Federal Direct Loan Program
- About Direct Loans
- What's the interest rate?
- How much can I borrow?
- How do I know if I meet the requirements for a Direct Loan?
- What is the process after I complete and submit my Direct Loan application?
- How long will it take to get my check?
- What do I do if I need to increase, decrease or cancel my Direct Loan?
- When do I pay back Direct Loans?
About Direct Loans
Federal Direct loan programs consist of low-interest loans and are available to both our undergraduate and graduate students. The loan interest rate is variable (capped at 8.25) and adjusted annually.
An origination fee of 3 percent is deducted automatically from amounts borrowed. In addition, borrowers will be given an up-front rebate that is approximately equal to 1.5% of the loan amount approved. To keep the interest rebate, you must make your first twelve required monthly payments on time. If you do not make all twelve payments on time, the federal government will add the rebate amount back to your loan account.
Federal Direct Subsidized Loans
Eligibility for a subsidized loan is based on financial need as determined by the analysis of a completed SAR (Student Aid Report). Interest is paid by the Government until six months after you graduate, leave school, or drop below half-time.
Federal Direct Unsubsidized Loans
The interest accrues while the student is enrolled in school at least half-time or interest payments can be made on a monthly basis.
You are advised to participate in the Entrance Interview for the William D. Ford Direct Loan. Please click here to go to the federal site.
You may download the Direct Loan Application (Subsidized and Unsubsidized) by clicking this link The William D. Ford Direct Loan Request Form or pick one up from the Financial Aid Office.
We encourage students to submit only one application that estimates the total loan needs for the academic year. Direct loan applications are submitted to the Financial Aid Office and processed based on the student's federal eligibility.
Federal PLUS Loan Program
Federal Direct Parent Loan for Undergraduate Students (Undergraduate PLUS Loan)
Parents of dependent undergraduate students may borrow up to the cost of attendance minus any other financial aid resources under the PLUS Program.
Application Form
Applicants for these loans are required to complete the Free Application for Federal Aid (FAFSA).
You can download a Plus loan application by clicking this link: Undergraduate PLUS Loan Application. Please bring completed loan application to Brooklyn College Financial aid office, for certification.
Amount
Loans may not exceed the cost of attendance less financial aid. Parents who have no adverse credit history as determined by the Federal Direct Loan Servicer may be eligible. The loan interest rate is variable and is adjusted each year on July 1 with a cap of 9%. There is no aggregate loan limit. Borrowers are charged an origination fee and insurance fee, which are deducted from the loan proceeds before disbursement.
Federal Direct PLUS Loan for Graduate Students (Graduate PLUS Loan)
Recent legislation now allows graduate students to borrow through the Federal Direct PLUS program. Formerly, this program was only available to the parents of undergraduate, dependent students. The Grad PLUS program is a non-need-based federal loan that allows graduate students to borrow up to the full cost of attendance, minus any other financial aid they are receiving. This program may be of interest to students who have little or no eligibility for need-based financial aid programs and need additional assistance to pay college costs after other forms of aid have been awarded.
Application Form
Applicants for these loans are required to complete the Free Application for Federal Aid (FAFSA).
You can download a Plus loan application by clicking this link: Graduate PLUS Loan Application. Please bring completed loan application to Brooklyn College Financial aid office, for certification.
Amount
There are no set annual or aggregate limits. You may borrow up to your full cost of attendance, minus any other financial aid you receive (including direct subsidized loans, Direct Unsubsidized loans, scholarships and certain fellowships.
You can click here for additional information.
Federal Direct Loan Consolidation
The U.S. Department of Education offers a Federal Direct Loan Consolidation Program. The Direct Consolidation Program allows Federal Direct Loan, as well as Federal Family Education Loan (Stafford, PLUS) borrowers, to combine one or more federal loans into one new loan.
- Federal loan programs may be consolidated under the Federal Direct Consolidation Program
- Interest is calculated on the weighted average of the interest rates on the loans being consolidated, rounded to the nearest higher 1/8 of 1% (not to exceed 8.25%). This rate is not variable and applies for the life of the loan.
- Extends repayment period up to 30 years
- No prepayment penalty
For further information or to apply, contact the U.S. Department of Education Federal Direct Loan Consolidation Program at 1-800-557-7392 or at http://www.ed.gov/DirectLoan/.
What’s the Interest Rate?
Stafford Loans have a fixed interest rate of 6.8% for loans with a first disbursement after July 1, 2006. (Previously, Stafford Loans had variable interest rates (based on 91-day T-bill rate + 1.7% during school with an additional 0.6% increase upon graduation) capped at 8.25% or less, depending on yearly adjustments.
The College Cost Reduction and Access Act of 2007 reduced the interest rates on subsidized Stafford loans for undergraduate students starting July 1, 2008. These reductions are available only to undergraduate students, not graduate students, and only for subsidized Stafford loans, not unsubsidized Stafford loans. The interest rates are illustrated in the following table.
Phased-in Cuts in Interest Rates on Subsidized Stafford Loans for Undergraduate Students
|
Year |
Interest Rate |
Interest Rate |
|
2007-08 |
6.8% |
6.8% |
|
2008-09 |
6.0% |
6.8% |
|
2009-10 |
5.6% |
6.8% |
|
2010-11 |
4.5% |
6.8% |
|
2011-12 | 3.4% | 6.8% |
|
2012-13 | 6.8% |
6.8% |
Interest rates for Direct PLUS Loans first disbursed on or after July 1, 2006 have a fixed interest rate of 7.9%.
How much can I borrow?
