The William D. Ford Direct Loan Program
The William D. Ford Direct Loan Program
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 percent) and adjusted annually.
Federal Direct Subsidized Loans
Subsidized loan eligibility is based upon demonstrated
financial need (filing the FAFSA) and the interest is subsidized (paid) by the
federal government until you are enrolled less than half time. Effective July 1, 2012, subsidized graduate
loans will not be offered for the 2012–13 academic period.
Federal Direct Unsubsidized Loans
Interest accrues while the student is enrolled in school at
least half-time, or interest payments can be made on a monthly basis.
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 Office of Financial Aid and processed based on the
student's federal eligibility.
Fees
As of March 1, 2013,
an origination fee of 1.051 percent is deducted automatically from amounts
borrowed.
Federal Direct Parent PLUS Loan for Undergraduate
Students
Parents of dependent
students are eligible to apply for loans under the Federal Direct Loan
program. The parent must be a
biological parent, step-parent or adoptive parent whose information is on the
FAFSA. These loans are based on credit
not need. Parents may borrow up to the
students cost of education minus any other financial aid and scholarships.
Repayment on Parent
PLUS loans begins within 60 days after the final disbursement of the loan. However you may request a deferment through
your servicer, if you or your child is enrolled at least half-time.
Master Promissory Note (MPN)
The borrowing parent
must sign a master promissory note on-line at studentloans.gov. Be sure to
complete the “Parent Plus” MPN. If the
parent has previously completed an MPN, in most cases a new promissory note is
not required. If the parent applies
with an endorser to get approval, a new PLUS
MPN will be required.
Federal Parent PLUS Interest Rate
The Parent PLUS loan
interest rate is a fixed 7.9%.
Federal Parent PLUS Fees
Beginning March 1,
2013, the Federal Parent PLUS Loan origination fee is 4.204%.
What happens if the PLUS application is not approved?
There are several
options you may wish to consider:
- The parent borrower may re-apply with an
approved endorser (co-signer).
-or-
- The student is eligible to receive an
additional unsubsidized Stafford loan. The maximum loan amounts are based
upon the student’s year in college.
- Freshmen and sophomores can borrow a
maximum of $ 4,000
- Juniors and seniors can borrow a
maximum of $5,000
Federal Direct Loan Consolidation
The U.S. Department of Education offers a Federal Direct
Loan Consolidation Program. The 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
percent (not to exceed 8.25 percent). This rate is not variable and
applies for the life of the loan.
- The
program extends repayment period up to 30 years.
- There
is no prepayment penalty.
For further information or to apply, contact the U.S.
Department of Education Federal
Direct Loan Consolidation Program.
What Is the Interest Rate?
As of July 1 2013 the interest rate will be 6.8
percent. Unsubsidized Stafford Loans
have a fixed interest rate of 6.8 percent and Parent PLUS Loans have a fixed
interest rate of 7.9 percent.
How Much Can I Borrow?
Annual Loan Limits for Direct Subsidized Loans and Direct
Unsubsidized Loans
|
|
Dependent Undergraduate Students |
Independent Undergraduate Students |
|
First Year (freshman) |
$5,500 (maximum $3,500 subsidized) |
$9,500 (maximum $3,500
subsidized) |
|
Second Year (sophomore) |
$6,500 (maximum $4,500
subsidized) |
$10,500 (maximum $4,500
subsidized) |
|
Third Year (junior) and beyond |
$7,500 (maximum $5,500
subsidized) |
$12,500 (maximum $5,500
subsidized) |
Aggregate Loan Limits: Maximum Total Outstanding Loan
Debt
|
|
Dependent Undergraduate Students |
Independent Undergraduate Students |
|
Undergraduate |
$31,000 (maximum $23,000
subsidized) |
$57,500 (maximum $23,000
subsidized) |
Federal regulations require that when a student is
enrolled in a program that is one academic year or more in length, but is in a
remaining period of study that is shorter than a full academic year, the loan
must be prorated. Students who graduate
in the summer session or fall term will have their loans prorated.
Loan Proration Formula
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
current academic year.
In addition, the student:
- must
be matriculated,
- must
be registered for at least six 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), and
- must
meet program pursuit and academic progress guidelines.
You must participate in the Entrance
Interview for the William D. Ford Direct Loan.
You must download the Direct
Loan Application (Subsidized and Unsubsidized).
What Is the Process After I Complete and Submit My Direct
Loan Application?
If you meet 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, you
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 apply
for a PIN online. Once you are assigned a PIN, you must sign a
Master Promissory Note.
Please note that all students who previously borrowed Direct
Loans from Brooklyn College may not be required to sign an 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 Office of Financial Aid, Direct Loan
Department.
All first-time direct loan borrowers will need to sign a
Master Promissory Note and should follow the instructions above.
What Can I Do if I Am Unable to Sign a Master Promissory
Note Online?
Please follow these steps:
- Contact
Direct Loan Servicing, 800.557.7394.
- Once
you receive the MPN, you will be required to indicate two references
who reside at different addresses within the United States.
- Make
a copy of one of the following documents: driver's license, Social
Security card or green card. Any one of these counts as proof of
signature.
- Sign
and date the MPN, using black or blue ink.
- Mail
the MPN and proof of signature as directed.
How Long Will It Take to Get My Check?
Once your Direct Loan application process is completed, the
Direct Loan servicer will notify you of the anticipated availability date of
your loan check(s). Disbursement of any loan check(s) usually takes
three to four weeks after the federal government has received and
accepted your Master Promissory. It is strongly advised that you enroll
in Direct
Deposit or the CUNY Prepaid
Scholar Card if you elect not to have your check mailed.
Any first year-first
time borrowers will receive their first loan disbursement thirty (30) days
after the first day of classes.
What Can I Do if I Need to Increase, Decrease or Cancel
My Direct Loan?
You must complete and submit a Direct Loan increase/decrease/cancellation
form. Contact the Office of Financial Aid, Direct Loan Department for
further instructions.
If you have further specific questions, contact the Enrollment
Service Center.
What Should I Do if I Have Already Applied for a Direct
Loan and Plan to Drop or Withdraw Below Six Credits or Completely?
It is highly
recommended that you contact the Office of Financial Aid if you plan on
dropping or withdrawing from your classes. A financial aid adviser will provide
you with information regarding your loan eligibility and tuition liability.
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 and unsubsidized loan, you do not 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 will be notified
of the date repayment begins. However, you are responsible for beginning
repayment on time, even if you do not receive this information. Failing to make
payments on your loan is likely to have a negative effect on your credit
rating.
What Should I Do if I Have Forgotten the Type of Federal
Student Loan(s) I Have Borrowed?
You can review your federal student loan history through the
U.S. Department of Education's National Student Loan Data System (NSLDS), which requires
you to obtain
a PIN.
If you have further questions, contact the Enrollment Services Center.
