Federal Loan Options


Direct Loans are low-interest loans for students and parents to help pay for the cost of a student’s education after high school.  The lender is the U S Department of Education (the Department) rather than a bank or other lending institution.  You must be an admitted student and enrolled as at least a half-time student to participate in the Federal Direct Loan Program.  There are three types of loans and one or all of the loans may be part of your award package.  The filing of the FAFSA is required for participation in the Direct Loan Program.

Types of Loans Offered

  • Subsidized:  Applies to students with demonstrated financial need, as determined by federal regulations.  No interest is charged while the student is enrolled in school as at least a half-time student and during deferment periods.  Payments begin 6 months (grace period) after your graduate, leave school, or drop below half-time enrollment. 
  • Unsubsidized:  Not based on financial need, interest is charged during periods including enrollment, grace period and deferment periods. Repayment begin 6 months after your graduate, leave school, or drop below half-time enrollment.  You can pay your interest as it accrues while you are in school.
  • PLUS:  An unsubsidized loan for Parents of dependent students.  PLUS loans help pay for the educational costs up to the cost of attendance minus all other financial assistance.  Interest is charged during all periods including enrollment, grace period and deferment periods.  PLUS loan borrowers cannot have an adverse credit history.  Payments begin on the loan 60 days after the last disbursement for the school year.

interest rates*

Loans first disbursed on or after July 1, 2017:

  • Subsidized  -     4.45%
  • Unsubsidized -   4.45%
  • PLUS Loan –      7.00%

origination fees*

 An origination fee is deducted by the lender from the amount borrowed prior to disbursement to the school.  First disbursement date on or after October 1, 2016.

  • Subsidized and Unsubsidzed --  1.069%
  • PLUS Loan -- 4.276%

*Interest rates and origination fees are determined by congress and are subject to change. https://studentaid.ed.gov/types/loans/interest-rates

LOAN limits

The maximum amount you can borrow each year depends on your grade level, whether you are a dependent student or an independent student, and the amount of other aid being offered.  The table below shows the maximum amount of money you may borrow each academic year.




1st year undergraduate

$5,500 (maximum $3,500 subsidized)

$9,500 (maximum $3,500 subsidized)

2nd year undergraduate

$6,500 ($4,500 subsidized)

$10,500 ($4,500 subsidized)

3rd & 4th year undergraduate

$7,500 ($5,500 subsidized)

$12,500 ($5,500 subsidized)

Graduate/professional N/A

$20,500 (unsubsidized only)

You may use the loan money you receive only to pay for your educational expenses.  Education expenses include school charges such as tuition, room and board, fees and indirect expenses such as books, supplies, and transportation.

With Direct Loans, you:

  • Borrow directly from the federal government and have a single contact (the Direct Loan Servicing Center at 888-877-7658) for everything related to the repayment of your loans.
  • You can track your borrowing on the National Student Loan Database System http://www.nslds.ed.gov/nslds_SA/
  • Have on-line access to your Direct Loan account information on the web at https://studentloans.gov/myDirectLoan
  • Choose from several repayment plans that are designed to meet the needs of almost any borrower.


The Federal Direct PLUS loan is for the parents of dependent undergraduate students and has a fixed interest rate of 7.00%.  The PLUS loan requires the filing of the Free Application for Federal Student Aid (FAFSA).  Repayment begins 60 days after the loan is fully disbursed.  Parents have to pass a credit check to qualify for this loan.  If the parents do not qualify they might still be able to receive a loan if they can demonstrate to the lender that extenuating circumstances exist of if they know someone who agrees to co-sign the loan.

The parent and student must be U S Citizens or eligible noncitizens, must not be in default on any federal education loans or owe an overpayment on a federal education grant, and must meet other general eligibility requirements for the Federal Student Aid programs.

A loan origination fee is deducted from the loan prior to disbursement (up to 4%).  Disbursements are sent directly to the C of I and the funds are posted to the student account.  If any loan funds remain after paying tuition, fees, room and board and other school charges, parents will receive the credit amount as a check unless they authorize the funds to be released to the student.  Any remaining loan funds must be used for educational expenses.

The PLUS loan amount borrowed cannot exceed the cost of education minus other financial aid received by the student.