Federal Direct Lending 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. In order to qualify for Federal Direct Stafford Loans, students must file a FAFSA annually. The Federal Direct Parent Plus Loan is also available for parents of dependent students. It is recommended that students determine their eligibility for all Federal Title IV student aid before utilizing private education loan options, as the terms and conditions of the federal programs may be more favorable. All federal student and parent loans are submitted to the National Student Loan Data System (www.NSLDS.ed.gov), and will be accessible by the student, as well as guaranty agencies, lenders, and schools who are authorized users of the data system.
Interst rates for Stafford and Plus loans for the 2014-15 academic year are:
- 4.66% for Stafford Subsidized Loan (need-based, does not accrue interest while the student is enrolled in college)
- 4.66% for Stafford Unsubsidized Loan (not need-based, accrues interest even while the student is enrolled in college)
- 7.21% for Parent Plus Loan
Loan Application Procedures
To apply for the Stafford Loan:
Stafford Student Loans are guaranteed to all students who are determined to be eligible upon completion of the FAFSA. 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:
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.
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.