Federal Student Loans
William D. Ford Federal Direct Loan Program
Federal Direct Loans are low-interest loans for students to help pay for the cost of their education. The lender is the U.S. Department of Education and offers the following types of loans:
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Subsidized Loan |
Terms and Conditions See deferment for additional terms and conditions.
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To apply for Direct Loans, students should complete the Free Application for Federal Student Aid (FAFSA) in order to assess the student's financial need for student aid. Be sure to review the Federal Direct Loan Disclosure and Borrower’s Rights and Responsibilities before signing your Master Promissory Note.
Eligibility
Students must complete the following two requirements before any Direct Loan disbursement will be applied to his/her student account.
- Entrance Counseling is required before a new student loan borrower receives his/her first loan disbursement from the Direct Loan Program. Counseling helps the student understand his/her rights and responsibilities as a borrower and provides information and terms of the loan(s) to make the correct choices.
- The Master Promissory Note (MPN) is a legal document in which the student promises to repay his/her loan(s) and any accrued interest and fees to the U.S. Department of Education. It also explains the terms and conditions of the loan(s). GSC uses the multi-year not eligibility which means students can borrow additional Direct Loans on a single MPN for up to ten years.
Once your loan is certified, the Loan Origination Center will send you a Loan Disclosure Statement indicating the amount of your loan(s), estimated disbursement dates, and other pertinent information for the student loan borrower.
Disbursements
Direct Loans are awarded in substantially equal disbursements based on a student's planned enrollment for the academic year. Disbursement dates shown on your Disclosure Statement and WebROCK are estimates only. The actual disbursement dates depend on when requirements are completed and the final drop date of your courses each term.
Interest Rates and Fees
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The College Cost Reduction and Access Act of 2007 reduced the interest rates on subsidized Stafford loans for undergraduate students starting July 1, 2008 through June 30, 2012. This was extended by Congress until June 30, 2013. These reductions are available only to undergraduate students, not graduate students, and only for Subsidized Stafford Loans, not Unsubsidized Stafford Loans. The following rates apply to subsidized Stafford Loans. Unsubsidized rates and rates for graduate students may differ. There is a mandatory loan fee of 1.051% deducted from every Direct Loan disbursement. |
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Deferment
The federal government pays the interest on Direct Subsidized Loans while in school. Direct Unsubsidized Loans accrue interest while in school and you do have the option to pay the interest while enrolled which will reduce the overall cost of your loan.
Under the terms and conditions that you receive Federal Student Loan assistance, you may obtain deferral of the repayment of principle and interest for:
- Service under the Peace Corps Act
- Service under the Domestic Volunteer Service Act of 1973
- Comparable service as a volunteer for a tax-exempt organization of demonstrated effectiveness in the field of community service
Annual Award Amounts
The maximum amount a student may borrow each year in Direct Subsidized and Unsubsidized Loans depends on grade level and whether the student is a dependent or independent.
| Dependent Student | Independent Student | |
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| 1st-year undergraduate | $5,500 ($3,500 subsidized max.) |
$9,500 ($3,500 subsidized max.) |
| 2nd year undergraduate | $6,500 ($4,500 subsidized max.) |
$10,500 ($4,500 subsidized max.) |
| 3rd and 4th year undergraduate | $7,500 ($5,500 subsidized max) |
$12,500 ($5,500 subsidized max) |
| Post-Baccalaureate Certification (5th year undergraduate level) |
$7,500 ($5,500 subsidized max) |
$12,500 ($5,500 subsidized max.) |
| Graduate Study | Not applicable | $20,500 unsubsidized |
Once your loan is certified, the Loan Origination Center will send you a Loan Disclosure Statement indicating the amount of your loan(s), estimated disbursement dates, and other pertinent information for the student loan borrower.
Aggregate Loan Limits
Aggregate loan limits are defined by the government and dictate how much a student can actually borrow in student loans.
| Subsidized Loans | Unsubsidized Loans | Total Limit | |
|---|---|---|---|
| Dependent Students | $23,000 | $8,000 | $31,000 |
| Independent Students | $23,000 | $34,500 | $57,500 |
| Post-Baccalaureate Students | $23,000 | $34,500 | $57,500 |
| Graduate Students (totals include undergraduate loans) |
$65,500* | $73,000 | $138,500 |
*Subsidized Stafford Loans are no longer available to students enrolled in graduate programs as of 7/1/12.
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