Under the Federal Direct Loan Program, students may borrow money directly from the federal government without going through a private lender. Loan proceeds are deposited directly into student accounts each semester, eliminating the need for separate check processing. Repayment of the loan principal begins six months after the student is no longer attending school on at least a half-time basis and all loans may be consolidated under one servicer.
Federal Direct Subsidized/Unsubsidized Loan
“Subsidized” means the federal government pays the interest on these loans while the student is in school and during deferments. Students must show financial need to receive this type of loan. Subsidized loans are awarded to undergraduate students only.
“Unsubsidized” means the federal government does not pay the interest while the student is in school, during the grace period or in deferment. Students qualify for an unsubsidized loan regardless of financial need. Graduate students are only eligible for the unsubsidized loan. Students have the option of having the interest capitalized and paying that interest when they begin repayment or paying the interest on this loan while in school.
New APU students must who are accepting federal student loans must complete Entrance Counseling and a Master Promissory Note (MPN).
Federal regulations require that you participate in an entrance loan counseling session if you are a first-time, Federal Direct Student Loan borrower. The purpose of this counseling is to explain your rights and responsibilities as a first-time borrower, emphasize the legal, binding nature of your loan obligation, and make you aware of the consequences of default if you fail to repay your loan according to the terms of the note. Loan counseling may be completed on line at https://studentloans.gov . Loan funds cannot be disbursed to your account until entrance counseling is completed.
The master promissory note is a legal contract that requires the student to provide references and a student signature. The amount you may borrow each year is based on grade level, your student status and your continued eligibility. You may complete the MPN online at https://studentloans.gov by using your Federal Personal Identification Number (PIN). Use of the PIN qualifies as the student signature. If you do not have a PIN, you can obtain one at the U.S. Department of Education’s PIN site at http://www.pin.ed.gov . Please complete your master promissory note as soon as possible; your direct loan cannot be credited to your account until your MPN is on file with the federal direct loan processor.
Federal Direct Parent PLUS Loan (undergraduate students only)
This is a non-need-based loan for parents with good credit histories who choose to borrow for their dependent student(s). Under this program, parents can borrow up to the total cost of education minus other expected financial assistance. Parents may choose to defer payments on a PLUS loan until six months after the date the student ceases to be enrolled at least half time and pay accruing interest, or allow interest to be capitalized. Interest begins to accumulate at the time the first disbursement is made. Parents may choose to repay both principal and interest while the student is in school or take advantage of deferring payments.
The borrower can only be a biological parent or a custodial stepparent.
The parent borrower does not have to be the parent who completed the FAFSA. If parents cannot borrow a Direct PLUS Loan because the federal processor has denied their application, the dependent undergraduate student may be eligible to borrow additional amounts in the form of Unsubsidized Direct Loans.
Federal Direct Grad PLUS Loan
This loan is for students in graduate level programs only. You must be enrolled at least half time to receive the loan.
- You must file the FAFSA to be considered.
- The SFS Office will determine other direct loan eligibility before you may borrow the Graduate PLUS.
- This is a non-need based loan for students with good credit histories.
- Applicants may borrow up to the cost of attendance minus other financial assistance.
- Students will receive an automatic deferment while enrolled at least half time. The Grad PLUS is not a subsidized loan and interest will accrue.
Graduate students who wish to borrow the Graduate PLUS loan must also complete the PLUS MPN. The MPN is available online at https://studentloans.gov by using your Federal Personal Identification Number (PIN). Use of the PIN qualifies as the student signature. If you do not have a PIN, you can obtain one at the U.S. Department of Education’s PIN site at http://www.pin.ed.gov . Please complete your master promissory note as soon as possible; your direct loan cannot be credited to your account until your MPN is on file with the federal direct loan processor.
Credit approval is based on federally mandated criteria, not a credit score. In order to qualify you must not have any of the following items on your credit report:
- Any current delinquency of 90 days or more
- Any of the following within the preceding five years of the date of the credit check: default, bankruptcy, discharge, foreclosure, repossession, tax lien, wage garnishment, write-off of a Title IV debt, or open collection.
Credit approval is valid for 90 days. Your credit is evaluated every time you request a new loan unless you have had a credit decision within the preceding 90 days. If you think you may have one or more of the items outlined in the credit criteria listed above you may want to obtain your credit report in advance of applying for a Grad PLUS Loan. You should work to correct negative items on your credit as soon as possible.
Credit denial options include:
- Applying for the loan with an endorser, which is a credit worthy loan cosigner
- Correct any invalid information on your credit report and reapplying
- Appeal the denial with Application Services (contact Student Financial Services for details)
| Annual and Aggregate Loan Limits | |||
|---|---|---|---|
| Year | Dependent Undergraduate Student | Independent Undergraduate Student | Graduate and Professional Degree Student |
| First Year | $5,500 -No more than $3,500 of this amount may be subsidized loans | $9,500 -No more than $3,500 of this amount may be subsidized loans | $20,500 per academic year. Unsubsidized loan only. |
| Second Year | $6,500 -No more than $4,500 of this amount may be subsidized loans | $10,500 -No more than $4,500 of this amount may be subsidized loans | |
| Third year & beyond | $7,500 -No more than $5,500 of this amount may be subsidized loans | $12,500 -No more than $5,500 of this amount may be subsidized loans | |
| Maximum total for Loans | $31,000 -No more than $23,000 of this amount may be subsidized loans | $57,500 -No more than $23,000 of this amount may be subsidized loans | $138,500-No more than $65,500 of this amount may be subsidized loans. The graduate debt limit includes loans received for undergraduate study. |
