Students do not borrow from banks. The federal government raises the loan funds through its treasury bill auctions and the federal government is the recipient of loan repayments. Loan types available through this program are Direct Subsidized Loans, Direct Unsubsidized Loans and Direct PLUS Loans. Students wishing to apply for a Direct Subsidized Loan and/or a Direct Unsubsidized Loan must complete an entrance interview and master promissory note by logging onto StudentLoans.gov. Loan proceeds will not be disbursed unless all of the above procedures are completed. Students and/or parents borrowing through the student loan programs will have have information about the loans submitted to the National Student Loan Data System (NSLDS) and will be accessible by guaranty agencies, lenders, and schools determined to be authorized users of the data system.
Parents wishing to apply for a Direct PLUS Loan must have a Free Application for Federal Student Aid completed for the student on whose behalf the loan is being borrowed. Parents must also have a credit check performed and a master promissory note must be completed by logging onto StudentLoans.gov. Loan proceeds will not be disbursed unless all of the above procedures are completed.
Direct Subsidized Loan
The Federal Direct Subsidized Loan program assists students with meeting educational costs by providing low-interest, long-term loans. If the student demonstrates financial need for the loan, the interest is subsidized by the government while the student is enrolled at least half-time (six credits per semester). The repayment period begins 6 months after the student is no longer enrolled at least half-time and interest that accrues during the 6 month grace period is payable by the student.
Eligibility for a loan is based on the EFC calculated by the Federal Student Aid Programs. Families must demonstrate financial need for the loan according to criteria established by the U.S. Department of Education. Students must complete the Free Application for Federal Student Aid (FAFSA) to be considered for a Federal Direct Subsidized Loan and be enrolled at least half time (six credits) to be eligible for a student loan.
The subsidized loan amount is limited to demonstrated need up to a maximum of $3,500 for a dependent first year undergraduate student (less than 30 credits earned) and $4,500 for a dependent student who has successfully completed the first year (a minimum of 30 credits) and is in the second year of undergraduate study. The interest rate on the Federal Direct Subsidized loan is fixed for each academic year. Loan amounts are prorated when a program, or the remaining part of a program, is less than an academic year and when the student's enrollment status is less than full time but at least half time. An origination fee is deducted from the proceeds of each payment
Direct Unsubsidized Loan
Dependent students who do not qualify for the full interest subsidy under the Federal Direct Subsidized Loan program may receive a Federal Direct Unsubsidized Student loan. The Federal Direct Unsubsidized Student loan differs from the Federal Direct Subsidized Student Loan in that all the interest on the loan during in-school, grace, and deferment periods must be paid by the student. The interest rate is fixed each academic year.
The loan limit on the Federal Direct Unsubsidized Student Loan $5500 for a first year undergraduate student and $6500 for a second year undergraduate student less any amount of Federal Direct Subsidized Student Loan borrowed. Therefore, students who show need for only part of the Federal Direct Subsidized Student Loan may borrow the remainder through the Federal Direct Unsubsidized Student Loan.
Independent students may borrow a maximum of $9,500 (up to $3,500 subsidized plus $6,000 unsubsidized) as first-year undergraduates and $10,500 (up to $4,500 subsidized plus $6,000 unsubsidized) for independent students who successfully completed the first year (a minimum of 30 credits) and are enrolled in the second year of undergraduate study. The interest rate on the Federal Direct Unsubsidized Student Loan is fixed every academic year. Repayment commences six months after the month in which the student ceases to be enrolled at least half-time. An origination fee is deducted from each loan payment.
Note: No student may borrow in excess of the cost of attendance as calculated by the Office of Financial Aid.
Direct PLUS Loans (Parent Loan for Undergraduate Students)
This loan program is for the parents of undergraduate students to help them meet the cost of education. Parents may borrow up to the cost of education minus estimated financial assistance to the student. The interest rate is fixed each academic year. Repayment of the Federal PLUS loan begins 60 days after the last disbursement. Parents are eligible to borrow a Federal PLUS loan only if they have no adverse credit history. Parents complete a PLUS application and promissory note. Parents apply for PLUS loans by logging onto StudentLoans.gov. Each loan must be disbursed in two equal payments. An origination fee is deducted from the proceeds of each payment.
Note: No parent may borrow in excess of the cost of attendance as calculated by the Office of Financial Aid.
Apply for a student loan
Instructions (PDF attached - PLEASE REVIEW_ LAST UPDATE 2012)
Entrance / Exit Counseling Form/Master Promissory Note
Additional information about the Direct Student Loan programs can be found at studentaid.ed.gov.