Federal Direct Loans

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

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 studentaid.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.studentaid.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 studentaid.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 studentaid.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.

Repayment - What to Expect Video

How to Manage Your Student Loans Video

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 5.5% (7/1/23 - 6/30/24). Graduate Direct Unsubsidized Loans currently have a fixed interest rate of 7.05% (7/1/23 - 6/30/24). 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 10/1/2023 – 9/30/2024, these fees are 1.057% for Federal Direct Subsidized/Unsubsidized Loans and 4.228% 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 studentaid.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 studentaid.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 studentaid.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://studentaid.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: