Federal


Federal

Learn how to apply for a Federal Direct Loan.

Federal Direct Loans are the primary loans available and offered to each student who completes a FAFSA, and are funded by the federal government.

Direct Loans come in two types: Subsidized and Unsubsidized:

  • Subsidized Loans are available to undergraduate students with demonstrated financial need. If you are awarded a Direct Subsidized Loan, the government will pay the interest while you are in school. 
  • Unsubsidized Loans are available to students regardless of financial need.
  • If you are awarded a Direct Unsubsidized Loan, you pay all the interest, although you can have the payments deferred until after graduation. However, the deferred interest is added to the principal, which makes the loan more expensive over time.

Maximum Annual Loan Limits

Dependent Undergraduate Student

Dependent students are those whose parents are denied a PLUS Loan are eligible for Independent Loan Limits.

  • First Year: $3,500 subsidized plus $2,000 in unsubsidized loans
  • Second Year: $4,500 subsidized plus $2,000 in unsubsidized loans
  • Third Year and Beyond: $5,500 subsidized plus $2,000 in unsubsidized loans

Independent Undergraduate Student

  • First Year: $9,500 - No more than $3,500 of this amount may be in subsidized loans.
  • Second Year: $10,500 - No more than $4,500 of this amount may be in subsidized loans.
  • Third Year and Beyond: $12,500 - No more than $5,500 of this amount may be in subsidized loans.

Direct Loan interest rates and fees for the 2017-2018 academic year:

  • Undergraduate Subsidized Loan: Interest begins to accrue at the time of repayment. Current rates can be found here.
  • Undergraduate Unsubsidized Loan: Interest accrues during in school and grace periods. Current rates can be found here.

How to Receive a Federal Direct Loan:

Before you begin: You will need your FSA ID and password. This is the same login as used for FAFSA, You can look up or create your FSA ID at fsaid.ed.gov.

  • Start by logging in to www.studentloans.gov.
  • Step 1: Electronically sign your Federal Direct Loan Master Promissory Note (MPN)
    • Select “Loan Agreement (Master Promissory Note)"
    • Select Start next to “MPN for Subsidized/Unsubsidized Loans”
    • Complete the required information and submit
  • Step 2: Electronically complete your Federal Direct Loan Entrance Counseling online. This is a federal requirement and will inform you of your rights and responsibilities as a borrower under the Federal Stafford Loan Program.
    • After completing the MPN, return to “My Account”
    • Select “Complete Loan Counseling (entrance, financial awareness, exit)”
    • Select Start next to "Entrance Counseling (required)"

Once you have completed this process, your Master Promissory Note and Entrance Counseling will be valid for your entire career at USJ.