Federal Loans

COVID-19 Emergency Relief and Federal Student Aid
The U.S. Department of Education’s COVID-19 relief for student loans has ended. The 0% interest rate ended Sept. 1, 2023, and payments restarted in October. Learn more about federal loan repayment on the COVID-19 relief for federal student loans on the StudentAid.gov website.

Federal Direct Loan Program

This is one of the federal student aid programs of the U.S. Department of Education. These loans were previously referred to as Stafford Loans. The loan is available when enrolled at least half-time (undergraduate: 6 hours; graduate: 4.5 hours) 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.

For the most current information about interest rates, loan origination fees, and repayment plans, visit the Interest Rates and Fees for Federal Student Loans page on StudentAid.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. Loan funds will be disbursed electronically to the student’s UE student account at the beginning of each enrolled semester. If the loan funds overpay the University charges, any remaining amount of credit will be refunded to the student each semester. 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.

Master Promissory Note and Entrance Counseling: Federal regulations require that first-time borrowers and students new to UE complete a Master Promissory Note and Entrance Counseling. Both are done at StudentAid.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

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)
Aggregate Limits
Undergraduate $31,000 (max $23,000 subsidized) $57,500 (max $23,000 subsidized)
Graduate N/A $138,500

Federal Direct Loan Repayment Resources

  • 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. You can view federal loan servicer's contact information on the StudentAid.gov website.
  • 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, cancelled, or discharged.
  • Exit Counseling: Direct Loan borrowers are required to complete online Exit Counseling at StudentAid.gov upon graduation or withdrawal from the University. More information about this requirement is offered to students each semester via email and in-person or virtual loan repayment sessions.
  • Loan Borrowing History: Students can find their federal loan borrowing history and total amount borrowed in a variety of ways.
    • Students receive a Historical Loan Information email each spring from the Office of Student Financial Services as mandated by Indiana State law.
    • The home screen of Financial Aid Self-Service also provides the student’s federal loan borrowing history as of the most recent FAFSA submission.
    • When completing Exit Counseling via studentaid.gov, the total Direct Loan amount borrowed is displayed.
    • Log in to your federal loan servicer’s website. Your loan servicer can be found by logging into StudentAid.gov.
    • Students may also call Federal Student Aid at 1-800-557-7394 for more assistance.

Federal Direct PLUS Loan for Parents (PLUS)

Administered by the U.S. Department of Education (ED), 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 this loan program. Parents must pass a credit check performed by ED to be eligible for this loan. Please review the frequently asked questions below or visit the PLUS Loan Parent FAQs page on StudentAid.gov for more information.

Related Information

Who can apply for a Parent PLUS loan?

You qualify as a parent for purposes of receiving a Direct PLUS Loan on behalf of a dependent undergraduate student if you are:

  • a biological parent of the student;
  • a legal adoptive parent of the student; or
  • the spouse of the student's biological or legal adoptive parent (the student's stepparent), and you are considered to be a parent in accordance with the instructions on the Free Application for Federal Student Aid (FAFSA®) form for purposes of reporting your income and assets on the FAFSA form.

If you're not a parent as defined above, you would not be eligible to use the Parent PLUS Loan on behalf of a dependent undergraduate student.

How do I request a Parent PLUS Loan?

The PLUS Loan is applied for online at StudentAid.gov. In order to log into this site, you must have a Federal Student Aid username and password (FSA ID) associated to you, the parent. You may create this ID through StudentAid.gov. Within 48 hours of submitting the loan 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 Office of Student Financial Services in order for the loan to be finalized.

You, the parent, must also complete the Federal Direct PLUS Loan Master Promissory Note (MPN) at studentaid.gov. The MPN explains the terms and conditions of your loan and is your legal agreement to repay your loan to ED. In most cases, a single MPN can be used for loans that you receive over multiple academic years. (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.)

How much can I borrow?

There are no set borrowing limits for Direct PLUS Loans, but you may not borrow more than the cost of your child’s education minus any other financial aid received. The school will determine the actual amount you may borrow.

What is the interest rate?

The interest rate for a Direct PLUS Loan is determined annually for new loans that are made between July 1 of one year and June 30 of the following year. Each loan will have a fixed interest rate for the life of the loan. The most current interest rate information can be found on the Interest Rates and Fees for Federal Student Loans web page of the StudentAid.gov website.

Is there a charge for a Direct PLUS Loan?

Yes. ED deducts a loan origination fee, a percentage of the principal amount of the loan, before you receive any loan money, so the loan amount you actually receive will be less than the amount you have to repay. Current loan origination fees can be found on the Interest Rates and Fees for Federal Student Loans web page of the StudentAid.gov website.

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. The federal origination fee is withheld before the loan proceeds are sent. If PLUS loan funds overpay the semester charges, the excess may be refunded as directed by the parent, to either the parent or student, or applied to a future term.

When do I have to begin repaying my loan?

Repayment begins within 60 days after the full amount that you have borrowed for the school year has been disbursed. However, you may be able to defer repayment while your child is enrolled at least half-time, and for an additional six months after your child graduates or drops below half-time enrollment status. Deferment is requested within the online loan application or through the loan servicer.

How will I repay the loan?

The Dept. of Education will assign repayment of your PLUS Loan to one of their federal loan servicers. The servicer will handle billing and other customer service functions related to your loan. This company will contact you after the first disbursement is made to provide you with their information and with repayment options.

How much time will I have to repay my loan and how much will I have to pay each month?

Generally, you’ll have from 10 to 25 years to repay your loan, depending on the repayment plan that you choose. Your required monthly payment amount will vary depending on how much you borrowed, the interest rates of your loans, and your repayment plan. You can change plans at any time. There’s no penalty if you make payments before they are due or pay more than the amount due each month.

Can I transfer the loan to my child for repayment?

No. A Direct Parent PLUS Loan cannot be transferred to your child, or consolidated with your student’s loans. You are responsible for repaying the loan.

Divorced and Separated Parent Borrowers

Federal regulations allow both parents to apply for separate PLUS loans. When both parents apply for a PLUS loan, the excess funds must be refunded to the student.

What if my credit check is declined?

If the 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 Office of Student Financial Services 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 StudentAid.gov.

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. After using the maximum eligibility for the federal unsubsidized loan, the graduate student may utilize this resource. The maximum eligibility for the Grad PLUS Loan is the student’s cost of attendance budget for his or her program minus any financial assistance received. Students apply online for the Plus Loan at StudentAid.gov.

Within 48 hours of submitting the application, our office receives confirmation of the application and responds directly to the student's 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 Office of Student Financial Services in order for the loan to be finalized. Master Promissory Note and Entrance Counseling for the Grad PLUS Loan must also be completed at studentaid.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 (with the exception of pre-nursing) 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 Student Financial Services. 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.

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