CLICK HERE FOR DIRECT LOAN APPLICATION INSTRUCTIONS
Low-interest student loans are available from the U.S. Department of Education; these are called Direct Loans.
Types of Direct Loans
- SUBSIDIZED: for students with demonstrated financial need, as determined by federal regulations. No interest is charged while a student is in school at least half-time, during the grace period, and during deferment periods.
- UNSUBSIDIZED: not based on financial need; interest is charged during all periods, even during the time a student is in school and during grace and deferment periods.
- PLUS: unsubsidized loans for the parents of dependent students. PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest is charged during all periods.
Loan Limits
The maximum amount you can borrow each year in Direct Subsidized and Unsubsidized Loans depends on your grade level and on whether you are a dependent student or an independent student. The following table shows the maximum amount of money you may borrow each academic year in Direct Subsidized and Unsubsidized Loans:
|
|
Dependent student1 |
Independent student2 |
|
1st-year undergraduate |
$5,500 (maximum $3,500 subsidized) |
$9,500 ($3,500)3 |
|
2nd-year undergraduate |
$6,500 ($4,500) |
$10,500 ($4,500) |
|
3rd- and 4th-year undergraduate |
$7,500 ($5,500) |
$12,500 ($5,500) |
¹ Except those whose parents are unable to borrow a PLUS loan.
² These limits also apply to dependent student whose parents are unable to borrow a PLUS loan.
³ The numbers in parentheses represent the maximum amount that my be subsidized.
The actual loan amount you are eligible to receive for an academic year is determined by the school and may be less than the maximum annual amounts shown in the chart above.
Below are the aggregate (total) limits for Direct Subsidized and Unsubsidized Loans:
* $31,000 for dependent undergraduate students excluding those whose parents are unable to borrow a PLUS loan
(no more than $23,000 may be subsidized)
* $57,500 for independent undergraduate students and dependent undergraduates whose parents are unable to borrow
a PLUS loan (no more than $23,000 may be subsidized)
These aggregate limits include both Direct Subsidized and Unsubsidized Loans and any subsidized and unsubsidized Federal Direct Loans received through the Federal Family Education Loan (FFEL) Program.
Interest Rates for 2012-13
Subsidized: 3.4% Unsubsidized: 6.8% PLUS: 7.9%
Disbursement of Direct Loans
- All disbursements will be 2 - 3 weeks after Drop/Add period.
- Federal government deducts a 1% origination fee from each subsidized or unsubsidized disbursement ($10 for every $1,000 borrowed). For PLUS loans the origination fee is 4% or $40 for every $1,000 borrowed.
Helpful Reminders
- Award amounts may change if you receive additional financial assistance.
- Must be degree seeking or in a federally approved PSAV Program.
- Must meet the financial aid standards of academic progress (SAP).
- Must be enrolled in a minimum of six credit hours or 225 clock hours.
- Within certain time frames, you may reduce or cancel all or part of your loans. Your promissory note will explain the procedures and time frames for canceling your loan.
- Never borrow more than absolutely necessary.
Details on the Direct Loan Program
Interest rates, repayment plans, consolidation, deferment provisions, forbearance, etc. may be found at:
All new borrowers in the Federal Direct Loan Porgram must complete entrance counseling
and sign a Master Promissory Note (MPN).
MPN and Entrance Counseling: https://studentloans.gov/myDirectLoan/index.action
Exit Counseling: http://www.nslds.ed.gov/nslds_SA/
TEACH Entrance: https://teach-ats.ed.gov/ats/index.action
TEACH Exit: http://www.nslds.ed.gov/nslds_SA/
