Direct Loan Program
Student Loans must be repaid, but generally have low interest rate. The Federal Direct Loan Program offers the following types of loans for students and parents:
Federal Direct Subsidized Loans
Federal Direct Subsidized Loans are for students with demonstrated financial need, as determined by federal regulations. No interest is charged while a student is in school at least half-time.
NEW REGULATION- 150% Direct Subsidized Loan Limits
First-time borrowers taking out federal Direct subsidized loans (Federal Government subsidy pays the interest on your loan) on or after July 1, 2013 are subject to the 150% Direct Subsidized Loan Limit, which limits the amount of time a student is eligible to borrow subsidized loans to 150% of their published program length.
Those effected will be:
First-time borrowers in an undergraduate program who take out a new loan are subject to the 150% subsidy limit. A first-time borrower is defined as a borrower with no outstanding balance of principal or interest on a federal Direct loan or Federal Family Education Loan Program (FFELP) loan on July 1, 2013 or on the date they first borrow a Direct loan after July 1, 2013.
First-time borrowers are defined as:
- A new student starting college for the first time on or after July 1, 2013.
- A third-year student who did not borrow any Direct loans for the first two years, taking out their first loan on or after July 1, 2013.
- A student who returns to school on or after July 1, 2013, and paid off their Direct loans in full before the start date of their new program.
For additional detailed information please visit the website at: https://studentloans.gov/myDirectLoan/directSubsidizedLoanTimeLimitation.action
Federal Direct Unsubsidized Loans
Federal Direct Unsubsidized Loans are not based on financial need; interest is charged during all periods, even during the time a student is in school and during grace and deferment periods. The borrower may choose to pay the interest charged on the loan or allow the interest to be capitalized (added to the loan principal) when the loan enters repayment.
Federal Direct Parent PLUS Loans
Federal Direct Parent PLUS Loans are unsubsidized loans for the parents of dependent students. Federal Direct Parent PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance. The school will determine the actual amount you may borrow. Federal Direct Parent PLUS loan borrowers are subject to a credit check. Dependent students whose parents have applied for but were unable to get a PLUS Loan are eligible to receive additional Federal Direct Unsubsidized Loan.
For more detailed information on the Federal Direct Loan Program, please visit www.studentloans.gov.