Federal Direct Loans

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Program Overview

Federal Direct Loans (formerly called "Federal Stafford Loans") are federally guaranteed loans under the William D. Ford Federal Direct Loan Program for students who are enrolled at least half-time in an aid-eligible program.  Federal Direct Loans are either subsidized or unsubsidized and currently have a fixed interest rate.  You can receive both subsidized and unsubsidized Direct Loans during the same enrollment period, depending on your eligibility.

A Subsidized Direct Loan is awarded on the basis of financial need. Interest does not accrue while you are enrolled at least half-time and during other specified deferment periods. Repayment begins six months after the student ceases to be enrolled at least half-time.

An Unsubsidized Direct Loan is not awarded on the basis of need.  The principal will be deferred until six months after the student ceases to be enrolled at least half-time. The student will be charged interest from the time the loan is disbursed until it is paid in full.  A student can either make the interest payment or defer it while he/she is in school.  If the student does not make interest payments while in school, the interest will be capitalized (added to the principal balance of the loan) every six months.

Annual Loan Limits

The actual loan amount is based on individual eligibility. A borrower’s total financial aid package, which may consist of grants, scholarships, and loans, may not exceed the student’s total cost of education.

Year In College
Base Subsidized/Unsubsidized Loan Amounts for
independent students
&
dependent students
Additional Unsubsidized Loan Amounts for
independent students
&
dependent students whose parents were denied a Direct PLUS Loan
Academic Year Limit
Freshman
$3,500 +$2,000
$4,000
$9,500
Sophomore
$4,500 + $2,000
$4,000
$10,500
Junior & Senior
$5,500 + $2,000
$5,000
$12,500
Teacher Certification
$5,500 + $2,000
$5,000
$12,500
Graduate
$0
$20,500
$20,500
 

Aggregate Loan Limits

Dependency Status
Aggregate Limit
Undergraduate education (dependent students)
$31,500 (No more than $23,000 of
which can be subsidized)
Undergraduate education (independent students)
$57,500 (No more than $23,000 of
which can be subsidized)
Graduate education (independent students)
$138,500 (No more than $65,500 of
which can be subsidized)
 

Interest Rates

The College Cost Reduction and Access Act of 2007 reduced the interest rates on subsidized Direct Loans for undergraduate students starting July 1, 2008. These reductions are available only to undergraduate students, not graduate students, and only for Subsidized Direct Loans, not Unsubsidized Direct Loans.

Year
Interest Rates for Subsidized Direct Loans for Undergraduate Students
Interest Rates for All Other Direct Loans
2009-10
5.60%
6.80%
2010-11
4.50%
6.80%
2011-12
3.40%
6.80%
2012-13
3.40%
6.80%
2013-14
3.86%
6.80%
2014-15
4.66%
6.80%
 

Fees

Federal Direct Loans incur a one percent origination fee on the full loan amount.    

Master Promissory Note (MPN)

Students who have been awarded a Federal Direct Loan as part of their financial aid package will need to complete a Master Promissory Note (MPN).  Students may complete the MPN online through the direct loan website. This will only need to be completed once to cover eligibility for both the subsidized and unsubsidized loans, and it is valid for ten years.

Entrance & Exit Counseling

Before a Federal Direct Loan may be disbursed, students borrowing for the first time at Immaculata University must complete an entrance counseling session in addition to the MPN.  This may be completed online through the direct loan website. Immaculata University is automatically notified upon completion.

Upon graduating, withdrawing, or dropping below half-time status from Immaculata University, a student must complete an exit counseling session.  This may be completed online through the direct loan website. Immaculata University is automatically notified upon completion. 

Deferment

Principal and interest for the Federal Direct Loan Program are deferred while the student is enrolled at least half-time.  A six-month grace period is allowed after the student ceases to be enrolled at least half-time before repayment begins. 

Repayment & Loan Servicing

There are five federal direct loan servicers. The Department of Education determines your servicer at the time your promissory note is completed and the loan is disbursed.    If you have a Direct Loan, previous to the 2010-2011 academic year through the Federal Family Educational Loan Program (FFELP), your loan would be serviced by the lender you chose when you signed your MPN.   Students and parents can look up their complete loan history, including the servicer for each loan, at www.nslds.ed.gov. Access to this site requires the user to have his/her Department of Education PIN.  

Loan Servicer Contact Information

Consolidation

Loan consolidation is an option available to federal loan borrowers through the Direct Consolidation Loan Program.  To discover if this option is beneficial to you, please visit www.loanconsolidation.ed.gov or contact the Direct Loan Consolidation Center by telephone at 800-557-7392.

1145 King Road, Immaculata, PA. 19345
p. 610-647-4400 or call toll-free: 1-877-42 TODAY
Federal Compliance Links | Clery
Copyright ©2014 All Rights Reserved

1145 King Road, Immaculata, PA. 19345 p. 610-647-4400 or call toll-free: 1-877-42 TODAY
Immaculata University | Copyright ©2014 All Rights Reserved | Federal Compliance Links | Clery