Federal Direct Loan

Federal Direct Loans are federal loans that are available to degree-seeking students enrolled on an at least half-time basis (6 credit units). All federal loans are borrowed directly from the U.S. Department of Education as part of the William D. Ford Direct Loan Program. You can be awarded either a Direct Subsidized Loan and/or a Direct Unsubsidized Loan. A student’s eligibility for these loans is determined by information entered on the FAFSA form. Direct Loans are need-based loans and they carry a current origination fee of one-half percent. The origination fee is deducted from the total loan amount prior to being disbursed to the college.

A Subsidized Loan is awarded based on a students financial need as determined by the FAFSA. This loan does not accrue interest prior to the repayment of the loan or during authorized periods of deferment. Repayment begins six months after a student enrolls less than half time, withdraws from the school or graduates. This period of time during which no repayment is required is called the “grace period.”

An Unsubsidized Loan is not awarded based on financial need so just about all students are eligible. Unlike the Subsidized Loan, this loan will accrue interest immediately from the time the loan is disbursed until paid in full. Students have the option of paying the interest while in school or deferring the interest payments until they enter repayment. The grace period for this loan also ends six months after a student enrolls less than half time, withdraws from the school or graduates.

Depending on a student’s financial need, Direct Loans Loans may be a combination of both Subsidized and Unsubsidized Loans.

Maximum Undergraduate Direct Loan Amounts per Academic Year