Federal Loans
If you have exhausted all federal and state aid opportunities, including grant and scholarships, and have looked into assistance you can get through your local campus, federal loans might be a good way to fill in any gaps.
Federal loans are a means of paying for college and can be awarded regardless of financial need. They will need to be paid back and have certain eligibility requirements. As a result of recent legislation, after July 1, 2010, all students must borrow Stafford Loans through the Federal Direct Loan Program.
To qualify for any form of financial aid, including federal loans, the first step is filing a Free Application for Federal Student Aid (FAFSA).
A Direct Stafford Student Loan is a low-interest loan authorized by the federal government to assist in paying for your college costs. You must be a fully accepted student, with a selected technology, making satisfactory academic progress, enrolled in at least 6 credits and attending all classes.
Entrance counseling is required for first-time Federal Direct Stafford loan borrowers prior to loan certification and disbursement. Exit counseling is required once you are no longer currently enrolled, enrolled less than half time, are scheduled to graduate, or have graduated. An Annual Student Loan Acknowledgement (ASLA) must be completed each year you accept a new federal student loan. Entrance and Exit Counseling and the ASLA can be satisfied by going to the following website: studentaid.gov.
There are two types of Federal Direct Stafford Loans:
Federal Direct Subsidized Stafford Loan
Subsidized Stafford Loans are based upon need, and the federal government pays the interest while you are enrolled at least half-time.
Direct Student Loans Maximum Eligibility Period
Please note: For all new borrowers who receive a loan on or after July 1, 2013 a 150% limitation is in effect. This means a student who is eligible for a subsidized loan will reach their subsidized limit at 150% of a program’s length of study. Once a student has reached their 150% limitation, their interest subsidy Loan limit will end on all outstanding loans that were disbursed after July 1, 2013, and interest will begin to accrue. Students are therefore encouraged to complete undergraduate study on a timely basis.
For example, if you are enrolled in a 2-year associate degree program, the maximum period for which you can receive Direct Subsidized Loans is 3 years (150% of 2 years = 3 years).
Your maximum eligibility period is based on the published length of your current program. This means that your maximum eligibility period can change if you change programs. Also, if you receive Direct Subsidized Loans for one program and then change to another program, the Direct Subsidized Loans you received for the earlier program will generally count against your new maximum eligibility period.
For additional information visit the Federal Student Aid website.
Federal Direct Unsubsidized Stafford Loan
Unsubsidized Stafford Loans are not need-based, and the student borrower is responsible for interest that accrues on unsubsidized Stafford Loans while you are attending school. Any unpaid interest will be capitalized (added to the principal balance) when repayment begins. Therefore, you will then pay interest on a higher amount.
Payment of the principle itself, on both the subsidized and unsubsidized loans, does not begin until six months after graduation, provided the student remains enrolled on at least a half-time (6 credits) basis. Repayment period is ten years.
| Year | Dependent Undergraduate Student (except students whose parents are unable to obtain PLUS Loans) | Independent Undergraduate Student (and dependent students whose parents are unable to obtain PLUS Loans) | Graduate and Professional Degree Student |
| First Year | $5,500—No more than $3,500 of this amount may be in subsidized loans. | $9,500—No more than $3,500 of this amount may be in subsidized loans. | $20,500—No more than $8,500 of this amount may be in subsidized loans. |
| Second year | $6,500—No more than $4,500 of this amount may be in subsidized loans. | $10,500—No more than $4,500 of this amount may be in subsidized loans. | |
| Third and Beyond (each year) | $7,500—No more than $5,500 of this amount may be in subsidized loans. | $12,500—No more than $5,500 of this amount may be in subsidized loans. | |
| Maximum Total Debt from Stafford Loans when you graduate (aggregate loan limits) | $31,000—No more than $23,000 of this amount may be in subsidized loans. | $57,500—No more than $23,000 of this amount may be in subsidized loans. | $138,500—No more than $65,500 of this amount may be in subsidized loans. The graduate debt limit includes Stafford Loans received for undergraduate study. |
Steps to applying for a Federal Direct Stafford Loan
Step 1. Log into your student portal and then click Student Information System. Click Financial Aid. Select the aid year in the drop-down box beside Award Year. Click Award Offer and scroll to bottom of page until you see the box labeled Loans.
Please, allow three business days for the loan to be processed and then you can complete each relevant step below.
The remaining steps are to be completed through the Federal Direct Stafford Loan website: studentaid.gov.
Step 2. Sign in to studentaid.gov using your FSA ID username and password.
Step 3. Complete a Federal Direct Stafford Loan Entrance Counseling session.
Step 4. Complete the Federal Direct Stafford Loan Master Promissory Note.
Step 5. Complete an Annual Student Loan Acknowledgement.
To qualify for either the Subsidized or Unsubsidized Stafford Loan, you must be:
- A fully accepted student, with a selected technology
- Make satisfactory academic progress
- Be enrolled in at least 6 credits and attending all classes
Other requirements:
- Entrance counseling for first-time borrowers
- Exit counseling once you are no longer currently enrolled, enrolled less than half time, are scheduled to graduate, or have graduated.
- Entrance and Exit Counseling can be satisfied by going to studentaid.gov.
Rates:
The applicable interest rate on Direct Loans disbursed between July 1, 2021 and June 30, 2022 is fixed at 3.73% for subsidized loans and 3.73% for unsubsidized loans. The Direct Loan origination fee effective October 1, 2020 until September 30, 2022 will be 1.057%.
- In response to the COVID-19 emergency relief period, the interest rate on all Direct Loans has been temporarily set at 0% until January 31, 2022. Once the COVID-19 emergency relief period ends, the rates previously described will be in effect.