Federal Direct Loan Program

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Direct Loans

I. Required Counseling Sessions:
Students who are requesting loans must complete the counseling sessions. Your financial aid office will send the requirements to your student email address.

II. Once you have completed the Direct Loan Counseling Sessions above, you will need to complete the following:

Department of Education Direct Stafford Loan Entrance and Exit sessions.

III. Direct Loan Program Information


As with all federal student aid, you apply for Direct Loans by filling out the Free Application for Federal Student Aid (FAFSA). Most students use FAFSA on the Web to complete their applications. The information on your FAFSA is transmitted to the schools that you list on the application, and those schools use the information to assess your financial need for student aid.  You must be enrolled in 6 or more units. 

Steps to apply for a loan after the FAFSA has been completed.
Contact your financial aid office; they will guide you in the completion of the required documents.

Prior to distribution of the second disbursement, you will be required to complete exit counseling.
Repayment begins six months after you graduate or cease to be at least a halftime student. You will generally have 10 years to pay back your loan. Your monthly payment will usually be more than $200, but never less than $50. It is the borrower's responsibility to maintain contact with the United States Department of Education and to establish a repayment schedule. The borrower's failure to inform the United States Department of Education of changes in enrollment status, anticipated graduation dates, current address, name, deferment eligibility, or college of attendance may result in default on the student loan.

The award package

Direct Loans are generally awarded as part of a larger "award package," which may contain other types of aid as well, to help you meet the costs of going to college or career school.

The Direct Loan Program offers the following types of loans:

  • Interest subsidy during the six-moth grace period is eliminated for new Stafford Loans made on or after July 1, 2012, and before July 1, 2014.  The repayment period still begin 6 months after the student is no longer enrolled at least half-time, but interest that accrues during those six months will be payable by the student rather than be subsidized by the federal government.

  • Unsubsidized: not based on financial need; interest is charged during all periods, even during the time a student is in school and during grace and deferment periods.

  • PLUS: unsubsidized loans for the parents of dependent students and for graduate/professional students. PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest is charged during all periods.

  • Consolidation: Eligible federal student loans can be combined into one Direct Consolidation Loan.

Student borrowers are not required to begin making payments until after they drop below halftime attendance. See When you graduate or leave school for more information.

The Financial Aid Office will tell you how much you may borrow and the types of loans your are eligible to receive. The information below will give you an idea of how much you may be eligible to receive.

Note: PLUS loan borrowers cannot have an adverse credit history (a credit check will be done).

Accepting a loan

The Financial Aid Office will tell you the loan amounts that it is offering, usually in an "award letter" that lists all of your proposed financial aid awards (your award package).

You should evaluate the aid offer carefully. In the case of loans, keep in mind that whatever amount you borrow must be paid back with interest. If your living expenses are not as high as the standard allowance projected by your school, you may not have to borrow as much as the amount in the award letter.

To get an idea of your monthly loan payments after you graduate, take a look at our repayment calculator.

To get an idea of your college expenses, use our budget calculator.

You have the right to decline the loan or to request a lower loan amount. In the award letter your school will tell you how to do this.

Credit check & endorser alternative

When you apply for a Direct PLUS Loan, the Department will check your credit history. To be eligible to receive a PLUS loan, you must not have an adverse credit history. If you are determined to have an adverse credit history, you may still receive a Direct PLUS Loan if you obtain an endorser who does not have an adverse credit history. An endorser is someone who agrees to repay the Direct PLUS Loan if you do not repay the loan. If you are a parent borrowing on behalf of your dependent student, the endorser may not be the student on whose behalf a parent obtains a Direct PLUS Loan. In some cases, you may also be able to obtain a Direct PLUS Loan if you document to our satisfaction that there are extenuating circumstances related to your adverse credit history.

Loan limits

The maximum amount you can borrow each year in Direct Subsidized and Unsubsidized Loans depends on your grade level and on whether you are a dependent student or an independent student. The following table shows the maximum amount of money you may borrow each academic year in Direct Subsidized and Unsubsidized Loans:


Dependent student1

Independent student2

1st-year undergraduate

$5,500 (maximum $3,500 subsidized)

$9,500 ($3,500)3

2nd-year undergraduate

$6,500 ($4,500)

$10,500 ($4,500)

3rd- and 4th-year undergraduate

$7,500 ($5,500)

$12,500 ($5,500)


NA (All graduate and professional students are considered independent.)

$20,500 ($8,500)

1. Except those whose parents are unable to borrow a PLUS loan.
2. These limits also apply to dependent students whose parents are unable to borrow a PLUS loan.
3. The numbers in parentheses represent the maximum amount that may be subsidized.

The actual loan amount you are eligible to receive for an academic year is determined by your school and may be less than the maximum annual amounts shown in the chart above.

