Federal Direct Loans for Student Borrowers

Financial Aid
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To be eligible for a Direct Loan, a student must be a U.S. citizen or permanent resident alien and must be enrolled in or admitted as at least a half-time student at an approved college, university or other post secondary institution in the United States or in a foreign country.

An undergraduate may borrow up to $5,500 the freshman year, $6,500 the sophomore, $7,500 the junior year, and $7,500 the senior year of study. The Federal Government will pay interest on the subsidized loan while the student is in college and for a six month grace period before repayment begins.  If a student is eligible for an unsubsidized loan, the student has the option of paying the interest while in school.  An origination fee will be deducted from the amount of the loan.  All loan disbursements for first-time borrowers must be held for 30 days into the semester per Federal regulation.

A student may borrow at a relatively low interest rate with no repayment as long as enrolled at least half-time, and for six months after program completion or departure.  Payment of principal may further be deferred during study under a graduate fellowship program approved by the U.S. Secretary of Education, during up to three years of active U.S. armed forces service, during up to three years as a full-time Peace Corps or VISTA or similar national program volunteer, or during up to 12 months of unsuccessful search for full-time employment.

The following regulations apply:

1. Depending on the amount of the loan, the minimum monthly payment will be $50 plus interest.  Under unusual and extenuating circumstances the government, on request, may permit reduced payments.

2. The standard repayment period is 10 years.

3. The maximum period of loan from date of the original note may not exceed 15 years, excluding authorized deferments of payments.

4. Repayment in whole or part may be made any time without penalty.

You must complete the FAFSA to be eligible for Federal Direct Student Loans.

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