Types of Federal Direct Student Loans
There are three types of Federal Direct Student Loans: subsidized, unsubsidized, and combinations of the two. As long as they are enrolled at least part-time in an approved educational institution, students are exempt from having to make payments on any kind of loan. Nonetheless, while enrolled, students have the option to make regular or interest-only payments.
The SUNY ESF Financial Aid Office determines each student’s demonstrated financial need before awarding Subsidized Direct Loans. When a student is enrolled at least half-time in an approved educational institution or during approved deferment periods, these loans are interest-free. When a loan is in a repayment or forbearance status, interest is assessed. Any interest that accrues during your grace period must be paid by you if your Direct Subsidized Loan was first disbursed between July 1, 2012, and July 1, 2014. Interest will be added to your principal balance if you decide not to pay the interest that accrues during your grace period.
Unsubsidized Direct Loans are given out regardless of the financial need that each student has shown. These loans begin to generate interest charges immediately after disbursement. There are grace, deferment, and at least half-time enrollment periods during which these charges may be postponed.
Federal Direct Student Loan Amounts
Each student’s share of the Federal Direct Loan funding will be different. The SUNY ESF Financial Aid Office determines the type and amount of each loan based on previously taken out loans, class level, other financial aid, and demonstrated financial need. Maximum loan eligibility is as follows:
Dependent undergraduate students are eligible to borrow up to $5,500 in the first year (with a maximum subsidy of $3,500); $6,500 in the second year (with a maximum subsidy of $4,500); and $7,500 in the third, fourth, and fifth years (with a maximum subsidy of $5,500). The total amount borrowed cannot exceed $31,000 aggregately (with a maximum subsidy of $23,000).
Independent undergraduate students and students whose parents are not eligible to borrow through the Federal Direct PLUS Program may borrow an additional amount in addition to the amounts listed above: $4,000 in the first and second years; $5,000 in the third, fourth, and fifth years; and so on, up to a total aggregate balance of $57,500 (of which no more than $23,000 may be subsidized) for all Stafford Loans. Only the unsubsidized loan form is available for these additional loan amounts.
Graduate students are eligible to borrow up to $20,500 annually, with a maximum aggregate balance of $138,500 (up to $65,500 in subsidies).
Undergraduate Loan Amounts – Dependent Students*
| Class Year | Base Loan Amount | Additional Unsubsidized Loan | Total |
|---|---|---|---|
| First Year | $3,500 | $2,000 | $5,500 |
| Second Year | $4,500 | $2,000 | $6,500 |
| Third Year | $5,500 | $2,000 | $7,500 |
| Fourth Year | $5,500 | $2,000 | $7,500 |
| Subsidized Loans | Total Loans | ||
| Aggregate Totals | $23,000 | $31,000 |
Undergraduate Loan Amounts – Independent Students* -OR- Students Whose Parents are Unable to Borrow Through the Direct PLUS Program**
| Class Year | Base Loan Amount | Additional Unsubsidized Loan | Total |
|---|---|---|---|
| First Year | $3,500 | $6,000 | $9,500 |
| Second Year | $4,500 | $6,000 | $10,500 |
| Third Year | $5,500 | $7,000 | $12,500 |
| Fourth Year | $5,500 | $7,000 | $12,500 |
| Subsidized Loans | Total Loans | ||
| Aggregate Totals | $23,000 | $57,500 |
| Class Year | Unsubsidized Loan | Total |
|---|---|---|
| All Years | $20,500*** | $20,500 |
| Total Loans | ||
| Aggregate Totals | $138,500 |
*These amounts indicate the federal maximums. Each student’s unique loan amount is determined by their level of need, anticipated expenses, available financial aid, and other variables. **Due to the rejection of a pre-approval or Direct PLUS loan application New loan amounts will be automatically offered as soon as the documentation for the denial arrives. *** Graduate students will no longer be eligible for subsidized student loans as of July 1, 2012.