Below are the aggregate (total) limits for Direct Subsidized and Unsubsidized Loans:

  • $31,000 for dependent undergraduate students excluding those whose parents are unable to borrow a PLUS Loan (no more than $23,000 may be subsidized)

  • $57,500 for independent undergraduate students and dependent undergraduates whose parents are unable to borrow a PLUS loan (no more than $23,000 may be subsidized)

  • $138,500 for graduate or professional students (no more than $65,500 may be subsidized; includes loans for undergraduate study)

These aggregate limits include both Direct Subsidized and Unsubsidized Loans and any subsidized and unsubsidized Federal Stafford Loans received through the Federal Family Education Loan (FFEL) Program.

With a Direct PLUS Loan, a graduate/professional student or the parent of a dependent student can borrow up to the cost of the student's attendance minus other financial aid the student receives.

The aggregate suggested loan limit for students is $15,000.

While you're in repayment

Generally, you'll have from 10 to 25 years to repay your loan, depending on which repayment plan (there are several) you choose.

The Direct Loan Servicing Center will notify you of the date your first payment is due. If you do not choose a repayment plan, we will place you on the Standard Repayment Plan, with fixed monthly payments for up to 10 years. Most Direct Loan borrowers choose to stay with the Standard Repayment Plan, but there are other options for borrowers who may need more time to repay or who need to make lower payments at the beginning of the repayment period.

You can change repayment plans at any time by going to the Direct Loan Servicing Center's website and logging in to your account.

Automated payments (electronic debit)

When we send your first bill, we'll tell you how to you can sign up for our electronic debit account (EDA) option and have your bank automatically make your monthly loan payments for you from your checking or savings account. You won't have to write checks, use stamps, or worry if your payment will get to us by the due date. In addition, Direct Loans offers a 0.25% reduction in the interest rate on your loans during any period when your payments are made through EDA.

Trouble making payments

If you're having trouble making payments on your loans, contact the Direct Loan Servicing Center as soon as possible. The Direct Loan Servicing Center staff will work with you to determine the best option for you. Options include:

  • Changing repayment plans.

  • Deferment, if you meet certain requirements. A deferment allows you to temporarily stop making payments on your loan.

  • Forbearance, if you don't meet the eligibility requirements for a deferment but are temporarily unable to make your loan payments. A forbearance allows you to temporarily stop making payments on your loan, temporarily make smaller payments, or extend the time for making payments. Read more about deferments and forbearance.

If you stop making payments and don't get a deferment or forbearance, your loan could go into default, which has serious consequences—see below.

Your loan first becomes "delinquent" if your monthly payment is not received by the due date. If you fail to make a payment, we'll send you a reminder that your payment is late. If your account remains delinquent, we'll send you warning notices reminding you of your obligation to repay your loans and the consequences of default.

If you are delinquent on your loan payments, contact the Direct Loan Servicing Center immediately to find out how to bring your account current. Late fees may be added, and your delinquency will be reported to one or more national consumer reporting agencies (credit bureaus), but this is much better than remaining delinquent on your payments and going into default.

Consequences of default

If you default:

  • The Department of Education will require you to immediately repay the entire unpaid amount of your loan.

  • The Department of Education may sue you, take all or part of your federal and state tax refunds and other federal or state payments, and/or garnish your wages so that your employer is required to send us part of your salary to pay off your loan.

  • The Department of Education will require you to pay reasonable collection fees and costs, plus court costs and attorney fees.

  • You may be denied a professional license.

  • You will lose eligibility for other federal student aid and assistance under most federal benefit programs.

  • You will lose eligibility for loan deferments.

  • The Department of Education will report your default to national consumer reporting agencies (credit bureaus).

For more information and to learn what actions to take if you default on your loans, see the website for the Department's Default Resolution Group.

Loan cancelation (forgiveness or discharge)

Under certain conditions, you can have all or part of your loan canceled or discharged. Read more about loan cancelation.

What's next?

Stay in touch with the Direct Loan Servicing Center—let them know if you've changed your name or permanent address, and make sure that they know when you've completed your educational program or transferred to another school.

Deferment and Forbearance

If you want additional information to help you avoid default, visit the Department's Debt Collection Service website.


A deferment is a postponement of payment on a loan, during which interest does not accrue if the loan is subsidized.

You may qualify for a deferment while you are:

Enrolled at least half time in an eligible postsecondary school or studying full time in a graduate fellowship program or an approved disability rehabilitation program.
Unemployed or meet our rules for economic hardship (limited to 3 years).
You may also be eligible for a deferment based on qualifying active duty service in the U.S. Armed Forces or National Guard. Refer to the MPN for your loan or contact the Direct Loan Servicing Center for more information about specific qualifications for deferment based on military service.

In most cases, you need to submit a deferment request to the Direct Loan Servicing Center along with documentation of your eligibility for the deferment. Visit their website for more information.

If you've gone back to school and the Direct Loan Servicing Center receives enrollment information that shows you're enrolled at least half time, it will automatically put your loans into deferment and notify you. You have the option of canceling the deferment and continuing to make payments on your loan.

