Federal Direct Student Loans

What types of Direct Loans are offered?

There are two different loans offered to students who complete a FAFSA application. Below you will find information regarding the two different federal direct loans offered and additional quick facts pertaining to both. Please keep in mind that not all students will qualify for both loan types. The type of a student is offered will be based on financial need and the yearly amount the student can receive will be based on their grade level, enrollment, and aggregate loan limits. Please refer to sections titled: Dependent / Independent Student Yearly Loan Limits, and Aggregate Lifetime Loan Limits.

Subsidized Loan:

    • Awarded based on financial need
    • Interest-free while enrolled in at least 6 credits per semester
    • 4.45% fixed interest rate for loans disbursed between July 1, 2017 - June 30, 2018
    • Only available to Undergraduate Students with financial need
    • New borrowers on or after July 1, 2013, are subject to 150% rule: Subsidized Usage Limit Applies (SULA)

Unsubsidized Loan:

    • Non-need-based
    • Accrues interest while in school
    • Undergraduate Students:
        • 4.45% fixed interest rate for loans disbursed July 1, 2017 - June 30, 2018 
    • Graduate Students:
        • 6.00% fixed interest rate for loans disbursed July 1, 2017 - June 30, 2018
    • Note: interest rates are subject to change July 1 each year for new loans borrowed.

Additional Quick Facts:

    • Both loan types charge an Origination Fee
    • 1.069% for loans disbursed from October 1, 2016 - September 30, 2017. Origination fees are subject to change July 1 each year.
    • Repayment is deferred while the student is enrolled and taking at least 6 credits per semester
        • Note: If you received a Direct Subsidized Loan that was first disbursed between July 1, 2012, and July 1, 2014, you will be responsible for paying any interest that accrues during your grace period. If you choose not to pay the interest that accrues during your grace period, the interest will be added to your principal balance.
    • Students can choose to pay interest on the Unsubsidized Loan while in school
        • If you choose not to pay the interest while you are in school and during grace periods, your interest will accrue (accumulate) and be capitalized (that is, your interest will be added to the principal amount of your loan).
    • Repayment begins 6 months after graduation or from the date the student ceases to be enrolled in at least 6 credits

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How do I apply for a Federal Direct Loan?

1.  Complete the FAFSA for the current academic year.

2.  Comply with any requests from Office of Financial Aid for additional documentation. Any outstanding requirements you may have will be listed on your MAX account.

3.  Once all requirements are completed, a financial aid award package will be completed for you and available to view on your MAX account. All eligible students will be "offered" a Federal Direct Stafford Loan.  

      • The student will need to log into his/her MAX account to and accept (or decline) the loan. For instructions on navigating your MAX account, please click here.
      • Once the loan(s) have been accepted (or declined), if you wish to make any further changes you must complete a Loan Request Change Form or contact the Office of Financial Aid at 717-871-5100. Please note that only the student may make changes to his/her Federal Direct Loans.

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What if I have never borrowed a Federal Direct Loan before?

First- time borrowers must also complete Federal Direct Stafford Loan Entrance Counseling and a Master Promissory Note online through www.studentloans.gov. Entrance Counseling educates the student about Direct Loans and their terms, as well as the student’s rights and responsibilities of borrowing them. The Master Promissory Note is the student’s agreement that they understand these terms and agree to borrow and repay the loan(s) offered to them. These requirements must be completed by the student, NOT the parent(s).  

To log into your account, you will need your (the student's):

FSA User ID and Password:

NOTE: This is the same user ID and password used to complete the FAFSA application

      • To create an FSA User ID click here.
      • If you have forgotten your username or password, click here.

Entrance Counseling:

The Federal Government requires that all first-time Federal Direct Loan borrowers complete an entrance counseling session before they receive any loan proceeds. Entrance Counseling educates the student about Direct Loans and their terms, as well as the student’s rights and responsibilities of borrowing them. The Entrance Counseling must be completed by the student, NOT the parent(s). For more information on how to complete Entrance Counseling, please click here.

Master Promissory Note:

The Federal Direct Student Loan is a guaranteed student loan (in the student's name).  In order to obtain the Federal Direct Loan, all first-time borrowers must complete the Federal Direct Loan Master Promissory Note (MPN).  This note is valid for a period of 10 years and must be completed by the student. For more information on how to complete Entrance Counseling, please click here.

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It is Federal Regulation that these steps must be done so that the student understands the terms of his/her loan and repayment. Until s, you will not receive any Federal Loans awarded to you.these steps are completed, no Direct Loan funds will be credited towards the students' bill and will not disburse to the account.

Dependent Student Yearly Loan Limits

The amount a student can borrow in federal loans each academic year is based on their grade level at the time the loan is processed. A student's grade level is based on the total number of credits earned. Please note that the number of credits a student is enrolled, their housing plans and other financial aid received may cause the loan amounts listed below to be less.

The following chart is based on a dependent student. Students may be eligible for an additional unsubsidized loan if the parent is denied a Parent PLUS Loan.

Dependent Student Yearly Loan Amounts

    • Students may cancel all or a portion of the loan within 14 days after the date the school has sent notification that the loan funds have been credited to the student's account. Contact the Office of Financial Aid (717-871-5100) to cancel or reduce the loan, submit a Loan Change Form online or call the Office of Financial Aid at 717-871-5100.
    • The loan MUST BE REPAID to the U.S. Department of Education (USDE) through one of the Direct Loan Servicers. 
    • The student is the borrower and has up to 10 years to repay the loan depending on the size of the student's debt.
    • During the repayment period, under certain circumstances, the lender may grant deferments, forbearances, or cancellations. A list of deferments and cancellations is provided at the time the student signs their Promissory Note.
    • The school can refuse to certify a student's loan application OR certify the loan for an amount less than the student would otherwise be eligible. The school must document the reason for its action and explain the reason to the student in writing. The decision of the school is final and cannot be appealed to the U.S. Department of Education.
    • A student can receive a subsidized and unsubsidized loan for the same period.
    • Loan funds are disbursed in at least 2 installments.

