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What is a Federal Direct Student Loan?
A Federal Direct Student Loan is a low interest rate loan made to a student enrolled at least half-time (6 hours of enrollment per semester) in a degree seeking program. The loan is borrowed from and insured by the Department of Education.
Two types of Federal Direct Student Loans
There are two types of Federal Direct Student Loans. A student is eligible for a Federal Direct Subsidized Loan if he/she shows financial need as determined by the results of the Free Application for Federal Student Aid (FAFSA) and other aid sources received. The federal government pays the interest on a Federal Direct Subsidized Loan while the student is enrolled in school at least half time.
This loan is for undergraduate students only.
Graduate students and undergraduate students who do not have financial need may be eligible for a Federal Direct Unsubsidized Student Loan. With this loan, the student is responsible for interest that accrues while he/she is in school.
A student will be awarded the maximum subsidized loan before being awarded an unsubsidized loan.
How much can a student borrow each year?
| Dependent Undergraduates |
Subsidized Amount |
Additional Unsubsidized* |
Supplemental Unsubsidized |
Annual Maximum |
|---|---|---|---|---|
| First year | $3,500 | $2,000 | $ - | $5,500 |
| Second year | $4,500 | $2,000 | $ - | $6,500 |
| Third year and beyond | $5,500 | $2,000 | $ - | $7,500 |
| Graduate Programs | $0 | $ - | $20,500 | $20,500 |
Aggregate Limits (The maximum a student can borrow):
| Dependent Undergraduates |
Subsidized Amount |
Additional Unsubsidized* |
Supplemental Unsubsidized |
Annual Maximum |
|---|---|---|---|---|
| Dependent Undergraduates | $23,000 | $2,000 per year | $2,000 per year | $31,000 |
| Independent Undergraduates | $23,000 | $2,000 per year | Not to exceed aggregate | $57,500 |
| Independent or dependent undergrad whose parents are unable to borrow PLUS |
$23,000 | $2,000 per year | Not to exceed aggregate | $57,500 |
| Graduate | $65,500 | Not to exceed aggregate | $138,500 |
What are the terms of a Federal Direct Student Loan?
Amount of Subsidized:
- Up to $3,500 Freshman
- $4,500 Sophomore
- $5,500 Junior and Senior
Amount of Unsubsidized: See chart above
Interest for Subsidized/Unsubsidized Undergraduate:
- 4.529% fixed (valid July 1, 2019-June 30, 2020)
Unsubsidized Graduate Students:
- 6.079% fixed
Term:
- 10 years.
Fees:
- Origination: 1.059%.
Deferral for Subsidized Loan:
- Principal and interest.
Deferral for Unsubsidized Loan:
- Principal. Interest begins accruing when funds are disbursed to the school. The interest accrues on the Federal Direct Unsubsidized Loan during a student’s entire academic career.
The Direct Loan Application Process
Step 1: Accept your Federal Direct Loan in Bearcat Web
Step 2: Complete Entrance Counseling
First-time borrowers at Lander University who want to receive funding for a William D. Ford Federal Direct Loan must complete an Entrance Loan Counseling session online at https://studentloans.gov. The entrance counseling requirement for the Federal Direct Loan programs needs to be completed just once while in attendance at Lander University; therefore, students who borrow in subsequent years need not repeat the entrance counseling requirement.
At Lander, students complete the entrance counseling requirement on-line. Students should read all information provided on the entrance counseling website before proceeding to take the on-line quiz. The quiz is intended to measure your comprehension of the entrance counseling materials so that you have a clear understanding of the loan and subsequent repayment process.
The Financial Aid Office must have proof that a student has completed the entrance counseling requirement before the student's loan disbursement can be posted.
The Direct Loan Entrance Counseling Session can be completed on-line.
Important: When you get to the section of the Entrance Counseling Session that asks for Selected Schools, you must type in Lander University to proceed. The Financial Aid Office will receive confirmation that you completed this requirement electronically.
Step 3: Signing the Master Promissory Note (MPN)
Students who are borrowing for the first time through the Federal Direct Loan for Subsidized and/or Unsubsidized Loan must complete a Direct Loan Master Promissory Note in order to receive their Direct Loan funds. Once you complete the MPN, you will not have to complete another MPN for subsequent years.
What to have available when completing the MPN on-line:
- Department of Education FSA ID*
- Your social security number
- Permanent address and telephone number to complete references
- Driver's license number (if applicable)
*To complete the Electronic MPN on the Web, you'll need an FSA ID issued by the U.S. Department of Education. If you do not already have an FSA ID, you should apply for one immediately by visiting the Federal Student Aid website. Approximately 3 days after you request an FSA ID, you will be able to sign your electronic MPN for your Federal Direct Student Loans on-line.
This requirement applies to all students applying for Federal Direct Loan funds.
You can complete the Electronic MPN as soon as you decide that you want to borrow a Federal Direct Loan. You do not have to wait until the Direct Loan is originated by the Financial Aid Office at Lander University before completing the Electronic MPN.
NOTE: The most common delay in the delivery of Federal Direct Loan funds is not signing the MPN on time. Completing the Electronic MPN early will help prevent a delay in the delivery of your loan funds.
Step 4: Loan Disbursement
You can easily access the Federal Direct Loan Servicing website.
More information about Federal Direct Loans from the Federal Government can be found on the Federal Student Aid website.
The Financial Aid Office can only originate loans for a student after the student has accepted their Federal Direct Loan in Bearcat Web or MyLander. The loan record is then sent from Lander to the Department of Education for approval to disburse the loan funds and to the Direct Loan Servicer, who checks the promissory note status.
Disbursement of Federal Direct Loan funds at Lander University are posted electronically to the student's account. Students will receive an email on their Lander email when their loan funds have been posted to their account for a given term.
Repayment:
Visit the Direct Loan Servicing website , where you can:
- Make on-line payments
- View account balances (visit https://studentloans.gov)
- Change billing options
- Enroll in electronic services... and much more
