Loans are funds that you have to pay back, usually after you graduate. Student loan assistance from one or more programs may be included as part of a financial aid award.
Federal Direct Student Loans
Students who are U.S. citizens or permanent residents and have filed a Free Application for Federal Student Aid (FAFSA) are eligible, including those who do not qualify for need-based aid. Students who do not qualify for need-based aid are ineligible for the interest subsidy from the federal government. Borrowers of unsubsidized Direct Loans can either pay the interest quarterly or choose to have the interest accrue while they are enrolled in college.
Annual Loan Limits
|Student Grade Level||Subsidized||Unsubsidized||Total|
|4th Year and above||$5,500||$2,000||$7,500|
|Aggregate Loan Limits||$23,000||$8,000||$31,000|
Interest Rate/Loan Fees
The interest rate for Direct Subsidized Loans is fixed at 2.75% for loans disbursed on or after 7/1/20 and before 7/1/21. If a student qualifies for the in-school subsidy, the federal government pays the interest on the loan while the student is enrolled. The interest rate on Direct Unsubsidized Loans is also 2.75%, with the borrower responsible for paying any accrued interest. An origination fee of 1.057% of the principal loan amount is deducted from each disbursement before it is credited to the student account.
Direct Student Loan Application Process
Students who wish to borrow a Direct Student Loan must follow these steps:
- File a FAFSA so that eligibility for any subsidized loan amount can be established.
- Complete a Federal Direct Student Loan Authorization Form
- First-time borrowers must complete an Electronic Master Promissory Note (eMPN) at studentaid.gov/mpn/subunsub/landing
- First-time borrowers must complete loan entrance counseling at studentaid.gov/app/counselingInstructions.action?counselingType=entrance
Please note that federal regulations do not permit us to certify loans after the end of the academic year; therefore, all of the requirements listed above must be completed and/or received in our office prior to the end of the academic year.
Direct Loan Repayment
Repayment of Direct Loans begins six months after the student graduates or otherwise ceases enrollment. The standard repayment term is 10 years, and alternate terms such as extended repayment, graduated repayment and income-contingent repayment are also available. Information about loan repayment plans (with sample repayment calculators) is available at studentaid.gov/loan-simulator/.