Federal Student Loans
Direct Subsidized and Direct Unsubsidized Loans are made to eligible students attending school at least half-time in a program of study that are making satisfactory academic progress. Repayment begins six months after graduation or six months after the student ceases to be enrolled at least half-time in a program of study.
Direct Subsidized Loans
These loans are awarded on the basis of financial need. No interest is charged while a student is enrolled at least half-time.
Direct Unsubsidized Loans
These loans are not based on financial need. Interest is charged during all periods, including while the student is in school and during grace and deferment periods. The student may choose to defer interest payments while in school and the interest will be added to the unpaid principal amount of his/her loan. This is called “capitalization” and this could substantially increase the total amount of repayment. Making interest payments while in school are advantageous and will save the student money overall.
Before a loan will be certified by the Financial Aid office, the student must sign and return an enrollment agreement indicating his/her intention to attend school, complete a disclosure statement, entrance counseling and a master promissory note (MPN). Also, the student cannot be in default and must not have reached their aggregate loan limits.
Entrance counseling and MPN completions should be done by going to www.studentloans.gov and should be signed using the same FSA ID as used to sign the FAFSA.
The actual loan amounts and types of loans (Subsidized, Unsubsidized, or a combination of both) that students are eligible to receive each year are determined by the Financial Aid office, based on such factors as the cost of attendance, EFC, 150% Subsidized Loan Limit, other financial aid and the length of a program. The actual amounts that a student is eligible to borrow may be less than the maximum amounts shown (see Loan Limits Table).
Annual Loan Limits for Direct Subsidized and Direct Unsubsidized Loans
| Level | Dependent Undergraduate Students | Independent Undergraduate Students * |
|---|---|---|
| First Year | $5,500 (maximum $3,500 subsidized) | $9,500 (maximum $3,500 subsidized) |
| Second Year | $6,500 (maximum $4,500 subsidized) | $10,500 (maximum $4,500 subsidized) |
| Third Year | $7,500 (maximum $5,500 subsidized) | $12,500 (maximum $5,500 subsidized) |
* Dependent students whose parents are denied a PLUS Loan are eligible to receive the independent undergraduate loan limits.
Direct Subsidized and Unsubsidized Loans have a fixed interest rate. Fixed rates are a set rate for the life of the loan. Please refer to studentaid.gov for current rate information.
The student receives a disclosure statement that gives specific information about any loan that the school plans to disburse under his/her MPN, including the loan amount and loan fees. The disclosure statement also explains how to cancel the loan if the student doesn’t want it or chooses to cancel a portion of it.
Loan monies are to be used only to pay for educational expenses at the school that is certifying the loan. Education expenses include such school charges as tuition, fees and such indirect expenses as books, supplies, equipment, living expenses, dependent child care expenses, transportation, and rental or purchase of a personal computer.
