Federal Direct Loans

Direct Loans are low-interest loans offered through the U.S. Department of Education for students and parents to help cover the cost of higher education. Students may be eligible to receive subsidized and unsubsidized loans. 

Direct Subsidized Loans are available only to undergraduate students who have financial need and the terms of the loan are slightly better than that of an unsubsidized loan in that the U.S. Department of Education pays the interest while the student is:

  • still attending school at least half-time
  • in the first 6-months after they leave school, and
  • during any deferment period.

With an Unsubsidized Direct Loan, interest is accrued as soon as they are awarded and must be paid while the student is attending a school or allowed to accumulate and added to the principal amount of the loan. 

The interest rates for both loans are published each year on July 1st.

Eligibility

Undergraduate students with financial need.

Terms

  • Must be enrolled at least half-time (6 undergraduate credits)
  • Must be enrolled in a program leading to a degree or teacher certification
  • Loan amounts are determined based upon the cost of attendance and other financial aid provided
  • U.S. Citizenship Required
  • Undergraduate Fixed Interest rate of 4.53% (Loans disbursed 7/1/2019 – 6/30/2020)
  • Interest on the loan is paid by the Department of Education while the student is enrolled and during periods of grace and deferment
  • Loan fee of 1.059% (Loans disbursed 10/1/2019 – 9/30/2020)
  • Annual  & Aggregate Loan Limits Apply
  • Maximum Eligibility Period = 150% of the published length of the current program. (For a four-year bachelor degree program the maximum length of time to receive loans would be 150% of 4 years or 6 years.)
  • Must meet Satisfactory Academic Progress
  • Repayment begins 6 months after a student graduates, no longer enrolled, or drops below half-time enrollment status.

How to Apply

To determine eligibility, students must complete the Free Application for Federal Student Aid (FAFSA).

Next Steps 

Once a student has completed their FAFSA and it is processed through SVSU’s Office of Scholarships and Financial Aid, they will receive a financial aid Award Letter listing the type and amount of financial aid offered.  If eligible, their award letter will reflect Subsidized and/or Unsubsidized Loans and the amount.

Refer to section for First Time Borrowers to learn about Entrance & Exit Loan Counseling and signing your Master Promissory Note (MPN).

 


Eligibility

Undergraduate and graduate students regardless of financial need.

Terms

  • Must be enrolled at least half-time
    • Half-time status – 6 undergraduate credits/5 graduate credits
  • Must be enrolled in a program leading to a degree or teacher certification
  • Loan amounts are determined based upon the cost of attendance and other financial aid provided
  • U.S. Citizenship Required
  • Undergraduate Fixed Interest Rate of 4.53% (Loans disbursed 7/1/2019 – 6/30/2020)
  • Graduate Fixed Interest Rate of 6.08% (Loans disbursed 7/1/2019 – 6/30/2020)
  • Interest on the loan is the responsibility of the student while enrolled and during periods of grace and deferment
  • Loan fee of 1.059% (Loans disbursed 10/1/2019 – 9/30/2020)
  • Annual  & Aggregate Loan Limits Apply
  • Must meet Satisfactory Academic Progress
  • Repayment begins 6 months after a student graduates, no longer enrolled, or drops below half-time enrollment status.

How to Apply

To determine eligibility, students must complete the Free Application for Federal Student Aid (FAFSA).

Next Steps

Once a student has completed their FAFSA and it is processed through SVSU’s Office of Scholarships and Financial Aid, they will receive a financial aid Award Letter listing the type and amount of financial aid offered.  If eligible, their award letter will reflect Subsidized and/or Unsubsidized Loans and the amount.

Refer to section for First Time Borrowers to learn about Entrance & Exit Loan Counseling and signing your Master Promissory Note (MPN).

 


Graduate Students or Parents of Undergraduate Students

Plus loans are federal loans that graduate students and parents of dependent undergraduate students can use to help pay for college.

Eligibility

Graduate students and parents of dependent undergraduate students with good credit history.

