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Loans Available for US Financial Aid

Trees flowering on campus

The following loans are available through the University of Otago:

US Department of Education (DOE)

Direct Loan Subsidized

This loan is based on financial need. The loan is "subsidized" because the government pays the interest while you are attending university at least half time. Please note that international students are required to be studying full-time in New Zealand. Repayments on Direct Subsidized Loans start following a six month grace period after you leave university or drop below half time enrolment.

Important Information for Graduate Students

Direct Loan Unsubsidized

This loan is not based on financial need. Because it is "unsubsidized", you are responsible for paying the interest from the time the money is disbursed.

 Further information on Direct Loans is available via these links to external websites:

Course of Study

Bachelor, Master and Doctoral programmes are eligible to receive US Financial Aid.

All other programmes are not eligible; including:
Postgraduate Diplomas; Diploma for Graduates or Graduate Certificates; Graduate Diplomas or Postgraduate Certificates; Undergraduate Certificates; Certificate of Proficiency; University of Otago Foundation Year Programme and Language Centre courses.

Please note that medical programmes are currently NOT eligible.

Once a student’s eligibility for Direct Loans has been confirmed and if after the completion of course approval and in consultation with senior academics, it is recommended that a student change their course of study to another qualification, they may become ineligible for Direct Loans and may have to finance their study either through a Private Loan or other private funding. Your Cost of Attendance will also have to be recalculated.

If a student’s intended course of study is charged at a New Zealand domestic rate and in consultation with an adviser of studies, it is recommended that a student changes their course of study to a programme which is charged at an international rate, the Cost of Attendance will need to be reassessed. If your financial aid does not cover your tuition fees, you will be advised.

Federal PLUS

There are two types of PLUS loans: Parent PLUS and Graduate PLUS. These loans are not based on financial need, and can be up to the Cost of Attendance (COA) minus all other Aid.

Parents of Dependent Students

Parents of dependent undergraduate student can borrow this loan to meet the study costs of their child. Applicants are subject to a credit check and must give permission before any funds can be disbursed to students to meet living costs. There is no deferment or grace period and parent borrowers must start repayments once the funds are disbursed.

Further information on Parent PLUS

The process of applying for a Parent PLUS loan is not completed until the institution submits the PLUS Loan origination record to the Common Origination and Disbursement (COD) website of the US Department of Education. This will not take place until the student has completed course approval.

When the parent signs the MPN, they are also agreeing to have their credit reviewed. If the parent’s credit is approved, the approval is only valid for 90 calendar days. If COD does not receive and accept a PLUS loan origination record from the institution in that timeframe, the parent must have another credit review.

Graduate Students

Graduate students may borrow this loan on their own behalf, after applying for other financial aid.

This loan does go through a credit check process. This review looks for bad credit only. You do not have to meet other financial standards as with other private alternative loans. Repayments can be deferred whilst in school, but start immediately once students leave university or drop below half time study.

Further information on Grad PLUS

Dependent vs. Independent student

A student's dependency status is determined from information provided on the FAFSA. It affects the Expected Family Contribution (EFC) and types of aid that you may be eligible to receive.

A student is considered independent if he or she meets one or more of the following criteria:

  • The student is at least 24 years old by December 31 of the award year;
  • The student is an orphan or ward/dependent of the court, or was a ward/dependent of the court until he or she reached age 18;
  • The student is a veteran of the U.S. Armed Forces;
  • The student is working on a master's or doctorate program at the beginning of the award year for which the FAFSA is completed;
  • The student is married as of the date the FAFSA is completed;
  • The student has at least one child who receives more than half of his or her support from the student;
  • The student has a dependent, other than a spouse or a child, who lives with the student and receives more than half of his or her support from the student at the time the FAFSA is completed and through June 30 of the award year.

You are considered dependent if you do not meet any of the preceding criteria for an independent student unless the Financial Aid Section determines that you are independent on the basis of special circumstances.

Download the Dependency Override Application Form (PDF)

Other US Department of Education Aid

Perkins Loans and Pell Grants cannot be awarded whilst students are studying outside the US.

You are eligible to apply for a deferment on repayment of these loans whilst you are attending Otago on a full-time or more than half-time basis.

Please contact the Financial Aid Section in the International Office for assistance.

Current Interest Rates

Information on current interest rates for US Department of Education loans

Private Loans

Students can apply for private loans to cover any unmet financial need that is not covered by loans, grants or scholarships.

Private Education Loans are offered by private lenders and while they are outside the Federal Loan Programme they usually mirror the same loan criteria. Students can use private education loans to borrow the difference between their US Financial Aid and their Cost of Attendance net of other education related income.

Private Education Loans are particularly useful for students who do not meet the eligibility criteria for PLUS loans such as Independent Undergraduate students.

Private education loans are available from private non-government lenders and approval is based on credit history. Students at University of Otago can use private education loans to borrow the difference between the maximum cost of attendance and any federal or other loans/scholarships borrowed. We strongly recommend that students first apply for federal loans and then apply for additional funds through a private education loan if required. Federal loans are more favourable due to the lower interest rates and other associated benefits.

The decision on which private loan provider to use is entirely your choice, so it is important that you research carefully to find the best conditions that suit you.

Please note for the student visa application that you must show proof of funds to cover your tuition and other living expenses. The University of Otago only approves your federal loans and will issue a letter detailing the approved amounts for student visa purposes. If you plan to borrow a private loan to help cover your tuition fees or living expenses, you will need to contact your private loan provider to supply this evidence for student visa purposes.

Available Private Education Loans

US Department of Veterans Affairs (DVA)

Otago is an eligible institution enabling eligible veterans and their dependents to utilize their grant funds at this institution.

Veterans or eligible family members may be eligible to utilize a mix of DVA and DOE funding.

Department of Veterans Affairs website

Contact us

For all enquires about US Financial Aid at the University of Otago, please contact: