Federal Direct Loans For Undergraduates 2013-2014

The Office of Financial Aid encourages students to explore various grants and scholarship opportunities and to evaluate loan options carefully. Borrow only what is really needed and remember that loans must be repaid. Both loans require the completion of the Federal Application for Federal Student Aid FAFSA to determine a student’s financial need. The subsidized Direct Loan is for students who have a demonstrated financial need, as determined by the FAFSA. The unsubsidized Direct Loan is a non-need-based loan.

Recipients of a Federal Direct Loan are required to complete entrance counseling before the funds are disbursed. Students must also complete exit counseling upon dropping below half-time status, withdrawing or graduating

What is a Federal Direct Student loan?

Federal Direct Student loans are one form of student “self help” financial aid. Through the federal Direct Student loan program students borrow money for college from the federal government.

How much can I borrow?

  • $5,500.00 is the maximum annual amount a first year student is eligible for, no more than $3,500 of which can be subsidized.
  • $6,500.00 is the maximum annual amount a second year student is eligible for, no more than $4,500.00 of which can be subsidized.
  • $7,500.00 is the maximum annual amount a third or fourth year student is eligible for, no more than $5,500 of which can be subsidized.
  • Independent students and students whose parent(s) are denied a Federal PLUS Loan qualify for additional unsubsidized loans.

— Borrowing Limits for Direct Stafford Loans —

Subsidized Loan Base Amount

Additional Unsubsidized Loan Amount
(as of July 1, 2013)

For All Undergraduates

For Graduate Students*

For Dependent

For Independent

First Year



$2,000 ($5,500 total)

$6,000 ($9,500 total)




$2,000 ($6,500 total)

$6,000 ($10,500 total)

Third Year
and Beyond



$2,000 ($7,500 total)

$7,000 ($12,500 total)

Subsidized Loan Debt Limit

Total Loan Debt Limit (Subsidized* + Unsubsidized)


$65,500; limit includes Direct
Loans received as an undergraduate

(only $23,000 can be subsidized)

(only $23,000 can be Subsidized Loan)

What is the difference between a subsidized and an unsubsidized loan?

For the Federal Direct Subsidized Student Loan, the federal government will pay the interest until you enter your grace period; the time you are no longer enrolled on at least a half-time basis. Repayment begins six months after you cease to be enrolled at least half-time . The interest rate for Federal Direct Subsidized Loans for undergraduate students for which the first disbursement is made on or after July 1, 2013 and before July 1, 2014 will be 3.86%.

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 the Federal Direct Unsubsidized Student Loan, the government does not pay the interest while a student is in school as it does for the subsidized loan. Interest accrues and must be paid or capitalized during periods of enrollment in school and/or deferment. The interest rate for Federal Direct Unsubsidized Loans for all students disbursed on or after July 1, 2013 will be 3.86%.

Are there any federal loans available to parents?

The Federal Direct PLUS Loan (parent loan for undergraduate, dependent students) is a loan from the U.S. Department of Education for parents of undergraduate students who complete a FAFSA and meet general eligibility requirements. The amount your parent will be eligible to borrow for the 2013-2014 school year will be indicated on your award letter. The interest rate on PLUS loans is 6.41%. For information on how to apply for a Federal Direct PLUS Loan, refer to the Federal Direct PLUS Loan Process.

What fees, if any, are associated with these loans?

For Student Loans, an origination fee of 1.051% of the total loan will be assessed will automatically be deducted. For PLUS loans, an origination fee of 4.204% will be assessed and automatically deducted. The net disbursement will reflect these fees; therefore, the amount credited to the student’s account will be less than the loan amount. This fee is determined by the U.S. Department of Education.

Federal Direct Student Loans 2013-2014 Interest Rates

B. CBT College Institutional Loans

Institutional loans are provided by educational institutions as a way to help bridge the gap left by state and federal funds, as these funds are sometimes short of covering the entire cost of a college education. Funds are awarded to eligible students as part of the Financial Aid award process. Institutional loan options will be presented to the student with the financial aid estimates when other types of federal and institutional financing options have been exhausted.

  1. Loan Limits: There are no loans limits since it is based on the cost of the program and the gap that will be generated after taking into account other financial options. However, the loans cannot exceed an accumulated total amount of $3000.
  2. Interest Rate: There’s no interest rate applied on a loan if this payment is made before the graduation date. If the payments are extended after Graduation then a 5% rate will apply for the remaining balance on the principal.
  3. Loan Payments: Payments for an institutional loan is are due within the five first days of the month. If the student extended the payments after graduation, a new payment schedule containing the number of payments, interest rate, date of the first payment, and frequency of payments will be provided. Monthly payment amount depends on the amount borrowed.
  4. Minimum Payments: The minimum payment for a loan will be $50 to $150 per month based on the amount of the loan.
  5. Maximum Time Length: The maximum length of time for repayment of all loans is 5 years.

period: Institutional loan do not have a grace period.

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