Terms

Borrower:

  • Must not have an adverse credit history or must obtain an endorser
  • Loan amounts are determined based upon the cost of attendance and other financial aid provided to the student
  • Fixed Interest Rate of 7.08% (Loans disbursed 7/1/2019 – 6/30/2020)
  • Interest on the loan is the responsibility of the borrower while enrolled and during periods of grace and deferment
  • Loan fee of 4.236% (Loans disbursed 10/1/2019 – 9/30/2020)
  • Repayment
    • Student Borrowers - begins 6 months after a student graduates, no longer enrolled, or drops below half-time enrollment status
    • Parent Borrowers - begins once the loan is paid out unless a deferment is requested.

Student:

  • Must be enrolled at least half-time
    • Half-time status - 6 undergraduate credits/5 graduate credits
  • Must be enrolled in a program leading to a degree or teacher certification
  • Must meet Satisfactory Academic Progress

How to Apply

1.  To determine eligibility, students must complete the Free Application for Federal Student Aid (FAFSA).

2.  The parent or graduate student must complete an online application at www.studentloans.gov (Since the credit check is only valid a limited number of days, you can complete this process no earlier than May 1 for each Fall semester)

  • The applicant will then receive a decision of approval or denial
  • SVSU will receive those results within 1-3 days
  • If approved, the Federal Direct PLUS Loan will appear on the student’s Financial Aid Award Letter (visible at my.svsu.edu under Self-Service)


Note: When we receive your PLUS application during the academic year, we will assume that you are requesting the loan for the Fall and Winter semesters. If you would like the loan for only one semester, please contact the Campus Financial Services Center as soon as possible at (989) 964-4900.

3.  Options if the Loan is Denied:

  • Undergraduate Students:   Your additional unsubsidized loan eligibility will be added to your Financial Aid Award Letter, and you must sign to accept those additional loan funds
  • Graduate Students: May apply for an Alternative Loan or a Payment Plan.

Next Steps

Once a student has completed their FAFSA and it is processed through SVSU’s Office of Scholarships and Financial Aid, they will receive a financial aid Award Letter listing the type and amount of financial aid offered.  If eligible, their award letter will reflect the Plus Loan and the amount.


 


Student Borrower Requirements

If you are a first time student borrower at SVSU, you will have to complete Entrance Loan Counseling before federal loan funds can be credited to your account or sent to you. You may complete this requirement on line at www.studentloans.gov. 
 
You must have a Department of Education FSA ID in order to complete loan counseling online. If you have forgotten your FSA ID or do not have one, go to www.fsaid.ed.gov for more information. 


As a first time borrower you must complete a Direct Loan Electronic Master Promissory Note (MPN). The electronic MPN site allows you to complete and sign a MPN over the web as an alternative to using a paper MPN. Please do not go to the site to complete the process until we have sent you correspondence to do so.

To complete your electronic MPN, you will need to provide the following information: your social security number, your permanent address and telephone number, your driver's license number and state, and names, addresses, and phone numbers for two references.

Go to www.studentloans.gov to complete the electronic MPN. Allow enough time to complete the MPN process in a single session. You cannot save your work and return to it at a later time. Once you are at the website, be sure to review the "What You Need". Then select the type of loan that you have and proceed through the process.

You must have a Department of Education FSA ID in order to complete loan counseling online. If you have forgotten your FSA ID or do not have one, go to www.fsaid.ed.gov for more information.


When you graduate or leave school, you must complete Exit Loan Counseling at www.studentloans.gov, where the emphasis is on being informed about your repayment obligations and selecting a repayment plan. Once you log into the website with your FSA ID, you will want to select "Choose Counseling", and then choose "Exit Counseling".

Federal Guides to assist you in the Repayment Process:
Exit Counseling (319KB)
Repaying Your Loans (4,344KB)


In certain situations, you can have your federal student loan forgiven, canceled, or discharged.

Find out whether you qualify due to your job, disability, or other circumstances.



Federal Direct Loans FAQs

SVSU is a Direct Lending school. In the Direct Loan program, the U.S. Department of Education currently has a group of loan servicers and more are added as necessary. The loans are the same and have the same options, no matter what servicer your loan is assigned to. The federal government will assign all of a student’s Federal Direct Loans to the same servicer when possible. A student can verify his/her loan servicer and gather contact information at https://nslds.ed.gov.


Federal Direct Loans are typically sent in 2 disbursements, one for Fall semester and one for Winter semester. One semester only loans have only one disbursement. The earliest a Direct Loan can be disbursed to the school is 10 days before the semester begins. Once the school receives the disbursement, it is processed, disbursed to the student account to pay for any institutional charges necessary, and the remainder is then refunded within 14 days.


