William D. Ford Federal Direct Loan Program
Federal Subsidized Direct Loan
The Federal Subsidized Direct Loan is available to students enrolled at least half-time (six credits) and who have demonstrated financial need through submission of the FAFSA.
The Financial Aid Office will automatically consider Subsidized Loan eligibility when the financial aid application process is complete. Federal Subsidized Direct Loan eligibility will be indicated on the Financial Aid Award Letter.
Maximum annual borrowing limits are established for this loan based upon the class year of the borrower. A freshman (from 0 to 29 credit hours) may borrow up to $3,500; a sophomore (from 30 to 59 credit hours) up to $4,500; a junior (from 60 to 89 credit hours) and a senior up to $5,500 annually. The maximum aggregate borrowing limit for the Subsidized Loan is $23,000 for undergraduate study.
Repayment of the Subsidized Direct Loan may be deferred while the borrower is enrolled for at least six credits per semester. During the In-School Deferment period, the federal government pays the interest on the Subsidized Direct Loan. Repayment of the loan begins six months after the borrower ceases at least half-time enrollment. Other deferment options are limited to remaining in school, graduate fellowship/rehabilitation training, unemployment and economic hardship.
Students who are borrowing Federal Subsidized Direct Loan funds for the first time must complete a Federal Direct Loan Entrance Interview before receiving loan proceeds. The Entrance Interview is designed to inform borrowers of the rights and responsibilities inherent in borrowing from this Program. The Office of Financial Aid will notify borrowers of the procedures for completing the Entrance Interview.
All new Federal Direct Loan borrowers must complete a Master Promissory Note (MPN). The Office of Financial Aid will notify borrowers of the procedures for completing the MPN. The MPN is valid for up to ten years of educational borrowing.
Loans covering more than one semester must be disbursed in multiple disbursements. If the loan is intended for the Fall and Spring semesters, the first half of the loan proceeds will be disbursed at the beginning of the Fall semester and the second half at the beginning of the Spring semester. If the loan is intended for one semester only, the loan will be disbursed at the beginning of the term.
If a loan is intended for one semester only, and that semester is the student’s last term before program completion, the College is required to prorate the maximum annual borrowing limit in proportion to the period of attendance. It will be based on the number of credits taken in that semester.
The College is required to reaffirm an applicant’s eligibility for the Federal Direct Subsidized Loan prior to disbursing the proceeds to a student account. If loan eligibility has changed for any reason since the certification of eligibility, the College may be required to return some or all of the loan proceeds. In such case, the borrower would be responsible for a student account balance that may result.
When borrowers cease to be enrolled for at least six credits, they are required to complete an Exit Interview. The Exit Interview is a final reminder of borrowers’ rights and responsibilities as they prepare to enter repayment. The Office of Financial Aid will inform borrowers of the procedures for completing the Exit Interview process.
Federal Unsubsidized Direct Loan
The Federal Unsubsidized Direct Loan is available to students who do not demonstrate financial need for the Subsidized Loan. Also, students who are independent by virtue of the regulations governing the FSA Programs are eligible to borrow funding through the Unsubsidized Loan in addition to their Subsidized eligibility. Additionally, an extra $2,000 can be borrowed each year for 4 years, up to a maximum of $8,000. Independent freshmen and sophomores are eligible for $4,000 per year in addition to their Subsidized eligibility, and independent juniors and seniors are eligible to borrow $5,000 per year in addition to their Subsidized eligibility.
In some cases, where a dependent student does not demonstrate financial need in an amount that would allow eligibility for the maximum annual loan limit for the Subsidized Loan, a Federal Direct Loan might be partially subsidized and partially unsubsidized.
The primary difference between the Unsubsidized Direct Loan and the Subsidized Direct Loan is that, for the Unsubsidized Loan, the interest on the loan is not subsidized by the government during the In-School Deferment period. Therefore, while a student is in school and deferring repayment of the Unsubsidized Loan, the interest on the loan must be either paid periodically or capitalized. If the capitalization of interest option is selected, the interest will be, in most cases, added to the principal balance of the Unsubsidized Loan at the time the borrower enters repayment. All other terms of the Unsubsidized Loan are the same as for the Subsidized Loan.
The maximum a dependent student can borrow combined with the Subsidized Direct Loan is $31,000. An independent student’s maximum, including the Subsidized Direct Loan, is $57,500.
Federal Direct Parent Loan for Undergraduate Students (PLUS)
Parents of dependent undergraduate students may borrow the PLUS loan for a maximum annual amount equal to the Cost of Attendance less all other financial aid the student is receiving. Repayment of the PLUS loan begins 60 days after the loan is fully disbursed (paid out).
The PLUS loan will be approved based upon the credit-worthiness of the borrower. Parents interested in borrowing the PLUS loan must notify the Financial Aid office after receipt of the student’s Award Letter.
To initiate the Federal Direct PLUS Loan process, the parent must complete the College of Saint Rose PLUS Loan Request Form and submit it to the Office of Financial Aid. Instructions on this form direct the borrower to www.studentloans.gov where he/she will complete a PLUS Loan credit check and a Master Promissory Note (MPN) if one is not already on file.
All new Federal Direct PLUS Loan borrowers must complete a Master Promissory Note (MPN). The Office of Financial Aid will notify borrowers of the procedures for completing the MPN. The MPN is valid for up to ten years of educational borrowing.
The PLUS loan must be disbursed in multiple disbursements. If the PLUS loan is intended for the fall and spring semesters, the first half of the PLUS loan proceeds will be disbursed at the beginning of the fall semester and the second half at the beginning of the spring semester. If the PLUS loan is intended for one semester only, the entire sum of the proceeds will be disbursed at the beginning of the semester.
The College is required to reaffirm an applicant’s eligibility for the PLUS loan prior to disbursing the proceeds to a student account. If PLUS loan eligibility has changed for any reason since the certification of eligibility, the College may be required to return some or all of the PLUS loan proceeds. In such case, the student would be responsible for any resultant account balance.
Please note that, in the case of a PLUS loan being denied, the student would be eligible for an additional Unsubsidized Direct Loan in an amount equal to the independent student’s maximum annual eligibility for the Federal Unsubsidized Direct Loan.