Direct Student Loans
What is a Federal Direct Student loan? The Direct Student loan is a low-interest loan designed to provide students with additional funds to assist in paying for education costs not covered by other sources of financial aid. The interest rates for loans taken out for the 2013-2014 academic year are 3.86% for both subsidized loans and unsubsidized loans. The federal government also charges an origination fee of 1.072%. The interest rate on these loans for the 2013-2014 academic year will be set this summer.
Are all Direct Student loans the same? There are two types of Direct Student loans: subsidized and unsubsidized. The subsidized loan is based on financial need as determined by the Free Application for Federal Student Aid (FAFSA). The federal government pays the interest while you are in school, during your grace period, and during any authorized deferment periods. The unsubsidized loan is not based on need, which means students at any income level can qualify. Interest will accrue while in school, during your grace period, and during any authorized deferment periods. The student has the option of paying the interest while in school.
Am I eligible for a Direct Student loan? To qualify, you must first complete the FAFSA and be enrolled at least half-time in an approved institution. The FAFSA determines your need for federal financial aid, including Direct Student loans. The Financial Aid Office determines and certifies your eligibility for the loan amount.
When do these loans go into repayment? Repayment begins 6 months after you graduate, leave school, or cease to be enrolled at least half-time.
How do I apply for a loan? In order to receive a Direct Student loan, you will need to complete the on-line Master Promissory Note and the Entrance Interview. To begin this process, click on “Apply Now” at the bottom of this page.