Federal Direct Loan

Federal Direct Loans are part of the William D. Ford Federal Direct Loan Program and are available to students regardless of demonstrated financial need.

Subsidized loans, awarded to students who demonstrate financial need, do not accrue interest during periods of at least half-time enrollment and deferments. (There has been a temporary elimination of the interest subsidy during the six month grace period effective on new Direct Stafford loans for which the 1st disbursement is made on or after July 1, 2012, and before July 1, 2014.)

Unsubsidized loans accrue interest beginning at the time the loan is disbursed. Interest may be paid during periods of enrollment or may be capitalized and added to the principal amount of the loan when the loan enters repayment.

If you have questions about existing Federal loans, you can review your student loan history through the National Student Loan Data System (NSLDS).

Interest Rates

2012-13 Undergraduate Loan TermsDue to recently passed legislation, the interest rate on this document is no longer accurate. We will link to an updated version once it becomes available. All other information is correct.

2012-13 Grad/Law Loan Terms

Grade Level	Academic Year	Loan Type	Interest Rate
Undergraduate (CAS) Students	2013-14	Subsidized and Unsubsidized	6.8% fixed
	2012-13	Subsidized	3.4% fixed
		Unsubsidized	6.8% fixed
Graduate and Law Students	2012-13 and 2013-14	Subsidized and Unsubsidized	6.8% fixed

 

Loan Amounts

As of July 1, 2008, the maximum amount of Federal Direct Loan funds that a student may borrow for an academic year is as follows.

Dependent students whose parents can borrow Federal Direct PLUS Loan

Borrower’s Academic Level	Base Amount	Additional Unsubsidized
Freshman	$3,500	$2,000
Sophomore	$4,500	$2,000
Junior and Senior	$5,500	$2,000

Dependent students whose parent cannot borrow Federal Direct PLUS Loan & all independent students

Borrower’s Academic Level	Base Amount	Additional Unsubsidized
Freshman	$3,500	$6,000
Sophomore	$4,500	$6,000
Junior and Senior	$5,500	$7,000
Graduate & Law Students	$8,500	$12,000

Fees and Disbursements

For all Direct Sub/Unsub Loans for which the earliest disbursement date is on or after July 1, 2012, the origination fee is 1.0%.

For all Direct Sub/Unsub Loans for which the earliest disbursement date is on or after July 1, 2013, the origination fee is 1.051%.

Be aware of loan fees when determining the net disbursement amount (principal minus fees).

Federal Direct Loan funds are divided evenly over your academic year. We will notify you when loan funds have been disbursed to your student account.

Processing

Process your Federal Direct Loans.

Returning loan funds to your lender

We will return loan funds if your written request is received within 14 days after the disbursement notification has been sent to you.

After this time, you can return Direct Loan funds by check to your servicer. For information about your servicer, please visit NSLDS.

To ensure that the payment is properly credited, you will need to include a cover letter stating whether the funds are for a loan payment or for canceling (inactivating) a loan. This note should indicate which loan(s) the returned funds should be applied to, and in what amounts (if repayment is split between loans).

A borrower has up to 120 days after the disbursement date to return Direct Loan funds without being responsible for paying fees and any accrued interest on the amount canceled.

Estimating your monthly loan payments

The minimum monthly payment is $50 and the maximum repayment period is 10 years. Options of standard, graduated, or income-sensitive repayment schedules will be offered to new borrowers as long as minimum annual payments and maximum time periods are met. However, extended repayment plans (up to 25 years) are available for borrowers with federal education debt exceeding $30,000. In addition, provisions are made for certain deferment and forbearance options.

The following table is based on a standard 10 year repayment plan. Use this table to estimate the monthly payment amount for your Federal Direct Loan(s).

TOTAL AMOUNT BORROWED	INTEREST RATE
	5.00%	6.00%	6.80%	7.50%	8.00%	8.50%
3,500.00	50.00	50.00	50.00	50.00	50.00	50.00
4,500.00	50.00	50.00	51.79	53.42	54.60	55.79
5,500.00	58.34	61.06	63.29	65.29	66.73	68.19
8,500.00	90.16	94.37	97.82	100.90	103.13	105.39
12,000.00	127.28	133.22	138.10	142.44	145.59	148.78
16,000.00	169.70	177.63	184.13	189.92	194.12	198.38
20,500.00	217.43	227.59	235.91	243.34	248.72	254.17
25,000.00	265.16	277.55	287.70	296.75	303.32	309.96
30,000.00	318.20	333.06	345.24	356.11	363.98	371.96
35,000.00	371.23	388.57	402.78	415.46	424.65	433.95
45,000.00	477.29	499.59	517.86	534.16	545.97	557.94