Using Federal Funds for Your Education

Federal aid is available to help manage the costs of higher education. Eligibility requirements state that in order to receive federal financial aid, you must:

  • Be a U.S. citizen or eligible non-citizen
  • Have a valid Social Security Number
  • Not have a drug conviction for an offense that occurred while you were receiving Federal Student Aid (such as grants, loans, or work-study)
  • Register with Selective Service if you are male and 18 to 25 years of age
  • Have a high school diploma or a General Education Development (GED) Certificate or pass an exam approved by the U.S. Department of Education
  • Be enrolled in a degree-seeking program
  • Not be in default on a Federal student loan and not owe a refund on any state or federal educational grant.
  • Not exceed the annual or lifetime aggregate award limits in Federal Stafford Subsidized and Unsubsidized loans as determined by Federal regulations. The lifetime limit is $31,000 for dependent bachelor's students, $57,500 for independent bachelor's students, and $138,500 for graduate students.
  • Not be incarcerated, which includes serving a criminal sentence in a federal, state, or local penitentiary, prison, jail, reformatory, work farm, or similar correctional institution. A student is not considered to be in a half-way house or home detention or is sentenced to serve only weekends.

 

Thanks to their extensive training in financial aid planning, Capella enrollment counselors can provide you with valuable insight and answer all of your questions about eligibility and options for financing your education. Contact an enrollment counselor at 866.808.8681 or email us.

Types of Federal Loans

Federal Stafford Loan Program

There are 2 types of Stafford loans available. Both loans require a 2–3% bank origination and guarantee fee.

  • Subsidized Stafford Loans are awarded based on financial need. The government pays the interest —at a fixed rate of 6.8%— while you are in school. These loans are only available for eligible bachelor's students.
  • Unsubsidized Stafford Loans have no financial need requirement. Interest is added to your loan —at a fixed rate of 6.8%— while you are in school. These loans are available for all eligible students.

 

Learn more about Stafford Loans.

Federal Graduate PLUS Loan Program

Master's, doctorate, and certificate students can use PLUS loans to bridge the gap between other financial aid and full tuition. The Graduate PLUS loan has a fixed interest rate, and repayment can be deferred until after graduation.

Learn more about Graduate PLUS Loans.

Federal Graduate Parent PLUS Loan Program

Parent PLUS loans offer additional federal funding options for undergraduate, dependent learners. Parent PLUS loans are non-need and credit-based loans. Eligible parents of the dependent learner will need to submit an application.

Learn more about Parent PLUS Loans.

The Federal Financial Aid Process

Your financial aid application can be completed as you apply for admission or after you have submitted your application. Our online application will show you how to apply for federal financial aid and other awards.

Learn how to apply.

Your federal financial aid award is based on the information you provide on the Free Application for Federal Student Aid (FAFSA). Eligibility is determined using a formula that includes your expected family contribution and the estimated yearly cost of attendance at Capella, including tuition, fees, books, and supplies.

Your federal financial aid award will be determined after:

  • You are admitted to a degree or certificate program.
  • You have submitted all the necessary documents to complete your financial aid file.
  • You meet all eligibility requirements.

 

After you submit all necessary financial aid documents and accept your financial aid award, you can use our Financial Aid Book Allowance program, which applies a credit to your account at Capella's online bookstore using your anticipated financial aid refund amount. You can use the credit to purchase books before the start of your course.

You may use the financial aid money you receive only to pay for education expenses at the school that awarded your loan. Education expenses include tuition, room and board, fees, books, supplies, equipment, dependent child care expenses, transportation, and rental or purchase of a personal computer.

Federal Financial Aid Limits

Federal Financial Aid Limits: Graduate Students

You must be enrolled at least half-time to receive federal financial aid.

Maximum Annual Loan Amount Maximum Aggregate Loan Limit
$20,500 unsubsidized* $138,500

Eligibility and award amounts are reviewed annually by the Office of Financial Aid.

Federal Financial Aid Limits: Bachelor's Students

You must be enrolled at least half-time to receive federal financial aid.

Independent Bachelor's Student

Aid Type Yearly Limit
1st year Stafford loans
(0-45 credits)
$9,500 (max of $3,500 subsidized)
2nd year Stafford loans
(46-90 credits)
$10,500 (max of $4,500 subsidized)
3rd-5th year Stafford loans
(91+ credits)
$12,500 (max of $5,500 subsidized)
Pell Grant Amounts
(all credit levels)
Maximum of $5,550
Lifetime Aggregate Totals $57,500 ($23,000 in subsidized)

Eligibility and award amounts are reviewed annually by the Office of Financial Aid.

Dependent Bachelor's Student

Aid Type Yearly Limit
1st year Stafford loans (0-45 credits) $5,500 (max of $3,500 subsidized)
2nd year Stafford loans (46-90 credits) $6,500 (max of $4,500 subsidized)
3rd-5th year Stafford loans (91+ credits) $7,500 (max of $5,500 subsidized)
Pell Grant Amounts (all credit levels) Maximum of $5,550
Lifetime Aggregate Totals $31,000 ($23,000 in subsidized loans)

Eligibility and award amounts are reviewed annually by the Office of Financial Aid.

*We are participating in a project with the U.S. Department of Education that may limit your eligibility for the full amount of Direct Unsubsidized Loans. HEA Section 479A(c) and 34 CFR 685.301(a)(8), to the extent that it only allows a case-by-case reductions in Direct Unsubsidized Loan amounts, and only to the extent that the participating institution reduces a student's Direct Unsubsidized Loan eligibility not less than $2,000.

Disbursements and Refunds

Lenders begin disbursing loan funds late in the third week of courses for students who are enrolled at least half-time, have posted in the course room during the first week, and who have met all other aid eligibility requirements. After applying the funds to your outstanding balance, Capella will refund any remaining funds to you.

MBA Students

Your loan funds are disbursed for each 6-week session in which you are taking courses, rather than once for the entire quarter.

Loan Management & Repayment

There are a variety of repayment plans available once you enter repayment. Your estimated monthly repayment amount will be based on your total loan amount and your repayment plan. Work with your lender to find the plan that best fits your budget and then make timely payments each month. Learn more about student loan repayment.

  • Make interest-only payments on your student loans while you are in school to save money in the long run.
  • Take advantage of tax benefits or incentives that are associated with your tuition and/or student loans.
  • Estimate the amount of debt you can afford. Use the repayment calculator to figure how much you will need to make your monthly loan repayments once you graduate.
  • Contact your lender if you are struggling to make loan payments. It is critical that you communicate your situation with your lender so that you can make appropriate arrangements that will protect your credit score.
  • Stay on schedule. Repaying a student loan on time can create and build an excellent credit history.
  • Prepay your student loans if possible. You will not incur any penalties and you will save on the total interest due.

Learn more about managing your student loans.

We Are Here to Help

Capella provides support to keep students and alumni on track, academically and financially. We offer in-depth financial aid counseling as well as online resources like webinars, financial calculators, and more. Contact us at 1.866.808.8681 or via with questions or concerns about financial aid and loan repayment.