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The Federal Direct Student loans are funds borrowed from the federal government for educational costs. They must be repaid starting six (6) months from the date in which the student completes a degree, ceases to be enrolled, or drops below half-time status. The loan is made to the student, and the student is directly responsible for repayment of this debt. Eligibility is contingent upon completion of a FAFSA and submission of all required supporting documentation.
If a student demonstrates need – as defined by the federal government based on the information provided on the FAFSA – a portion of the Federal Direct Student Loan may be subsidized. In this case, the federal government pays the interest as it accrues, until the end of the student’s six (6) month grace period. All applicants who complete the FAFSA are automatically eligible for an unsubsidized Federal Direct Student Loan, on which interest accrues while the student is in school. Federal loan limits are determined by year in school.
Repayment of the subsidized and unsubsidized loans can be made over 10 or more years. The federal government charges an origination fee for each student loan. These fees are deducted from each semester’s check to the school. The fixed interest rate, set each year on July 1st, is based on the 91-day Treasury bill, plus a 3.1% allowance, not to exceed 8.25%
To receive a Federal Direct Student Loan, the student must complete Entrance Counseling and sign a Master Promissory Note for a Subsidized/Unsubsidized Loan (MPN), both available at studentaid.gov.
Loans will be electronically certified by the College in equal amounts for each semester of eligible enrollment in an academic year. The Office of Student Accounts will receive the net amount and credit it to the student account.
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