Financial Aid and Scholarships

The Federal Direct loans are loans borrowed by the student. Funding for the loan comes from the U.S. Department of Education. Direct loans are divided into two types: subsidized and unsubsidized.

Direct Loan Basics for Students

Direct Subsidized Loan

Qualification for the Direct Subsidized Loan is based on financial need as determined by the FAFSA. The federal government pays the interest on this loan during periods of half-time attendance or more, during the grace period, and for periods of authorized deferment.

Direct Unsubsidized Loan

Direct Unsubsidized Loans are not based on need, but the amount for which you are eligible may vary depending on the results of the FAFSA and the amount of your other aid. Interest starts accruing from the first disbursement and continues until the loan is paid in full. Interest payments are not required while the student is in school at least half-time, but can be paid by choice without penalty. Interest is capitalized (added to the principal balance) and is included in your monthly payment once one or more of the following occur: enrollment ceases, the grace period expires. and/or a deferment period ends.

Eligibility

To be eligible for Direct Loans, you must meet the following requirements:

• have a completed FAFSA for the current academic year,
• enroll in at least half-time credits,
• not be in default on previous federal loans,
• not have exceeded lifetime borrowing limits,
• have a completed Master Promissory Note (MPN) on file,
• have completed loan entrance counseling.

Fees

The U.S. Department of Education charges a 1% origination fee on all Direct Loans. They then apply a 0.5% rebate to the origination fee, resulting in a net 0.5% fee deducted from each disbursement. You retain the rebate if you make the first 12 payments on time. If any payments are late or missed during the 12 month period, the rebate is revoked and added back to the balance of your loan.

Interest Rates

For 2011-2012, the interest rates on Direct Loans are as follows:

Undergraduate

• Direct Subsidized Loans - 3.4%
• Direct Unsubsidized Loans - 6.8%

Graduate

• Direct Subsidized Loans - 6.8%
• Direct Unsubsidized Loans - 6.8%

These rates are fixed until the loan is paid in full or is consolidated.

Borrowing Limits

The annual limits for dependent students are:

The annual limits for independent students are:

The annual limits for graduate students are:

The aggregate (lifetime) limits are: