Federal Direct Student Loan

Direct Student Loans are low interest loans available to students to help pay for their school expenses. Unlike other loans, a Direct Loan is funded by the U.S. Department of Education rather than a bank or credit union. The Department of Education disburses the money directly to the school and the funds are applied to the student's tuition and fees. Just like other loans, Direct Loans must be repaid by the borrower.

There are two types of Direct Loans for students:

Subsidized

Direct Subsidized Loans are available to students that are enrolled at least half-time (6 credit hours), have financial need, and have not received financial aid exceeding their cost of attendance. The loan does not accrue interest while the student is enrolled at least half-time, during the 6 month grace period after graduation, and during deferment periods.

Unsubsidized

Direct Unsubsidized Loans are available to students that are enrolled at least half-time (6 credit hours) and have not received financial aid exceeding their cost of attendance. Unlike the subsidized loan, the unsubsidized loan does accrue interest while the student is in school, during their grace period, and during deferment.

Direct Loan eligibility requirements:

• Student is enrolled at least half-time (6 credit hours)
• Student must have a high school diploma or equivalent
• Student must be matriculated (enrolled and working towards a degree or certificate program)
• Must be a U.S. citizen or eligible non-citizen
• Have a valid Social Security Number
• Students must be making satisfactory academic progress
• Male students over the age of 18 must be registered with Selective Service
• Student's existing Direct Loans should be in good standing, not in default.
• Students cannot exceed their aggregate loan limit

How do I apply for a Direct Student Loan?

To apply for a Direct Loan, you must complete the Free Application for Federal Student Aid (FAFSA).

Students must obtain a Personal Identification Number (PIN) that serves as their electronic signature. The PIN is used to electronically sign the FAFSA form and Direct Loan MPN. You can also access personal information at U.S. Department of Education websites. Note: If a parent is required to provide their income information on their child's FAFSA, they are also required to obtain a separate PIN and electronically sign the FAFSA.

Is there any other paperwork that needs to be completed?

Master Promissory Note (MPN) - An agreement signed by the student, promising to repay the entire loan amount that is borrowed, along with any interest that accrues during this time. Students will need their Department of Education PIN to electronically sign their MPN.

Entrance Counseling Session - An online tutorial explaining the borrower's rights and responsibilities, interest rates and fees, and repayment options. This session includes a short exam that must be completed successfully by the student.

How much can I borrow for the academic year?

Dependent Students (except students whose parents cannot borrow a Parent PLUS Loan)

Independent Students (also dependent students whose parents cannot borrow a Parent PLUS Loan)

To apply for the additional unsubsidized loan, students should complete the Federal Direct Student Loan Request Form, and return it to the Financial Aid Office.

What is the interest rate?

Note: Student's will have the option to have loan payments electronically deducted from their checking/saving accounts, and receive a .25% reduction on their interest rate.

Is there a charge for this loan?

Yes, in addition to the interest, you pay a loan fee of 2.0% of the loan amount. This fee will be deducted prior to the loan being disbursed.

Direct Loans also offers an up-front interest rebate for Direct Subsidized and Unsubsidized Loan borrowers. The rebate amount is equal to 1.5% of the loan amount borrowed. The student must make all of your first 12 required monthly payments on time or the rebate amount will be added back to the principal balance of their loan.

How is the loan money received?

The school will apply the loan to any outstanding tuition and fees, and then any remaining money is refunded to the student's permanent mailing address. For specific timeframes regarding student refunds, and financial aid disbursements, please click here.

When do I begin repaying the loan?

Prior to repayment students are required to complete an online Exit Counseling Session. Students should complete this session when they have graduated from our institution, decided to leave school, dropped below half-time or transferred to a different institution.

Direct Subsidized and Unsubsidized Loans have a 6-month grace period that starts the day after you graduate, leave school, or drop below half-time enrollment. Once the 6-month grace period ends, the student must begin making payments.

How long will I have to repay my loan, and what are the repayment options?

Depending on the repayment option that is chosen, students generally have 10-25 years to repay their Direct Student Loan.

Repayment Options:

• Standard Repayment Plan - Fixed monthly payments for up to 10 years.
• Extended Repayment Plan - Fixed monthly payments over a period of time, not to exceed 25 years.
• Graduated Repayment Plan - Payments that start off lower at first, and the gradually increase, usually every 2 years.
• Income Contingent Repayment Plan - Your monthly payment is adjusted each year based on your annual income, your family size, and the total amount of your Direct Student Loans. After 25 years, any unpaid loan amount will be forgiven.

Can I ever postpone making loan payments?

Yes, under certain circumstances you may qualify for a deferment or forbearance.

Examples:

• Student returns to school at least half-time
• Student is unemployed and qualifies for economic hardship
• Student is serving on active duty during a war or other military operation.

If students don't qualify for a deferment but are temporarily unable to make loan payments, they may qualify for a forbearance.

Direct Loan Contact Information

General Information about Direct Student Loans and applying for them

Federal Student Aid Information Center
1-800-4-FED-AID
www.studentaid.ed.gov

Information on repaying your Direct Student Loan

Borrower Services
Direct Loan Servicing Center
1-800-848-0979
www.dl.ed.gov

Information on Consolidating your Direct Student Loans

Direct Loan Consolidation Center
1-800-557-7392
www.loanconsolidation.ed.gov