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Federal Direct Loan Program

Source: Perhaps the best known of all the loan programs, the Federal Direct Loan is a federally-guaranteed loan offered through the U.S. Department of Education.

Eligibility: Students qualify for the Direct Loan by filing the Free Application for Federal Student Aid (FAFSA). Because most students do not have a credit history, and would not otherwise be able to borrow, the federal government "guarantees" the loan.

Subsidization: The Direct loan comes in two forms: subsidized and unsubsidized. If the loan is going towards meeting federally-demonstrated need, it will be offered in a subsidized form. This means that the federal government will pay the interest that accrues on the loan while the student is in college or in deferment. If, on the other hand, the student's federally-demonstrated need has already been met through other sources, then the student may still elect to borrow through the Direct Loan Program, but the loan will be in an unsubsidized form. This means that the student will be responsible for paying the interest that accrues on the loan while in college or in deferment. All other features of the two loans (such as the amounts one can borrow, repayment schedule) are identical.

How to apply: The Financial Aid Office will evaluate student eligibility during the awarding process and include the Direct Loan in the financial aid package, if appropriate. For new students, an Entrance Counseling Form will be required along with a signed Master Promissory Note (MPN) online. First time borrowers will be contacted by the financial aid office during the summer prior to enrollment with detailed instructions for completing the Direct Loan application process. More details available at

For all new and continuing students, we assume you are accepting all components of your financial aid package; if this is not the case, please notify us in writing or by email if you wish to decline or reduce any portion of your aid, including loans.

Other Information: The student's year in school, status (i.e. dependent vs. independent), cost of education, and total financial aid determine the maximum that the student may borrow through the Direct Loan Program during a given academic year. All students have the option to accept the loan in full, borrow a lesser amount, or reject the loan for all or part of that academic year. The limits for the Direct Loan are as follows: $5,500 for the first year; $6,500 for the second year; and $7,500 for each of the third, fourth, and fifth years. The interest rate for Direct Subsidized and Unsubsidized Loans will be announced by the Department of Education prior to the award year.