Federal Direct Student Loans
Federal Direct Stafford Loans are available to students enrolled at least half-time (6 credit hours for undergraduates) in a degree-seeking program who are U.S. citizens or eligible non-citizens. Loans have to be repaid, so you are encouraged to only borrow the amount of loan that you actually need to cover your educational expenses.
The maximum loan amounts for an academic year are $5,500 for first-year undergraduates, $6,500 for second-year undergraduates, and $7,500 for third- and fourth-year undergraduates. Students considered independent of parental support for financial aid purposes or whose parents cannot borrow a Federal Direct PLUS Loan may be eligible for additional loan amounts.
The maximum aggregate (total) loan amounts are $31,000 for dependent students ($23,000 of this may be in subsidized loans), $57,500 for independent students ($23,000 of this may be in subsidized loans).
The U.S. Department of Education charges a loan fee on the principal amount of each Stafford loan, deducted proportionately from each disbursement of the loan. For loans disbursing after 9/30/17, the loan fee is 1.066%. For loans disbursing after 9/30/18, the loan fee is 1.062%.
Begin the process by filling out a Free Application for Federal Student Aid (FAFSA)
First-time loan borrowers will need to complete Entrance Counseling and a Master Promissory Note (MPN) at the StudentLoans.gov
. Benedict College will receive electronic notification when these requirements have been completed.
You must be enrolled at least half-time (6 credit hours for undergraduates to receive a Direct Loan disbursement. Once all award requirements have been met, your financial aid will be credited to your student account.
Returning students must maintain Satisfactory Academic Progress, have remaining loan eligibility, and meet the Stafford Loan awarding requirements each academic year to continue eligibility for the Stafford Loan program.
You will receive a six-month grace period before beginning loan repayment after you graduate, leave school, or drop below half-time enrollment. During this period, you should receive repayment information from your loan servicer and be notified of when your first payment is due. However, you are responsible for beginning repayment on time, even if you do not receive this information. You may create a sample loan repayment schedule and review loan repayment options online.
Students must complete exit counseling whenever his/her enrollment drops below half-time. Benedict College will receive electronic notification when exit counseling has been completed.
To view data on the federal student loans and grants you have received, visit the National Student Loan Data System
Federal Direct Subsidized Loan
Direct Subsidized Stafford Loans are for undergraduate students with financial need as determined by the FAFSA. The federal government pays the interest on the loan (‘subsidizes’ the loan) while you are attending school at least half-time. For 2017-2018, the fixed rate is 4.45%. The interest rate will apply for the life of the loan. As a result, if you borrow loans each year, it is likely that each loan will have a different fixed interest rate. You may choose to begin payments on the loan while you are in school. Contact the Federal Student Aid for further information.
As a result of legislation enacted in July 2012, eligibility for the Direct Loan interest subsidy will be limited for new borrowers (no student loans prior to July 1, 2013). New borrowers may only receive subsidized loans, up to 150 percent of the published length of the student’s current educational program. Once the student reaches that limit, he or she may borrow only unsubsidized loans, and interest begins to accrue on the student’s outstanding subsidized loan.
Federal Direct Unsubsidized Loan
Direct Unsubsidized Stafford Loans are non-need based federal loans. If you qualify for an unsubsidized loan, you will be charged interest from the time the loan is disbursed until it is paid in full. For 2017-2018, the fixed interest rate is 4.45% (undergraduate students). The interest rate will apply for the life of the loan. As a result, if you borrow loans each year, it is likely that each loan will have a different fixed interest rate. While attending school, you may choose to begin payments on the loan, pay just the interest, or allow interest to accrue. Students make this decision during the loan application process; however, the decision can be changed at any time by contacting Federal Student Aid.
Federal Direct Parent PLUS Loan
Parents of dependent students are able to apply for the Federal Direct Parent PLUS Loan to supplement the student’s award package. PLUS Loans are the financial responsibility of the parents, not the student.
If you are considering applying for a PLUS Loan, there are several things you need to know:
- You will need to complete a Federal Direct Parent PLUS Loan application at StudentLoans.gov. Your loan application will be electronically submitted to the Office of Financial Aid. See Instructions for Applying for Loans and Entrance Counseling.
- You and your student must complete the Free Application for Federal Student Aid (FAFSA) online if you have not already done so.
- The Direct Parent PLUS Loan has a fixed interest rate of 7% for the 2017-2018 academic year.
- If you have PLUS Loans from various sources, you can apply to consolidate all your PLUS Loans into a Direct Consolidation Loan using an on-line or a paper application.
- Approval of a PLUS Loan requires a credit check for the borrower. The Direct Loan Servicing Center will conduct this process.
- All borrowers must complete a Master Promissory Note.
- Students must maintain Satisfactory Academic Progress.
General Eligibility Requirements
Student on whose behalf the parent is borrowing must file the Free Application for Federal Student Aid (FAFSA) online.
Borrower is a natural or adoptive parent of a dependent student who has been accepted for enrollment as a degree-seeking student; enrolled at least half-time; is a U.S. citizen, permanent resident or eligible non-citizen; and is making satisfactory academic progress.
Borrower does not have adverse credit history.
Neither parent borrower nor student has property subject to a judgment lien for a debt owed to the United States.
Parent borrower is a U.S. citizen, permanent resident or eligible non-citizen.
To continue to receive PLUS Loans, you must reapply each academic year.
Interest Rates and Loan Fees
The interest rate on a Federal Direct Parent PLUS Loan is fixed at 7% for the 2017-2018 academic year. You will be charged interest from the time the loan is disbursed until it is paid in full. The interest rate will apply for the life of the loan.
As a result, if you borrow loans each year, it is likely that each loan will have a different fixed interest rate.
The U. S. Department of Education charges a loan fee on the principal amount of each Direct PLUS Loan. For loans disbursing after 9/30/18, the loan fee is 4.248%. This fee is deducted proportionately from each disbursement of the loan
Summary of PLUS Loan Process
Once the parent and student have determined to apply for a Direct PLUS Loan, file the FAFSA and complete the Federal Direct Parent PLUS Loan application. Once the FAFSA, Parent PLUS application and all documents required to complete the student’s award package have been received and processed, the PLUS Loan request will be submitted to the Direct Loan Servicing Center for approval.
The Direct Loan Servicing Center approves the loan and notifies the parent borrower to complete the Master Promissory Note (MPN), if no MPN is already on file. Should the parent borrower be declined a PLUS Loan, the student will be offered an additional unsubsidized Federal Direct Loan based on his/her class level (freshman/sophomore offer of $4,000 and junior/senior offer of $5,000).
Crediting of Parent PLUS Loan Funds
PLUS Loan funds are credited directly to the student’s account and will be applied to outstanding charges, such as tuition, fees, room and board. Any credit balance will be issued to the parent borrower via paper check, which will be mailed to the address provided on the Parent PLUS application.
Continuing Student Eligibility
PLUS Loans cannot be automatically renewed each year. Returning students must maintain Satisfactory Academic Progress and meet the PLUS Loan awarding requirements each academic year.