William D. Ford Federal Direct Loans
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The Federal Direct Loan program makes low interest loans available to students to help pay the costs of attending college.
In order to be considered for any of these direct loans, you must file the Free Application for Federal Student Aid (FAFSA).
Subsidized direct loans
This is a need-based loan. To qualify, a student must have a financial need as defined by federal regulations. The federal government pays the interest on this loan for the student while enrolled at least half time in school and until the student begins repayment six months after leaving school. Interest will also be paid during qualified deferment periods.
Unsubsidized direct loans
This loan is available to all eligible students regardless of financial need. The student is responsible for paying the interest as soon as the loan is disbursed. He or she can elect to defer interest payments and have them added to the loan balance at the time the loan enters repayment. The principle payments are deferred:
- While the student is enrolled at least half time
- For six months after the student leaves school
- During qualified deferment periods
- For loans disbursed on or after 7/1/15 and before 7/1/16, the interest rate is 4.29% for Undergraduate students and 5.84% for Graduate and Professional students
- There are no payments until six months after graduation or until the student stops attending at least half time.
- Origination fees – up front loan processing fees – effective 10/1/15 to 10/1/16 the origination fee is 1.068%
Facts about direct-loan programs
To apply for the Federal Stafford Loans, first-time borrowers must complete an online Loan Entrance Counseling Session and Master Promissory Note at studentloans.gov.