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Independent Student Yearly Loan Limits

The amount a student can borrow in federal loans each academic year is based on their grade level at the time the loan is processed. A student's grade level is based on the total number of credits earned. Please note that the number of credits a student is enrolled, their housing plans and other financial aid received may cause the loan amounts listed below to be less.

In addition to the base amounts listed in the previous section for dependent students, independent students and sometimes dependent students whose parents have been denied a Parent PLUS Loan may qualify to borrow and an additional amount of the unsubsidized loan. The amounts listed below are the maximum yearly amounts. 

Independent Student Yearly Loan Limits

*Due to changes in federal regulation (Budget Control Act of 2011), beginning with the Fall 2012 semester, Graduate students (seeking a Master's Degree or higher) will no longer qualify for a Subsidized Loan - all Federal Direct Loans will be Unsubsidized.

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Aggregate Lifetime Loan Limits

The federal Aggregate Lifetime Loan Limit puts a cap on the total amount of subsidized and/or unsubsidized loans that you may borrow for undergraduate and graduate study. If the total loan amount you receive over the course of your education reaches the aggregate loan limit, you're not eligible to receive additional loans. However, if you repay some of your loans to bring your outstanding loan debt below the aggregate loan limit, you could then borrow again, up to the amount of your remaining eligibility under the aggregate loan limit.

Students can not exceed the Aggregate Lifetime Loan Limits for the program for which they are enrolled. As students get close to their aggregate loan amounts, the school is notified and required to complete a Loan Limit Review and will contact the student if additional information is needed.

Aggregate Lifetime Loan Limits

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150% Subsidized Usage Limit Applies (SULA)

SULA is an acronym that stands for 'Subsidized Usage Limit Applies'. This is in reference to the Department of Education's 150% rule for Subsidized loans that went into affect for new borrowers beginning July 1, 2013. There is a limit on the maximum period of time (measured in academic years) that you can receive Direct Subsidized Loans.

In general, you may not receive Direct Subsidized Loans for more than 150% of the published length of your program. This is called your "maximum eligibility period". You can usually find the published length of any program of study in your school's catalog.

For example:

      • If you are enrolled in a 4-year bachelor's degree program, the maximum period for which you can receive Direct Subsidized Loans is 6 years (150% of 4 years = 6 years).

      • If you are enrolled in a 2-year associate degree program, the maximum period for which you can receive Direct Subsidized Loans is 3 years (150% of 2 years = 3 years).

          • Note: Your maximum eligibility period is based on the published length of your current program. This means that your maximum eligibility period can change if you change programs. Also, if you receive Direct Subsidized Loans for one program and then change to another program, the Direct Subsidized Loans you received for the earlier program will generally count against your new maximum eligibility period.

For more information and examples on SULA and the 150% rule, please click on the following:

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More differences between Subsidized and Unsubsidized Loans


Federal Direct SUBSIDIZED Loan Federal Direct UNSUBSIDIZED Loan
  • Eligibility is based on financial need.
  • Eligibility is NOT based on financial need.
  • The Federal Government pays the interest on the loan as long as the student maintains a half-time enrollment status of 6 credits per semester (undergraduate and graduate students).
  • The Federal Government DOES NOT pay the interest on the loan. Interest is charged from the time the loan is disbursed until it is paid in full.
  • Repayment on both the interest and principal begins SIX months after the student ceases to be enrolled at least half-time, graduates, withdraws, does not return the following semester, stops attending classes, or drops below 6 credits.
  • If you received a Direct Subsidized Loan that was first disbursed between July 1, 2012, and July 1, 2014, you will be responsible for paying any interest that accrues during your grace period.
  • If you choose not to pay the interest that accrues during your grace period, the interest will be added to your principal balance.
  • The student has two options in the repayment of the interest. It can be paid while enrolled in school (check the box on the Master Promissory Note indicating you wish to pay the interest)
  • OR the loan interest can be capitalized - that is, the interest will be added to the principal amount of the loan and additional interest will be based upon the higher amount.
  • In both cases, repayment on both the interest and principal will begin SIX months after the student ceases to be enrolled at least half-time, graduates, withdraws, does not return the following semester, stops attending classes, or drops below 6 credits.



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Keeping track of your Federal Loans

Are you confused about how to keep track of your federal loans?  

Due to changes in federal regulations, your loans may have been sold and sent to different lenders/servicers.  As a borrower, you may have several different federal loans serviced by different companies. 

In order to keep track of your federal loans, you can use the National Student Loan Data System (NSLDS) to view detailed information about your loans and current servicers.  Please note, this is only for federal loans (Stafford, Perkins, Grad PLUS) and does not include any private/alternative loans.

www.NSLDS.ed.gov 

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Federal Direct Loan Disclaimer

In accordance with U.S. Department of Education regulations (HEOA 489 amended HEA Sec.485B), Millersville University and the Office of Financial Aid acknowledges to students and parents that when the student enters into an agreement regarding a Title IV (HEA) loan, i.e.: Direct Stafford Loan and Direct Parent PLUS Loan that the loan will be submitted to NSLDS (National Student Loan Data System) and accessible by authorized agencies, lenders, and institutions.

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