Skip Navigation LinksHome : Pay For College : Financial Aid and Scholarships : Family Educational Loans
 Rate this page

Federal Direct Loans

The federal government offers a variety of low interest loans. In addition to submitting the FAFSA, interested students must participate in loan entrance and exit counseling and complete a master promissory note.

Direct Subsidized Loans

Direct Subsidized Loans are based on financial need, whereby the federal government pays the interest on the loan during periods of enrollment and during authorized periods of deferment. The borrower is obligated to begin repaying the loan six months after graduation or after he or she drops below six credit hours. All Direct Subsidized loans originated after July 1, 2012 will not be eligible for an interest subsidy during the 6-month grace period. Interest on these loans will begin to accrue at the time the student graduates, withdraws or drops below half-time (six credits). The student must be enrolled at least half-time (six credits) per term in order to be eligible to borrow. All courses must be required for the declared major. The current interest rate is a fixed 3.76% and the loan origination fee is 1.069% for loans disbursed on or after July 1, 2016. The interest rate and origination fees for the 2017-18 academic year will be published by the Department of Education on or before June 30, 2017.

Direct Unsubsidized Loans

Direct Unsubsidized Loans are not awarded on the basis of need, whereby the federal government does not pay the interest while the student is enrolled. The principal amount of the loan is deferred during periods of half-time enrollment status. The student is charged interest from the time the loan is disbursed until it is paid in full. The borrower is obligated to begin repaying the loan six months after graduation or after he or she drops below six credit hours. The student must be enrolled at least half-time (six credits) per term in order to be eligible to borrow. All courses must be required for the declared major. The current interest rate is a fixed 3.76% and the loan origination fee is 1.069% for loans disbursed on or after July 1, 2016. The interest rate and origination fees for the 2017-18 academic year will be published by the Department of Education on or before June 30, 2017.

Parent Loan for Undergraduate Students (PLUS)

Direct PLUS loans are available to parents of dependent students who are enrolled on a full- or half-time basis, whereby parents with good credit histories can borrow to pay the educational expenses of each child who is a dependent undergraduate, with repayment of the principal and interest beginning within 60 days of the final loan disbursement. The student must be enrolled at least half-time (six credits) per term in order to be eligible to borrow. All courses must be required for the declared major. The current interest rate is a fixed 6.31% for loans disbursed on or after July 1, 2016. The interest rate for the 2017-18 academic year will be published by the Department of Education on or before June 30, 2017.

150% Direct Subsidized Loan Limit

Students who first borrow a Direct Subsidized Loan on or after July 1, 2013 are subject to a time limitation of their eligibility for Direct Subsidized Loans to a period not to exceed 150 percent of the length of the borrower’s educational program measured in years. Under certain conditions, the provision also causes first-time borrowers who have exceeded the 150 percent limit to lose the interest subsidy on their Direct Subsidized Loans. Please see the college catalog to determine the length of each academic program. For more information, read about the 150% Direct Subsidized Loan LimitAdobe Portable Document Format (PDF) icon.

More Information

Rate this web page