DIRECT STAFFORD LOANS BORROWING CHART (SUBSIDIZED & UNSUBSIDIZED) Starting July 1, 2008
Additional unsubsidized Stafford loan limits applicable to undergraduate students are increased for loans first disbursed on or after July 1, 2008. Subsidized limits (up to base amount) are unchanged. For students enrolled as regular students in eligible programs, annual Stafford loan limits are as follows:
Dependent Students (Except Students
Whose Parents Cannot Borrow PLUS)Base Amount
Additional Unsubsidized Loan Amount
Prior to July 1, 2008
Effective July 1, 2008
Freshman
$3,500
0
$2,000
Sophomore
$4,500
0
$2,000
Junior or Senior
$5,500
0
$2,000
| Independent Undergraduate Students And Dependent Students Whose Parents Cannot Borrow a PLUS Loan |
Base Amount | Additional Unsubsidized Loan Amount | |
| Prior to July 1, 2008 | Effective July 1, 2008 | ||
| Freshman | $3,500 | $4,000 | $6,000 |
| Sophomore | $4,500 | $4,000 | $6,000 |
| Junior or Senior | $5,500 | $5,000 | $7,000 |
| Graduate and Professional Studies | Base Amount | Additional Unsubsidized Loan Amount |
| $8,500 | Unchanged at $12,000 |
Aggregate Loan Limits (Effective July 1, 2008)
Undergraduate Dependent Students: $31,000 (no more than $23,000 of which can be subsidized).Undergraduate Independent Students: $57,500 (no more than $23,000 of which can be subsidized). Graduate and Professional Students: currently $138,500 (no more than $65,500 of which can be subsidized).
How do I know if I meet the requirements for a Direct Loan?
In order to qualify for a Direct Loan(s) a student must first have filed a FAFSA application and their SAR must be complete for the academic year 2008-09.
In addition, the student:
- Must be matriculated.
- Must be registered for at least 6 credits for the semester(s) of the loan(s).
- Cannot be in default of any loans.
- Cannot be over the aggregate limit (exceed annual award limit).
- Must meet program pursuit and academic progress guidelines.
What is the process after I complete and submit my Direct Loan application?
If the student meets all requirements the Direct Loan department will process the application and place a temporary loan deferment against your tuition. (This temporary loan deferment can and will be deleted if your SAR and/or loan application remains incomplete.) Once the loan is processed, the student will receive a disclosure statement from the Federal Government explaining the type of loan, loan amount, and anticipated disbursement dates of the loan. Please note that anticipated disbursement dates are not actual disbursement dates. You may be required to sign a Master Promissory Note (MPN). To sign an MPN you will need to have a PIN number. If you do not have a PIN you must go to the following website http://www.pin.ed.gov/ and apply for a PIN. Once you are assigned a PIN you must go to the following website http://dlenote.ed.gov/ to sign a Master Promissory Note.
In order to successfully sign your MPN you will need to have the following browser(s) for Windows: MS Internet Explorer 5.x or Netscape Navigator 4.x (Netscape Navigator 6.0 is not supported at this time) with Acrobat Reader settings for Netscape Navigator or MS Internet Explorer. Please note that all students who previously borrowed Direct Loans from Brooklyn College may not be required to sign a MPN because their previous MPN is good for up to 10 years. If you are uncertain whether you must sign a promissory note consult the Financial Aid Office, Direct Loan Department.
All first time direct loan borrowers will need to sign a Master promissory Note and should follow the instructions above.
If unable to sign a Master Promissory Note online what can I do?
The steps are as follows:
- You will need to contact Direct Loan Servicing at 800.848.0979.
- Once you receive the note you will be required to indicate two references, which reside at different addresses within the United States.
- The student must include a copy of one of the following documents (driver's license, social security card, and green card) which counts as proof of signature.
- The student must sign and date the note, using black or blue ink.
- Finally, the student must mail the Master Promissory Note and proof of signature to the address indicated.
How long will it take to get my check?
Once your Direct Loan application process is completed, the Direct Loan department will notify the student of the availability date of their loan check(s). Please note that this notification is sent only if there is an excess of funds after your tuition has been paid. Disbursement of any loan check(s) usually takes 3 to 4 weeks after the Federal government has received and accepted your Master Promissory Note. Please note that present and future disbursements of direct loan check(s) will no longer be available at the ESC Center (Check Distribution). It is strongly advised that you enroll in Direct Deposit if you elect not to have your check mailed.
What do I do if I need to increase, decrease, or cancel my Direct Loan?
If a student would like to increase, decrease or cancel their Direct Loan they must complete and submit a Direct Loan increase/decrease/cancellation form or contact the Financial Aid Office, Direct Loan Department for further instructions.
If you have further questions please contact the Direct Loan department at the Financial Aid office, 1306 James Hall, Telephone: 718.951.5064, Fax: 718.951.4778. For further information please go to our website at http://www.brooklyn.cuny.edu/.
When do I pay back Direct Loans?
After you graduate, leave school, or drop below half-time enrollment, you have six months before you begin repayment. This period of time is called a grace period.
During the grace period on a subsidized loan, you don't have to pay any principal, and you won't be charged interest. During the grace period on an unsubsidized loan, you don't have to pay any principal, but you will be charged interest. You can either pay the interest or it will be capitalized to the original loan amount.
After you leave school or drop below half-time enrollment, your lender will send you information about repayment and you'll be notified of the date repayment begins. However, you are responsible for beginning repayment on time, even if you don't receive this information. Failing to make payments on your loan is likely to have a negative effect on your credit rating.
Click here for information on:
PLUS Loans for graduate or professional students
Additional Information for PLUS Loans for graduate or professional students
