loan limits go into effect for borrowers starting their degree program on or after July 1, 2026.

• Annual amount: $50,000 per year
 
• Aggregate loan limit: $200,000 inclusive of any graduate school borrowing
 
• Lifetime loan limit: $257,500 inclusive of both graduate and undergraduate borrowing
 
• Interest rate: Current rate is a fixed 8.07% for the life of graduate loans disbursed on or after July 1, 2026. Note: The interest rate on Direct Unsubsidized Loans will change annually on new loans disbursed on or after July 1 of each year.
 
• Terms: These loans accrue interest during school and the six-month grace period following graduation before they come due. They are eligible for repayment with both time-driven and income-driven repayment plans and are eligible for forgiveness with the Public Service Loan Forgiveness (PSLF) program.
 
• Consolidation: These loans are eligible for the federal Direct Consolidation Loan program. However, many recent graduates find they do not need to consolidate them since their rates are fixed and they usually have one loan servicer, meaning they can make one payment against all of their loans.
 
• Credit: These loans are not based on credit.

Health Professions Student Loan (HPSL)

These are federal loans from the Department of Health and Human Services (called Title VII) awarded by the health professions school or dental school and are based on exceptional financial need. (Contact your health professions school or dental school financial aid office regarding availability and application.)

• Interest rate: There is a 5% fixed rate for the life of the loan.
 
• Terms: These loans are interest-free during school and the 12-month post-graduation grace period. Repayment is generally over 10 years with level payments. HPSLs are not eligible for repayment with income-driven repayment option plans and are not eligible for forgiveness.
 
• Consolidation: These loans are eligible for the federal Direct Consolidation Loan program, which would then make the balance eligible for repayment with income-driven repayment plans and forgiveness.

Loans for Disadvantaged Students

These are similar to an HPSL but are awarded specifically to students from disadvantaged backgrounds. (Contact your institution’s FAO regarding availability and application.)

Private Loans

Due to the elimination of Grad PLUS loans for borrowers starting their degree program on or after July 1, 2026, we anticipate many dental students needing to borrow private loans to help cover their expenses.

In general, private loans have limited repayment and postponement options when compared with federal loans. Always speak with your FAO before applying for a private loan.

• Interest rate: Rates may be variable or fixed, depending on the lender, with lower rates usually reserved for borrowers who secure a creditworthy cosigner.
 
• Terms: These are unsubsidized loans with annual and cumulative caps on borrowing amounts. These loans are based in part on a borrower being “creditworthy,” with a borrower’s credit score considered in both approval and pricing. Private loans are not eligible to be repaid with income-driven repayment plans and are not eligible for forgiveness, including PSLF.
 
• Consolidation: Private student loans are not eligible for the federal Direct Consolidation Loan program.