Federal Direct Loans
When students complete the Free Application for Federal Student Aid (FAFSA) they are applying for federal grants, other need-based aid and student Federal Direct Loans. The U.S. Department of Education’s federal student loan program provides all students that apply with a valid FAFSA the opportunity to borrow a yearly amount of loans where the U.S. Department of Education is the lender. There are multiple types of Direct Loans available:
- Direct Subsidized Loans are loans made to eligible undergraduate students who demonstrate financial need where interest does not accrue, it is paid by the Federal Government. The current fixed interest rate for the 2024-25 academic year is 6.533%. The current origination fee for the 2024-25 academic year is 1%. This fee is charged to the loan be the Federal Government prior to the loan funds coming to the college. The fixed interest rate and origination fee for the 2025-26 academic year will be announced by the Federal Government at a later date.
- Direct Unsubsidized Loans are loans made available to eligible undergraduate, graduate and professional students, but eligibility is not based on financial need. Interest will start accruing at the time of disbursement and continue during the time period student is registered at least half time. The current fixed interest rate for the 2024-25 academic year is 6.533% for undergraduate students and 8.083% for graduate students. The current origination fee for the 2024-25 academic year is 1%. This fee is charged to the loan be the Federal Government prior to the loan funds coming to the college. The fixed interest rate and origination fee for the 2025-26 academic year will be announced by the Federal Government at a later date.
- Direct PLUS Loans are loans made available to graduate or professional students and parents of dependent undergraduate students to help pay for education expenses not covered by other financial aid. Eligibility is not based on financial need, but a credit check is required. Borrowers of a Parent PLUS loan can request up to a student’s Cost of Attendance minus the student’s current aid offer. The current fixed interest rate for the 2024-25 academic year is 9.083%. The current origination fee for the 2024-25 academic year is 4%. This fee is charged to the loan by the Federal Government prior to the loan funds coming to the college. The fixed interest rate and origination fee for the 2025-26 academic year will be announced by the Federal Government at a later date.
Students may borrow from $5,500 to $7,500 annually with low interest and deferred repayment. The maximum a student can borrow for undergraduate study is $31,000.
- First-year students can borrow up to $5,500 annually.
- Second-year students can borrow up to $6,500 annually.
- Third- and fourth-year students can borrow up to $7,500 annually.
Federal Direct loans eligibility is determined by the college’s cost of attendance, expected family contribution, and other aid provided.
In addition to the FAFSA, first time borrowers will need to also complete Student Loan Entrance Counseling and sign a Master Promissory Note.