If you are in default on your loan, you are not eligible for a deferment or forbearance.


If you can't make your scheduled loan payments, but don't qualify for a deferment, we may be able to give you a forbearance. A forbearance allows you to temporarily stop making payments on your loan, temporarily make smaller payments, or extend the time for making payments. Some common reasons for getting a forbearance are illness, financial hardship or serving in a medical or dental internship or residency. See your copy of the Borrower's Rights and Responsibilities Statement for more examples. You can get more information by calling the Direct Loan Servicing Center at 1-800-848-0979.

Under certain circumstances, we can automatically give you a forbearance, for instance, while we're processing a deferment, forbearance, cancelation, change in repayment plan or consolidation, or if you're involved in a military mobilization or a local or national emergency.

Cancelation and Consolidation

Conditions for canceling all or part of your loan

Teacher service. If you are a new borrower* and are a fulltime teacher in a low-income elementary or secondary school for 5 consecutive years, you may be able to have as much as $17,500 of your subsidized or unsubsidized loans canceled. This provision is not available for borrowers of PLUS Loans. For more information, see Student Aid on the Web or call the Direct Loan Servicing Center at 1-800-848-0979.

* You are considered a new borrower if you did not have an outstanding balance on an FFEL or Direct Loan on Oct. 1, 1998, or on the date you obtained an FFEL or Direct Loan after Oct. 1, 1998.

Public service. If you are employed in certain public service jobs and have made 120 payments on your Direct Loans (after Oct. 1, 2007), the remaining balance that you owe may be forgiven. Only payments made under certain repayment plans may be counted toward the required 120 payments. You must not be in default on the loans that are forgiven.

School-related discharges. In certain cases, you may be able to have all or a part of your loan canceled because:

Your school closed before you completed your program.
Your school forged your signature on your promissory note or falsely certified that you were eligible to get the loan.
Your loan was falsely certified because of identity theft (additional requirements apply).
You withdrew from school but the school didn't pay a refund that it owed under its written policy or our regulations. Check with the school to see how refund policies apply to federal aid at the school.
In general, you must repay your loan even if you don't graduate, can't find work in your field of study, or are dissatisfied with the education program.

Disability, bankruptcy, or death.

Your loan may be discharged if you are determined to be totally and permanently disabled and you meet certain requirements during a 3-year conditional discharge period. To apply for this discharge, you must provide a physician's statement that you became totally and permanently disabled after the loan was made. See your copy of the Borrower's Rights and Responsibilities Statement for more information on the procedures and conditions for this discharge.
Your loan may be canceled if it is discharged in bankruptcy. This is not an automatic process-you must prove to the bankruptcy court that repaying the loan would cause undue hardship.
For a student who dies, the loan will be canceled if a family member or other representative provides an original or a copy of the original or certified copy of the death certificate to the Direct Loan Servicing Center.
Call the Servicing Center (1-800-848-0979) for more information or to get a cancelation form. You can also find more information in your copy of the Borrower's Rights and Responsibilities Statement or on the "Other Forms" page at the Servicing Center's website.


There may be advantages to consolidating (combining) your federal student loans into one loan, starting with the convenience of making a single monthly payment. Consolidation generally extends the repayment period, resulting in a lower monthly payment. This may make it easier for you to repay your loans. However, you will pay more interest if you extend your repayment period through consolidation since you will be making payments for a longer period of time. Contact the Direct Loan Consolidation Center for more information: at 1-800-557-7392, TTY for the hearing-impaired at 1-800-557-7395. The Direct Loans Consolidation website also has an online calculator that you can use to find out how much you'll pay each month if you consolidate.

Resolve a Problem

The FSA Ombudsman web site provides the process and the resources to assist you in resolving problems with your student loan. This page explains the process, and we have also provided a diagram of the process.

If you have only a question, see learning about your loan.

If you know you have a problem, here are some steps you can take.

A. Take steps to resolve it yourself.

Figure out what your problem is.
If it is a problem with your loan, call your loan servicer (for contact information, see our list of links). Also see our tips for dealing with your servicer.
If you don't know who's servicing your loan, use the National Student Loan Data System or call 1-800-4-FED-AID.
Learn how to deal with your loan servicer.
For more resources, see our list of links and take a look at our self-resolution checklist. Also see our FAQ on resolving loan problems.

B. If you are unable to resolve the problem yourself

It may be time to contact the FSA Ombudsman for assistance. First, take the following steps:

Prepare the materials you will need for getting help from the Ombudsman's office.
Contact the Ombudsman.
Learn about what you can expect to happen after you contact the Ombudsman.
Avoid having problems in the future.
The District participates in the Direct Loan Program only and will not certify private or alternative loans.

If you need assistance regarding the any of the loan process, please contact your financial aid office.

In school deferments requesting your enrollment status are completed at no charge in the Records Office.