Student Loans

Student Loans

Federal Direct Student Loans

What are Direct Student Loans?

Direct Loans from the U.S. Department of Education are low-interest loans for students and parents.  
With Direct Loans, you 
  • have a low, fixed interest rate for the life of the loan
  • can choose a 10-25 year repayment plan
  • borrow directly from the federal government
  • have a single contact, your loan servicer
  • can access your account data online 
  • don't have to make payments until you leave school
  • can switch repayment plans if your needs change
Types of Direct Student Loans

Student and parents of students can apply for three types of federal student loans:


Direct Subsidized Loan - This loan is available to students in post-secondary schools who have financial need. The Federal Government pays the interest on the loan while the student is in school or in the six month grace after class when the student is permitted to postpone payments.

After July 1, 2013, first time subsidized loan borrowers can only receive subsidized loans for 150% of the published length of their current programs. For example, borrowers in a four-year bachelor's degree program can receive subsidized loans for 6 years. Borrowers in a one-year certificate program like HVAC can receive subsidized loans for 1.5 years. 


The period of eligibility can change if a borrower enrolls in a different program and a borrower cannot receive a new loan if he has less than a year of eligibility remaining.

For example, if a student attends a two-year program for a year, then enrolls in a one-year program, his eligibility drops from 3 years to 1.5 years. He is not eligible for a new loan because he only has .5 years of eligibility left.


Direct Unsubsidized Loan - This loan is available to students in post-secondary schools and their eligibility is not based on financial need. borrowers can pay interest on the loan while in school or during grace and deferment periods, or the unpaid interest will accrue and be added to the principle due when repayment is required.


Direct Parent Loan to Undergraduate Student (PLUS) Loans - The federal PLUS loan is a parent loan for undergraduate students. It can be used to meet the cost of attendance. The loan is not based on need, but the borrower must be creditworthy. A FAFSA is required. The amount of a PLUS loan cannot exceed the student's cost of attendance minus other financial aid. Interest begins accruing at the time of disbursement. Repayment is generally expected once the loan is fully disbursed. However, a deferment may be requested while the student is enrolled and for an additional six months after the student graduates or leaves school.


How Much Can I Borrow?

The maximum amounts that students can borrow are determined by their dependency status, program of study, and other factors.


How Do I Apply?

Students applying for Direct Student Loans need to:

  1. Submit a Free Application for Federal Student Aid (FAFSA) 
  2. Fill out a Master Promissory Note (MPN)
  3. Complete online Entrance Counseling

Exit Counseling


Prior to graduating or leaving school, borrowers of federal student loans must receive exit counseling for loans. Exit counseling provides important information borrowers need to prepare for repayment.


If they complete counseling online, they must answer all the questions in each counseling section in one session. Therefore, to prepare, borrowers gather details about their income, expenses, debts, and the name, address, e-mail address, and telephone number for:

  • their closest relative
  • two references who live in the U. S.
  • current or expected employer, if known.
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