Admissions Undergraduate Financial Aid Federal Direct Loan Program
Federal Direct Loan Program
What You Need to Know
The Federal government guarantees students' access to low-interest student loans to help meet the costs of higher education. Recent legislation has made it mandatory for all schools to convert to a direct lending format for the 2010 academic year. This means that students and parents will borrow their federal loans directly from the U.S. government, instead of using a lender as we have done in the past.
Interst rates for Stafford and Plus loans for the 2011-12 academic year are:
- 3.4% for Stafford Subsidized Loan (need-based, does not accrue interest while the student is enrolled in college)
- 6.8% for Stafford Unsubsidized Loan (not need-based, accrues interest even while the student is enrolled in college)
- 7.9% for Parent Plus Loan
Loan Application Procedures
- To apply for the Stafford Loan:
Stafford Student Loans are guaranteed to all students who complete a FAFSA, so there is no approval process. If you choose to take Stafford student loans, you must first sign a Master Promissory Note (MPN) AND complete Loan Entrance Counseling online at studentloans.gov. The student must sign in with their own FAFSA PIN.
Yearly Stafford Student Loan Limits are as follows:
| Freshman | $5,500 |
| Sophomore | $6,500 |
| Junior | $7,500 |
| Senior | $7,500 |
- To apply for the Parent PLUS Loan:
Parents who would like to apply for the Parent PLUS Loan must fill out a PLUS Application AND sign a PLUS Master Promissory Note (MPN) at studentloans.gov. Parents must sign in using their own FAFSA PIN, not their student's, in order for the application to be correct. Parents will receive a credit decision immediately after completing the PLUS Application.
The Award Letter should be used as a guide to help determine how much PLUS loan you will need to cover your student's expenses. The amount of the PLUS loan listed on the Award Letter indicates the maximum amount a parent is eligible to apply for, but you may wish to borrow less depending upon your needs. Always remember, the Parent PLUS Loan takes a 4% servicing fee prior to disbursing the funds to the school, so be sure to plan for this fee when determining the amount you wish to borrow.
- Loan Calculator
In order to better plan and understand your loans, please refer to the loan calculator tool in the link below. This tool will help you understand the impact education loans will have on student and parent borrowers.
