Federal Direct Loans are available for both undergraduate and graduate borrowers. A student must be enrolled in at least a half-time status (six hours for undergraduate; five hours for graduate) in order to receive a Direct Loan. Loan repayment begins six months after graduation or departure from school.
A subsidized Direct Loan is awarded to undergraduate students only on the basis of financial need, as determined by the results of the FAFSA and other financial aid (such as grants and scholarships) that you receive. You will not be charged interest on the loan while you are in school at least half-time or during grace and deferment periods. The federal government “subsidizes” the interest on these loans.An unsubsidized Direct Loan is not awarded on the basis of financial need. You will be charged interest on the loan from the time of the first disbursement until it is paid in full. If you allow the interest to accrue (accumulate) while you are in school (or during other periods of nonpayment), it will be capitalized. This means the interest will be added to the original principal amount of your loan, and additional interest will be based on the higher amount. Making interest-only payments while in school will result in a lower amount repaid in the long run.
The maximum amount you can borrow each academic year depends on your grade level and dependency status. See the chart for annual and lifetime borrowing limits. The amounts below are the maximum values — you might not be eligible for the maximum annual amounts because of other financial aid that you receive.Year Dependent Undergraduate Independent Undergraduate Graduate*
The FAFSA is required for both subsidized and unsubsidized Federal Direct Loans. By completing the FAFSA, we will automatically determine your eligibility for subsidized and unsubsidized loans and notify you of your eligibility. We will first process the maximum subsidized eligibility and then unsubsidized. You will be notified of your eligibility through the iROAR portal, where you will have the opportunity to accept the full amount offered, reduce the amount offered, or decline the offer completely.
To complete the loan process, you will need to:
The interest rates for federal student loans are determined by federal law. If there are future changes to federal law that affect federal student loan interest rates, this information will be updated to reflect those changes.
Interest Rates for loans disbursed from July 1, 2014 - June 30, 2015:Loan Type Interest Rate Origination Fee Grace
1.072% (if first disbursed between July 1, 2014 and September 30, 2014)
1.073% (if first disbursed between October 1, 2014 and June 30, 2015)6 months You may receive a deferment if you are enrolled at least half-time or for unemployment or economic hardship. The 6-month grace period starts the day after you graduate, leave school or drop below half-time. You do not have to begin making payments until your grace period ends.
An electronic loan application will be created and transmitted to the U.S. Department of Education. First-time borrowers through the Direct Loan program will be directed to complete a promissory note. This can be done electronically at studentloans.gov. The promissory note is a legal, binding document whereby you agree to repay the loan.
You are encouraged to only borrow needed funds. If the loan approval is more than you desire, you can reduce the amount by going online under the Financial Aid section of the iROAR portal. On the "Accept Award Offer" tab, you will need to submit your request for reduction in the "Comments" section toward the bottom of the page.
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