Federal Direct Student Loan Terms and Conditions
The interest rate on both subsidized and unsubsidized Direct Student Loans disbursed on or after July 1, 2013, is fixed. Every July 1st, the rate applied to new loans will fluctuate in accordance with the chart below:
| Academic Year | Degree Level | For Loans Disbursed | Fixed Interest Rate |
|---|---|---|---|
| 2013-2014 | Undergraduate | 7/1/13 to 6/30/14 | 3.86% |
| 2013-2014 | Graduate | 7/1/13 to 6/30/14 | 5.41% |
| 2014-2015 | Undergraduate | 7/1/14 to 6/30/15 | 4.66% |
| 2014-2015 | Graduate | 7/1/14 to 6/30/15 | 6.21% |
| 2015-2016 | Undergraduate | 7/1/15 to 6/30/16 | 4.29% |
| 2015-2016 | Graduate | 7/1/15 to 6/30/16 | 5.84% |
| 2016-2017 | Undergraduate | 7/1/16 to 6/30/17 | 3.76% |
| 2016-2017 | Graduate | 7/1/16 to 6/30/17 | 5.31% |
| 2017-2018 | Undergraduate | 7/1/17 to 6/30/18 | 4.45% |
| 2017-2018 | Graduate | 7/1/17 to 6/30/18 | 6.00% |
| 2018-2019 | Undergraduate | 7/1/18 to 6/30/19 | 5.05% |
| 2018-2019 | Graduate | 7/1/18 to 6/30/19 | 6.60% |
| 2019-2020 | Undergraduate | 7/1/19 to 6/30/20 | 4.53% |
| 2019-2020 | Graduate | 7/1/19 to 6/30/20 | 6.08% |
| 2020-2021 | Undergraduate | 7/1/20 to 6/30/21 | 2.75% |
| 2020-2021 | Graduate | 7/1/20 to 6/30/21 | 4.30% |
| 2021-2022 | Undergraduate | 7/1/21 to 6/30/22 | 3.73% |
| 2021-2022 | Graduate | 7/1/21 to 6/30/22 | 5.28% |
| 2022-2023 | Undergraduate | 7/1/22 to 6/30/23 | 4.99% |
| 2022-2023 | Graduate | 7/1/22 to 6/30/23 | 6.54% |
Previous Years Interest Rates
The fixed interest rate on all loans disbursed between July 1, 2006 and June 30, 2013 is 6. 8%. However, as shown in the following chart, the College Cost Reduction and Access Act changed the fixed interest rate on all undergraduate subsidized Direct Loans:
| For Loans Disbursed | Fixed Interest Rate |
|---|---|
| 7/1/06 to 6/30/08 | 6.80% |
| 7/1/08 to 6/30/09 | 6.00% |
| 7/1/09 to 6/30/10 | 5.60% |
| 7/1/10 to 6/30/11 | 4.50% |
| 7/1/11 to 6/30/13 | 3.40% |
Prior to July 1, 2006, Federal Direct Student Loans had an annual variable interest rate that was capped at 8. 25%.
An origination fee is applied to all Federal Direct Student Loans, deducted from the loan amount when it is disbursed to the educational institution. The gross amount (amount before fees are deducted) is represented by the loan amounts mentioned above and on financial aid award notifications. Orgination fees will be charged according to the following chart:
| For Loans Disbursed | Origination Fee |
|---|---|
| 7/1/13 to 11/30/13 | 1.051% |
| 12/1/13 to 9/30/14 | 1.072% |
| 10/1/14 to 9/30/15 | 1.073% |
| 10/1/15 to 9/30/16 | 1.068% |
| 10/1/16 to 9/30/17 | 1.069% |
| 10/1/17 to 9/30/18 | 1.066% |
| 10/1/18 to 9/30/19 | 1.062% |
| 10/1/19 to 9/30/20 | 1.059% |
| 10/1/20 to 9/30/21 | 1.057% |
| 10/1/21 to 9/30/22 | 1.057% |
Regular loan payments typically start six months after the student graduates, leaves school, or enrolls less than half-time, or after the loan grace period. Initially, repayment will be spread out over ten years in fixed monthly installments. Other repayment options will be available for interested students.
How to Apply for a William D. Ford Direct Student Loan
The following actions must be taken by students in order to apply for a Federal Direct Student Loan:
- Complete theFree Application for Federal Student Aid (FAFSA)
- Using the Financial Aid Award Notification System online, accept the desired loan or loans.
Students accepting a Federal Direct Student Loan for the first time at SUNY ESF should also complete the following steps at https://studentaid.gov/:
FAQ
Why did I get a federal direct loan?
Undergraduate students who exhibit financial need are eligible to receive Direct Subsidized Loans. During the time you are enrolled in classes and the grace period that follows, you will not be required to pay or accrue interest. During that period, the Department of Education bears the cost of interest on your loan.
Do you have to pay back a direct loan?
Repayment of the loan must begin as soon as you graduate, stop attending, or enroll less than half-time. Repayment starts after your six-month grace period has ended.
What is the difference between federal and direct loans?
In a Nutshell Direct Loans are issued by the U. S. Department of Education, whereas universities and colleges make indirect loans Two popular forms of indirect loans are Perkins Loans and Federal Family Education Loans (FFEL). Private lenders provided these loans, which the federal government guaranteed.
What is direct loan forgiveness?
After you’ve made 120 qualifying payments on your Direct Loans, you may be eligible for forgiveness of the whole balance if you work full-time for the government or a nonprofit organization. e. , 10 years of payments. You must repay your federal student loans under an IDR plan in order to be eligible for PSLF benefits.
Read More :
https://www.tntech.edu/consumer-info/pdf/student-fed-loan.pdf