Federal Direct Student Loans

Federal Direct Student Loans

There are two types of Federal Direct Student Loans: subsidized and unsubsidized.  The federal government pays the interest on a subsidized student loan during: in-school status, authorized deferment periods, and, for loans first disbursed before July 1, 2012, and after July 1, 2014, the grace period. The student is responsible for paying the interest on an unsubsidized student loan during all periods.


Application:  Students may apply online.  Students applying for the loan will complete the Federal Direct Student Loan Master Promissory Note Application (MPN).  A borrower using the MPN will usually need only to sign a promissory note once, at the time they first borrow.  They may borrow additional loans, based on the same note, during the same year or subsequent years.


Deadline:  Federal Direct Student Loan applications must be certified by the Office of Financial Aid by the last day of the semester. In order for a student loan to be disbursed, the student must accept the loan, complete the master promissory note (MPN), and complete entrance counseling before the last day of enrollment for the term in which the loan is processed. The student must be enrolled at least half-time at the time of disbursement.


Eligibility:  Credit history is not required for Federal Direct Student Loans.  General eligibility requirements, as previously discussed, must be satisfied by all students to receive Federal Direct Student Loan assistance.


Loan Limits per Academic Year:  Please refer to the following chart for the maximum amount students may borrow in Federal Direct Student Loan per academic year.  Please note, for periods of study shorter than an academic year, the amounts students can borrow will be less than those listed.  In addition, loan amounts may be less if students receive other financial aid that is used to cover a portion of their cost of education.  Dependent students will be automatically certified for the maximum amount allowed based upon grade level, cost of education, and other financial aid received.  Dependent students, whose parent has been denied the Federal Direct PLUS Loan, must complete a request form in order for the additional unsubsidized loan to be processed. 

Maximum Academic Year Loan Limits
for Federal Direct Student Loans
Undergraduate Level - Dependent Students
(Except Students Whose Parents Were Denied PLUS)
*Base Amount
Additional Unsubsidized
Loan Amount
1st Year (Freshmen - 0 to 29 credits)
$3,500
$2,000
2nd Year (Sophomore - 30 to 59 credits)
$4,500
$2,000
3rd Year (Junior - 60 to 89 credits)
$5,500
$2,000
4th Year (Senior - 90+ credits)
$5,500
$2,000
5th Year (Teacher Certification & Deficiencies for Graduate Admissions)
$5,500
$0
Undergraduate Level - Independent Students and Dependent Students Whose Parents Were Denied PLUS
*Base Amount
Additional Unsubsidized
Loan Amount
1st Year (Freshmen - 0 to 29 credits)
$3,500
$6,000
2nd Year (Sophomore - 30 to 59 credits)
$4,500
$6,000
3rd Year (Junior - 60 to 89 credits)
$5,500
$7,000
4th Year (Senior - 90+ credits)
$5,500
$7,000
5th Year (Teacher Certification & Deficiencies for Graduate Admissions)
$5,500
$7,000
*The Base Amount may be either subsidized or unsubsidized as determined by student's eligibility on the FAFSA.
Graduate Level
Each Year: $20,500 the loan amount will be entirely unsubsidized.

Aggregate Loan Limits:  Please refer to the following chart for the maximum amount students may borrow in Federal Direct Student Loan for their entire academic career. Please note that these amounts include any funds that may have also been borrowed through the Federal Stafford Loan program. 

Aggregate Loan Limits for Federal Direct Student Loans
(Effective July 1, 2008)
Dependent Undergraduate Student
Independent Undergraduate Student or Dependent Undergraduate Student with PLUS Denial
Graduate Student
$31,000 - No more than $23,000 of this amount may be in subsidized loans. $57,500 - No more than $23,000 of this amount may be in subsidized loans. $138,500 - No more than $65,500 of this amount may be in subsidized loans. The graduate aggregate limit includes Stafford Loans received for undergraduate study.

Interest Rate:  Interest rates will vary depending upon when the loan was first disbursed. Federal Direct Student Loans first disbursed prior to July 1, 2014 are at a fixed rate (3.86% undergraduate students - 5.41% graduate/doctoral students). For loans first disbursed on or after July 1, 2014 and prior to July 1, 2015 are at a fixed rate (4.66% undergraduate students - 6.21% graduate/doctoral students). If you had loans disbursed prior to this period, check with your loan servicer as to what rates apply.

Fees:  In addition to the interest, an origination fee is charged. This amount is deducted from the loan amount at time of disbursement. For loans first disbursed prior to October 1, 2014 the rate is 1.072%. For loans first disbursed on or after October 1, 2014 and before October 1, 2015 the rate is 1.073%.

Loan Reductions/Cancellations:  Students may request the Federal Direct Student Loan be reduced or canceled.  Get more information to reduce/cancel loan. 


Repayment:  Federal Direct Student Loan repayment begins when students graduate, withdraw, or enroll less than half-time (less than six credits) and have used the allowable grace period - usually six consecutive months.  The length of repayment is between 10 and 25 years, depending on the amount borrowed and the type of repayment plan selected.  Students may also pay the balance of the loan, plus any interest due, early and without a penalty.  For repayment examples, please refer to following chart or to http://www.finaid.org/calculators/loanpayments.phtml.

Federal Direct Student Loan-Estimated Repayment Schedule
6.8% Simple Interest - Standard Repayment
Loan Amounts
Number of Payments
Monthly Payments
Interest Charges
Total Repaid
$1,000
22
$50
$65
$1,065
$3,500
90
$50
$972
$4,472
$4,000
107
$50
$1,344
$5,344
$4,500
120
$52
$1,715
$6,215
$5,000
120
$58
$1,905
$6,905
$5,500
120
$63
$2,096
$7,596
$8,500
120
$98
$3,239
$11,739
$10,000
120
$116
$3,810
$13,810
$18,500
120
$213
$7,048
$25,548
$19,000
120
$219
$7,239
$26,239
$23,000
120
$265
$8,763
$31,763
$46,000
120
$530
$17,525
$63,525
$65,500
120
$754
$24,953
$90,453
$138,500
120
$1,594
$52,764
$191,264

Loan Counseling:  Federal regulations require that first time Federal Direct Student Loan recipients at Bloomsburg University must complete entrance counseling requirements before receiving their loan funds.  Federal regulations also require a student to complete exit counseling prior to graduation or at the time a student either drops to less-than half-time enrollment (Undergratuate less than six credits - Graduate less than five credits) or withdraws from Bloomsburg University.