SCHOOL CODE:  001817

Federal Direct Loans

Details

  • Types of Federal Direct Loans:
    • Subsidized: A need-based loan, on which the government pays the interest while the student is enrolled
    • Unsubsidized: A non-need-based loan, on which the interest begins accruing immediately upon the loan’s first disbursement

      • Subsidized and unsubsidized loans are loans held under the student’s name and affect the student’s credit when not paid
    • Parent PLUS: For parents of dependent undergraduates enrolled at least halftime. (See below for details.)

  • Interest Rates for Loans Disbursed:
    • Before October 1, 2014:  fixed interest rate of 3.86% for all Direct Loans to undergraduate students
    • On or After October 1, 2014:  fixed interest rate of 5.41% for all Direct Loans to graduate students
    • On or After July 1, 2013: fixed interest rate of 3.86% for all Direct Loans to undergraduate students
    • On or After July 1, 2013: fixed interest rate of 5.41% for all Direct Loans to graduate students
    • Between July 1, 2012 and June 30, 2013; fixed interest rate of 3.4% for undergraduate Subsidized Direct Loans; 6.8% for all other Direct Loans
    • Between July 1, 2011 and June 30, 2012: fixed interest rate of 3.4% for undergraduate Subsidized Direct Loans; 6.8% for all other Direct Loans
    • Between July 1, 2010 and June 30, 2011: fixed interest rate of 4.5% for undergraduate Subsidized Direct Loans; 6.8% for all other Direct (Stafford) Loans
    • Between July 1, 2009 and Jun 30, 2010: fixed interest rate of 5.6% for undergraduate Subsidized Direct Loans; 6.8% for all other Direct (Stafford) Loans
    • Between July 1, 2008 and June 30, 2009: fixed interest rate of 6.0% for undergraduate Subsidized Direct Loans; 6.8% for all other Direct (Stafford) Loans
    • Between July 1, 2006 and June 30, 2008: fixed interest rate of 6.8% for all Subsidized and Unsubsidized Direct Loans
    • Before July 1, 2006: variable interest rate subject to change each July 1 (but not to exceed 8.25%) – currently 1.87% for In-School, Grace or Deferment and 2.47% for Repayment or Forbearance
  • Current interest rates are simple interest and do not vary

  • Repayment does not begin until six (6) months after the student graduates or drops below half-time enrollment (6 credit hours for undergraduates; 4 credit hours for graduates)

  • Before October 1, 2014, a 1.072% origination fee is deducted before disbursement

  • On or After October 1, 2014, a 1.073% origination fee is decudted before disbursement

Instructions for Direct Loan Borrowers:

    1. First time borrowers of Federal Direct Loans must sign a Master Promissory Note (MPN).
    2. After a student signs the Federal MPN for IU Southeast, the MPN remains valid for ten years.  If the student transfers to another university, a new MPN must be completed for that university.
    3. First time borrowers must complete Direct Loan Entrance Counseling.
    4. Please see Direct Loan Instructions.

Federal Direct Loan eligibility is limited by federal aggregates:

  

DIRECT LOAN LIMITS (Beginning July1, 2008)

Annual Loan Limits - Direct Loan

Dependent Students (whose parents were not denied a PLUS Loan) 

Combined Base Limit for Subsidized and Unsubsidized Loans

Additional Limit for Unsubsidized Loans

Total Limit for Subsidized and Unsubsidized Combined

First-Year Undergraduate (Freshman)

$3,500

$2,000

$5,500

Second-Year Undergraduate (Sophomore)

$4,500

$2,000

$6,500

Third-Year Undergraduate (Junior)

$5,500

$2,000

$7,500

Fourth-Year Undergraduate (Senior)

$5,500

$2,000

$7,500

Independent Students (and dependent students whose parents were denied a PLUS loan) 

Combined Base Limit for Subsidized and Unsubsidized Loans

Additional Limit for Unsubsidized Loans

Total Limit for Subsidized and Unsubsidized Combined

First-Year Undergraduate (Freshman)

$3,500

$6,000

$9,500

Second-Year Undergraduate (Sophomore)

$4,500

$6,000

$10,500

Third-Year Undergraduate (Junior)

$5,500

$7,000

$12,500

Fourth-Year Undergraduate (Senior)

$5,500

$7,000

$12,500

Preparatory Coursework (for enrollment in a graduate or professional program)

$5,500

$7,000

$12,500

Teacher Certification Coursework**

$5,500

$7,000

$12,500

Graduate and Professional Students

Combined Base Limit for Subsidized and Unsubsidized Loans

Additional Limit for Unsubsidized Loans

Total Limit for Subsidized and Unsubsidized Combined

Graduate and Professional Students

 

 

$20,500

Medical School Students

 

 

$20,500

*Loan Limits include summer sessions (if all loans accepted for Fall and Spring, may not have loan eligibility for Summer. Please contact the Financial Aid Office for more information).

Annual Loan Limits - Direct Loan

Combined Base Limit for Subsidized and Unsubsidized Loans

Additional Limit for Unsubsidized Loans

Total Limit for Subsidized and Unsubsidized Combined

Dependent Undergraduate Students (whose parents were not denied a PLUS loan)

$23,000

$8,000

$31,000

Independent Undergraduate Students (and depend students whose parents were denied a PLUS loan)

$23,000

$34,500

$57,500

Graduate and Professional Students

$65,000 (including undergraduate Direct loans)

$73,000

$138,500

Medical School Students (Effective 4/18/08)

$65,000 (including undergraduate Direct loans)

$158,500

$224,000

Your total outstanding federal loans can be viewed at www.nslds.ed.gov.


Federal Direct Loan Program
Checkout the official press release that details IU's decision to switch to the Federal Direct Loan Program:

If you take out a Federal Direct Loan, you or your family will not be borrowing money from a bank. Direct Loans are loans made with federal capital and owned by the federal government. Loan repayments are made to a loan servicer assigned by the government, and Direct Loans are never sold; although you may have a different loan servicer other than the federal government.

The Office of Financial Aid administers the loans, determines your loan eligibility, approves the loan, confirms the promissory note, and when necessary receives the funds from the federal government and credits the loan amount directly to your University student account. IU Southeast is NOT your lender.

Please note: Because IU Southeast participates in the Direct Loan program; we do NOT process Subsidized or Unsubsidized Stafford Loans, PLUS Loans, or Grad PLUS Loans through private lenders.