Direct Subsidized Loans are interest-free while the student is in school at least half-time. Undergraduate Direct Unsubsidized Loans currently have a fixed interest rate of 4.45% (7/1/17 - 6/30/18). Graduate Direct Unsubsidized Loans currently have a fixed interest rate of 6% (7/1/17 - 6/30/18). Interest starts as soon as the first disbursement happens. Students receive quarterly interest statements from Direct Loans. Students do not have to pay this balance, but are encouraged to do so. If the interest is not paid, it is capitalized with the principal upon repayment. What does that mean? The student would pay interest on the interest.  To learn more visit Federal Student Aid.


There is a processing fee assessed to all Direct Loans by the federal government. This means the funds the institution receives for the student loan is a certain % less than what the loan was taken out for. For loans disbursed 10/1/2015 – 9/30/2016, these fees are 1.068% for Federal Direct Subsidized/Unsubsidized Loans and 4.272% for Federal Direct PLUS Loans.


Students have one 6-month grace period for every loan. If a student leaves school and returns, they can have their loans deferred again. However, a student only gets one grace period. Students should contact their lender. (See “Repayment” below.)


Students must be at least half-time to be eligible for a Federal Direct Loan. This is determined by the school’s half time policy. SVSU defines half-time as 6 credits for undergraduate and 5 credits for graduate students.


Typically, if students consolidate their Federal Direct Loans, Direct Loans will take the average of all their interest rates and figure one monthly loan payment based on that calculation. Therefore, because the in-school interest rate is lower, it is more beneficial to consolidate while in school or in the grace period.

WARNING: Consolidating loans before the grace period or during the grace period can force a student to have a shorter grace period or lose the grace period all together. Students should contact their loan servicer or go to the servicer’s website for more specific information. Consolidation of Direct Loans can currently be done at www.studentloans.gov. Students can also log onto https://nslds.ed.gov for their aggregate loan amount and to see what servicer they are assigned to. What does that mean? The student can see all the Federal Student Loans they have taken out - it's the total amount borrowed.


Students must complete entrance loan counseling before a loan is disbursed. This is available at www.studentloans.gov. Students typically need to complete this only one time at a school, but some situations may cause this to be required again if there has been a lapse in attendance.

Promissory Note: SVSU will send a letter to the student if a promissory note is needed. Students must complete a promissory note at www.studentloans.gov before a loan is fully processed. The student will need to read, review, and electronically sign the promissory note (student should obtain a FSA ID at https://fsaid.ed.gov, if the student does not already have one). Students typically need to complete this only one time at a school, but some situations may cause this to be required again if there has been a lapse in attendance. Each Master Promissory Note is good for a 10-year period.


First-time freshmen borrowers have a first-disbursement date 30 days after the semester begins.


Federal Direct Loans are regulated by yearly and aggregate (total) loan limits.

These are as follows:

 

Dependent Students:

 

Independent Students:

 

Class Level 

Yearly Loan Limit

Aggregate

Yearly Loan Limit

Aggregate

Freshmen
(0-30 credits)

$5,500
(up to $3,500 can be subsidized, if eligible)

$31,000
($23,000 subsidized)

$9,500
(up to $3,500 can be subsidized, if eligible)

$57,500
($23,000 subsidized)

Sophomore
(31-61 credits)

$6,500
(up to $4,500 can be subsidized, if eligible)

 

$10,500
(up to $4,500 can be subsidized, if eligible)

 

Junior/Senior/
2nd Bachelors
(62+ credits)

$7,500
(up to $5,500 can be subsidized, if eligible)

 

$12,500
(up to $5,500 can be subsidized, if eligible)

 

Teacher Certification

$5,500
(subsidized and/or unsubsidized)

 

$12,500
(up to $5,500 can be subsidized, if eligible)

 

Graduate

 

 

$20,500
(unsubsidized only)

$138,500


CONTACT US.


Scholarships & Financial Aid
Wickes Hall 141
cfsc@svsu.edu
(989) 964-4900

CFSC
Wickes Hall 131A
cfsc@svsu.edu
(989) 964-4900

Registrar
Wickes Hall 151
registrar@svsu.edu
(989) 964-4085