Federal Direct Stafford Loans

Federal Direct Stafford Loans are low interest loans for students used to help pay for the cost of your education. The lender is the U.S. Department of Education rather than a bank.

There are two types of Federal Direct Stafford Loans available to students—subsidized and unsubsidized. Your eligibility to receive subsidized and/or unsubsidized loans is determined by the information reported on your FAFSA.

Federal Direct Subsidized Loan

A low interest loan that is available to students who demonstrate financial need. The government pays the interest on your behalf while you are enrolled in school at least half time. Principal payments begin six months after you graduate or drop below half-time enrollment. Information on current interest rates and repayment options can be found at studentaid.ed.gov.

Federal Direct Unsubsidized Loan

A low interest loan that is available to students who do not demonstrate financial need. Interest begins accruing from the time the loan is disbursed, although repayment is deferred the while you are enrolled in school at least half-time. If the interest is deferred it will then accrue and become part of the principal that is owed on the loan. Principal payments begin six months after you graduate or drop below half-time enrollment. Information on current interest rates and repayment options can be found at studentaid.ed.gov

Loan Limits

Direct subsidized loan limits for dependent students are $3,500 per year for freshman, $4,500 for sophomores and $5,500 for all other undergraduates. There is an additional $2,000 in unsubsidized loan eligibility. Independent students are eligible for higher loan limits dependent upon grade level.  Additional information can be found at studentaid.ed.gov.

How to Request a Federal Direct Stafford Loan 

You apply for a Federal Direct Stafford Loan by completing a Free Application for Federal Student Aid (FAFSA). After your FAFSA has been processed, we will notify you through a financial aid award notification of the type(s) of aid you are eligible to receive. You accept your student loans on the online Student Loan Acknowledgement Form

Entrance Counseling and a Master Promissory Note

First time Federal Direct Stafford Loan borrowers must complete an electronic Master Promissory Note and Entrance Counseling at the Direct Loans website, studentloans.gov, before their loan can be disbursed. The Master Promissory Note is your agreement to repay the loan. Entrance counseling provides borrowers with information on loan repayment and student rights and responsibilities associated with the loan. 

Loan Disbursement 

Direct Loans charges a loan fee (an origination fee) that is a percentage of the principal amount of the loan. The fee is deducted from the loan before you receive the loan funds. Visit studentaid.ed.gov for current fees.  
 
Your federal student loan funds will be disbursed directly into your Dominican University student account to pay tuition and other university expenses. Loans are disbursed in equal amounts for each term that your loan was approved for. If you are enrolled less than half-time in any term, you cannot receive Federal Direct Stafford Loan funds for that term.

Time Limitations on Direct Stafford Subsidized Loans

As of July 1, 2013 a new legislative law went into effect for any first time Direct Stafford Subsidized Loan Borrowers. This law allows you to receive Direct Stafford Subsidized Loans only within 150% of the length of your program of study. Once you have reached the end of this limit you are no longer able to receive Direct Stafford Subsidized Loans. For example; if you are enrolled in a four-year degree program, the maximum period
for which you can receive Direct Stafford Subsidized Loans is six years (4 x 150% = 6 years). Once you reach the length of your program, you may continue to receive Direct Stafford Unsubsidized Loans; however interest will start accruing on the outstanding Direct Stafford Subsidized Loans. For more information, please visit studentaid.ed.gov.

Exit Counseling

Students who have borrowed a Stafford student loan and cease to be enrolled at least half-time must complete exit counseling. Exit counseling covers many topics including repayment options and debt-management strategies.  Students complete exit counseling at studentloans.gov