Direct Loan Facts
Looking for more detailed information about the Federal Direct Loan Program? Here are some basic guidelines.
The federal government charges an origination fee when the loans are issued. Therefore, a student borrowing $3,500 in the Subsidized Loan will receive less credited to their student account, disbursed in two installments, one in the fall and one in the spring. For loans disbursed between July 1, 2015 - September 30, 2015 the origination fee is 1.076%. For loans disbursed between October 1, 2015 and June 30, 2016 the origination fee has not been set.
Subsidized vs. Unsubsidized
The main difference between the Subsidized Direct Loan and the Unsubsidized Direct Loan is subsidy and the interest rate.
The federal government pays for the interest on the Subsidized Direct Loan while a student is enrolled at least half-time. Interest on the Unsubsidized Direct Loan accrues from the time the money disburses to the student's account to the time the loan is repaid.
The interest rate for the Subsidized Loan for 2015-2016 is 4.29%. The interest rate for the Unsubsidized Loan for 2015-2016 is 5.84%.
Over a four-year period beginning July 1, 2008, the interest rate on Federal Direct Loans made to undergraduate students was reduced. The applicable interest rates for loans made during this period are as follows:
|July 1, 2015 -June 30, 2016||4.29%||5.84%|
|July 1, 2014 -June 30, 2015||4.66%||4.66%|
|July 1, 2013 -June 30, 2014||3.86%||3.86%|
|July 1, 2012 -June 30, 2013||3.4%||6.8%|
|July 1, 2011 -June 30, 2012||3.4%||6.8%|
|July 1, 2010 -June 30, 2011||4.5%||6.8%|
|July 1, 2009 -June 30, 2010||5.6%||6.8%|
|July 1, 2008 -June 30, 2009||6.0%||6.8%|
|July 1, 2007 -June 30, 2008||6.8%||6.8%|
Repayment begins six months after graduation, at a minimum of $50 per month. Your actual repayment is determined by the total amount borrowed and interest accrued. In general, there is a maximum of 10 years to repay the loan.
Federal Direct Loan Limits
Annual and grade level limits in the Federal Direct Loan program (subsidized and unsubsidized) are as follows:
(if not eligible for Subsidized)
5th Year Senior
Maximum aggregate borrowing in the Federal Direct Loan program (subsidized and unsubsidized):
|Dependent Undergraduates whose Parents ineligible for PLUS||$57,500|
These loan limits apply to the Direct Loan programs only. A student may borrow more than these amounts in any one year (if eligible) and may accumulate more than the aggregates shown by borrowing in different loan programs. These loans are for educational purposes only.
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