Federal Direct Student Loan
The Federal Direct Student Loans are a primary financial aid source for Graduate students. The Federal Direct Student Loans will be listed on your Financial Aid Award Letter if you filed the Free Application for Federal Student Aid (FAFSA) and you are eligible to borrow this federal student loan. However in order for a Federal Direct Student Loan to be applied to your Bursar account, TWO important steps need to be completed. These steps are completed at one Federal Student Aid website www.studentloans.gov. You will be directed to log into the website using the same PIN you used to electronically sign your FAFSA.
Step 1: Student Loan Entrance Counseling - This is a federal requirement which lets you know your rights and responsibilities as a federal student loan borrower. Student Loan Entrance Counseling is completed at www.studentloans.gov
Step 2: Sign a Master Promissory Note - Complete the application and sign a Promissory Note for your Federal Direct Student Loan. Signing the Promissory Note indicates your committment to repay the loan you are borrowing. The Master Promissory Note is signed at www.studentloans.gov
What is a Federal Direct Student Loan?
Federal Direct Student Loans are low interest rate loans made to Graduate students attending accredited colleges and universities. There are two types of Federal Direct Student Loans, Subsidized and Unsubsidized and the FAFSA results determine the student's eligibility for the type of loan awarded.
The Direct Subsidized Student Loan is a federally subsidized loan program available on the basis of financial need to students enrolled at least half-time. For students who are eligible to borrow the Direct Subsidized Student Loan, the U.S. Department of Education pays the interest while you're in school at least half-time, for the first six months after you leave school (your grace period), and during periods of deferment (a postponement of loan payments). The interest is fixed at 6.8% as of July 1, 2006. A FAFSA must be completed to qualify for a Federal Direct Student Loan.
The Direct Unsubsidized Student Loan is also a federal loan however the U.S. Department of Education does NOT pay interest on this type of loan. The interest rate is fixed at 6.8% as of July 1, 2006 and the interest will start accruing on the date of your first disbursement. Students may pay interest while in school but have the option to defer paying the interest until the loan goes into repayment. The Direct Unsubsidized Student Loan does not go into repayment until you have dropped below half-time, six months after you leave school (your grace period) and during periods of deferment (a postponement of loan payments). A FAFSA must be completed to qualify for a Federal Direct Student Loan.
Federal Direct Student Loan Maximum Amounts For Graduate Students:
Maximum Total Loan Amount per Academic Year (up to Cost of Attendance) = $20,500.
Maximum Direct Subsidized Student Loan Amount per Year = $8,500.
Maximum Total Debt from Federal Direct Student Loans (Undergraduate + Graduate) = $138,500 with a maximum $65,500 in Direct Subsidized Student Loans
Loan Repayment: The following link offers important information about Repaying Your Loans. Repayment plans and calculators are available as well as information on Postponing Repayment and Public Service Loan Forgiveness. You can estimate your monthly payments using the Loan Repayment Chart.