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 Loans, students (and their parents if under the age of 24, not married, without a dependent or a military veteran) must file a FAFSA annually. The FAFSA can be completed at studentaid.ed.gov/sa/fafsa.The Federal Direct Parent Plus Loan is also available for parents of dependent students, which can be completed at www.studentloans.gov.
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.
Interest rates for Federal Direct Loans and Plus loans as of October 1, 2019.
- 5.05% for Subsidized Loan (need-based, does not accrue interest while the student is enrolled in college)
- 5.05% for Unsubsidized Loan (not need-based, accrues interest even while the student is enrolled in college)
- 7.6% for Parent Plus Loan
Click here for more information about Federal Student Aid.
Annual and Aggregate Limits for Direct Subsidized and Unsubsidized Stafford Student Loans:
Direct Lending Instructions
Student Loans are guaranteed loans made by the federal government to students who meet the eligibility criteria as determined by the FAFSA. Eligible students are permitted to borrow set amounts of Federal loans each year that they are in college, though a FAFSA must be completed every year to determine their eligibility. A portion of your Federal loans may be Subsidized, meaning that no interest will accrue on this portion of the loan while you are in college. If you have been awarded Federal Student Loans via your Art Academy Financial Aid Award letter, and wish to receive them, there are a few steps you must take.
Log onto www.studentloans.gov and electronically sign a Subsidized/Unsubsidized Loan Agreement (MPN). You must also complete Entrance Counseling, which explains your responsibilities as a first-time borrower. Both documents are REQUIREMENTS from the Department of Education for all students borrowing federal loans, and your loans will not disbursed without them.
Once your Loan Agreement (MPN) and Entrance Counseling are complete the Art Academy will automatically be notified, and you will be ready to receive your Federal Student Loans. There is no credit approval required for Federal Student Loans.
The Parent Plus Loan is a federal loan option for parents of dependent students, used primarily to close any cost of attendance gap once all other student aid had been awarded.
This is a credit contingent loan, so you must apply and be approved before receiving any loan funds. The Parent PLUS Application and credit check can be completed at www.studentloans.gov
The application window for the Parent Plus Loan 2020-2021will open on April 1, 2020. Parents who would like to apply for the Parent Plus Loan must sign a Parent Plus Loan Agreement (Master Promissory Note)
In order to apply for the Parent PLUS Loans Parents must sign into www.studentloans.gov using their own information, not the student's, in order for the application to be correct. You will see your credit decision immediately. If your loan application is denied, you will be given the choice to let the decision stand and take no action, obtain an endorser (co-signer), or appeal the denial. If you are denied the Plus Loan for credit reasons, and choose to take no further action, the student may be eligible to receive additional Unsubsidized Loan funds.
Use your Gap Agreement from our Business Office as a guide to help you determine how much Plus loan you will need to cover your student's expenses.. Be aware that the Parent Plus Loan takes a 4.236% fee from the loan prior to disbursement, so the amount you receive will be less than the amount on your application. If you borrow more than is needed to cover direct (billable) costs, the remainder of the loan will be refunded to you by the Art Academy Business Office to use toward other indirect costs.
Should you need assistance signing your completing your documents uou can reach the Art Academy Financial Aid Office at 513-562-8757.
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.