Federal Direct Loan Program
This is one of the federal student aid programs of the US Department of Education. These loans are sometimes referred to as Stafford Loans. The loan is available when enrolled at least half-time and is the only source of federal aid for students pursuing a second bachelor’s degree. Since the loans are borrowed directly from the government, borrowers make loan payments to the Department of Education’s loan servicers upon entering repayment. You will receive a six-month grace period after graduation (or your enrollment drops below half-time) before repayment begins.
Information about the interest rates, loan origination fees, and repayment can be found at studentaid.ed.gov.
Prospective borrowers must first complete the Free Application for Federal Student Aid (FAFSA). Based on the information provided on the FAFSA, our office will determine the type and amount of Direct Loan for which you are eligible and will provide information regarding how to accept these funds. There are two types of Federal Direct Loans:
- Direct Subsidized Loan: Eligibility is need-based. No interest accrues on the principal while you are enrolled at least half-time.
- Direct Unsubsidized Loan: Eligibility is not need-based. You are responsible for the interest that accrues while you are enrolled in school and during the grace period.
- Loan Agreement (MPN) And Entrance Counseling: Federal regulations require that first-time borrowers and students new to UE complete a Loan Agreement (MPN) and Entrance Counseling. Both are done at studentloans.gov. You will sign in using the same FSA ID that is used when completing the FAFSA. Loan proceeds will not be disbursed until both the MPN and Entrance Counseling have been completed. Students complete these steps only as first-time borrowers.
Annual Direct Loan Limits
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|Academic Level||Dependent Undergraduate Students||Independent Students|
|Freshman (0-29 credits earned)||$5,500 (max $3,500 subsidized)||$9,500 (max $3,500 subsidized)|
|Sophomore (30-59 credits earned)||$6,500 (max $4,500 subsidized)||$10,500 (max $4,500 subsidized)|
|Junior and Senior (60+ credits earned)||$7,500 (max $5,500 subsidized)||$12,500 (max $5,500 subsidized)|
|Graduate / Professional Students||N/A||$20,500 (unsubsidized)|
|Undergraduate||$31,000 (max $23,000 subsidized)||$57,000 (max $23,000 subsidized|
Federal Direct Loan Repayment Resources
- NSLDS (National Student Loan Data System): Log in to this site using your FSA ID to access your federal loan borrowing history and your federal loan servicer’s information.
- Exit Counseling: Direct Loan borrowers must complete online Exit Counseling at studentloans.gov upon graduation or withdrawal from the University. In-person loan repayment sessions are also offered during each semester where this step is discussed in further detail.
- Repayment Plans and Repayment Estimator: Through Federal Student Aid, find repayment plan options, use the Repayment Estimator, learn how to make payments, get help if you can’t afford your payments, and see what circumstances might result in a loan being forgiven, canceled, or discharged.
- Federal Loan Servicers: Your loan servicer is the company assigned by the Dept. of Education to handle the repayment of your federal student loan. The loan servicer will work with you on repayment plans and loan consolidation and will assist you with other tasks related to your federal student loan. It is important to maintain contact with your loan servicer. If your circumstances change at any time during your repayment period, your loan servicer will be able to help. Visit My Federal Student Aid to view federal loan servicers’ contact information.
Federal Direct Parent Loan (PLUS)
Administered by the US Department of Education, the Federal PLUS Loan is a resource to assist credit-worthy parents of dependent students in paying for college costs owed directly to UE and/or for other indirect educational expenses, such as books and supplies. While the parent is not required to demonstrate financial need, the FAFSA must be filed annually in order for a parent to use the loan program. Parents must pass a credit check performed by the US Department of Education to be eligible for this loan. Parents may borrow an amount up to the maximum cost of attendance, less all other financial aid. The most current information about interest rates and loan origination fees can be found at studentaid.ed.gov.
- How is the loan requested and processed?
- The PLUS Loan is applied for online at studentloans.gov. In order to log into the student loans website, you must have a Federal Student Aid Username and Password associated to you, the parent. You may create this ID and Password through fsaid.ed.gov. Within 48 hours of submitting the application, our office receives confirmation of your application and responds directly to the parent email listed on the application. A supplemental form is provided in order for you to confirm the amount, select an authorization to direct excess funds, or verify your intentions in the case of a denial. This form must be completed and returned to the Financial Aid Office in order for the loan to be finalized.
- How will the loan proceeds be disbursed?
- At the beginning of each semester, one half of the annual loan amount requested will be transmitted electronically to your child’s University of Evansville student account to apply toward the UE charges for tuition, fees, room, and meals. A federal origination fee is withheld before the loan proceeds are sent. If PLUS loan funds overpay the charges, the excess may be refunded to either the parent or student, as directed by the parent.
- How will parents repay the loan?
- Unless you make formal arrangements for a deferment, you will begin repaying a PLUS loan within 60 days after the full amount that you have borrowed for the school year has been disbursed. In general, the parent has 10 years to repay the loan. A PLUS loan may not be consolidated with any student loans.
- Loan Agreement (MPN)
- Federal regulations require that first-time parent borrowers complete a Loan Agreement (MPN) for the Parent PLUS Loan at studentloans.gov. (Note: The MPN is also required to be completed by the parent borrower even if the parent has borrowed for another child. The MPN is unique to the parent/child pairing.)
- Divorced And Separated Parent Borrowers
- Federal regulations allow both of your parents to apply for separate PLUS loans. When both parents apply for a PLUS loan, the excess funds must be disbursed to the student.
- What if the parent’s credit check is declined?
- If the parent’s credit check is declined due to adverse credit, the dependent, undergraduate student is eligible to borrow additional unsubsidized loan funds based upon their grade level. Freshmen and sophomores may borrow up to an additional $4,000 for the year; juniors and seniors up to an additional $5,000 for the year. The OFA will communicate instructions to the student’s UE email regarding accepting the additional loan eligibility. More detailed information regarding the PLUS Loan credit check can be found at the ed.gov website.
Grad Plus Loan
Direct Plus Loans For Graduate And Professional Degree Students
Graduate and professional degree students can borrow a Graduate PLUS Direct Loan to help with educational expenses beyond what the Direct Unsubsidized Loan covers. The Grad PLUS Loan is a credit-based loan at a fixed interest rate. The graduate student must have used his or her maximum eligibility for the Direct Unsubsidized Loan before using this resource. The maximum eligibility for the PLUS Loan is the student’s cost of attendance budget for his or her program minus any financial assistance received. Students apply online for this loan at studentloans.gov. Within 48 hours of submitting the application, our office receives confirmation of your application and responds directly to your UE email. A supplemental form is provided in order for you to confirm the amount and select an authorization to direct excess funds. This form must be completed and returned to the Financial Aid Office in order for the loan to be finalized. The Loan Agreement (MPN) and Entrance Counseling for the Grad PLUS Loan must also be completed at studentloans.gov before borrowing for the first time in this loan program.
Federal Nursing Loan
This federally-funded loan is available to qualified full- and half-time nursing students who demonstrate financial need. Freshmen and sophomores may borrow up to $3,300 per year; juniors and seniors up to $5,200 per year. The cumulative borrowing limit is $17,000. No interest accrues on the principal while you are enrolled at least half-time. You will receive a nine-month grace period after graduation (or your enrollment drops below half-time) before repayment begins. At that time, interest accrues at the rate of five percent. Nursing students interested in this loan should contact the Office of Financial Aid. Each year, Verification of the FAFSA must be completed prior to receiving funds from this loan. Once awarded, first-time recipients must sign the Master Promissory Note (MPN) which is a one-time process and is valid for up to 10 years of future borrowing.