Federal Direct Loan Program
Stafford Loans
Students apply for a Stafford loan by first completing the FAFSA. When the financial aid office reviews the FAFSA, the student’s eligibility for the Federal Direct Loan is then determined. Upon acceptance of the Direct Loan, a master promissory note (MPN) and an entrance interview form need to be completed.
A Stafford loan can either be subsidized or unsubsidized. A student must be enrolled half-time (6 credit hours) to be eligible and the maximum amount a student can borrow is based upon grade level status.
A subsidized loan is awarded on the basis of financial need. A student must be enrolled half-time to be eligible. The student is not charged interest until repayment begins because the federal government “subsidizes” the interest. These loans have a 10-year payoff and a six-month grace period beginning after the student leaves college, either by graduation or withdrawal from the University. For Direct subsidized student loans borrowed on or after July 1, 2012 and before July 1, 2014, the interest subsidy will not be available during the six-month grace period. This means that interest WILL be charged during the grace period for subsidized loans borrowed during this time period.
If you are a first-time borrower on or after July 1, 2013, there is a limit on the maximum period of time (measured in academic years) that you can receive Direct Subsidized Loans. You may not receive Direct Subsidized Loans for more than 150 percent of the published length of your program. This is called your “maximum eligibility period.” Your maximum eligibility period is based on the published length of your current program. You can find the published length of any program of study in the course catalog.
An unsubsidized loan is not awarded on the basis of need. A student must be enrolled half-time to be eligible. The student is charged interest from the time the loan is fully disbursed until it is paid in full. A student can choose to pay the interest while enrolled in school or defer those payments until repayment. These loans also have a 10-year payoff and a six-month grace period beginning after the student leaves college, either by graduation or withdrawal from the University.
Parent Loans
The Direct Parent Loan for Undergraduate Students (PLUS) is designed to help parents assist their dependent children with their educational expenses. Parents will need to go through a pre-approval process, which is based on specific credit criteria. There is no grace period with a PLUS loan. The interest rate is fixed at 6.41%. Interest is charged from the date of the first disbursement until the loan is paid in full. The repayment period for a Direct PLUS Loan begins at the time the PLUS loan is fully disbursed, and the first payment is due within 60 days after the final disbursement. Parents must begin paying both principal and interest while the student is still in school. However, for Direct PLUS Loans with a first disbursement date on or after July 1, 2008, the parent may defer repayment either when the student on whose behalf the parent borrowed the loan is enrolled on at least a half-time basis or for an additional six months after the student ceases to be enrolled at least half-time.