This loan program is available to all students. Federal Direct Loans are low-interest loans from the U.S. Department of Education that are administered by Marshall University. It is the U.S. Department of Education’s major form of self-help financial aid and is available through the William D. Ford Federal Direct Stafford Loan Program. There are two types of Federal Direct Loans: subsidized and unsubsidized.

Because the funding for the Federal Direct Loan program comes straight from the US Department of Education, you do not have to find a lender to borrow through the program. Please disregard any offers you may receive about the Federal Stafford Loan program through private banks and other lenders. Since Marshall University is a Federal Direct Lending participating university, you may not use a private lender to apply for a Federal Stafford loan.

Federal Direct Subsidized Loan

A Federal Direct subsidized loan is available to help meet financial need after other resources are subtracted or to annual maximum loan limit, whichever is lower. The interest rate in effect for 2009-2010 for undergraduate students is fixed at 5.6%. The interest rate in effect for graduate students for the Federal Direct subsidized loan is a fixed at 6.8%. Interest begins to accrue 6 months after the student graduates or ceases to be enrolled in at least half time.

Federal Direct Unsubsidized Loan

A Federal Direct unsubsidized loan is not based on your financial need. If your estimated Cost of Attendance (COA) is greater than your financial aid and you have not reached your annual maximum loan limit through the Federal Direct subsidized loan, you may qualify for Federal Direct unsubsidized loan. The interest rate for Federal Direct unsubsidized loan is fixed at 6.8%. You are charged interest on this loan from the time the loan is disbursed until it is paid in full. You have the option to pay on the interest while in school, or to allow the interest to accumulate, which adds to the principal amount of the loan and increases the amount to be repaid.

Federal Direct Loan Interest and Fees

The interest rate in effect for 2009-2010 for Federal Direct subsidized loans for undergraduate students is fixed at 5.6%.

Refer to the chart below for applicable interest rates for the Federal Direct subsidized loan. These interest rates are only available to undergraduate students.

First disbursement of loan made on or after:	First disbursement of loan made before:	Interest rate on the unpaid balance:
July 1, 2008	July 1, 2009	6.0 percent
July 1, 2009	July 1, 2010	5.6 percent
July 1, 2010	July 1, 2011	4.5 percent
July 1, 2011	July 1, 2012	3.4 percent

 

The Federal Direct subsidized loan interest rate for graduate students is fixed at 6.8%. The interest rate for Federal Direct unsubsidized loans is fixed at 6.8% for both undergraduate and graduate students. Subsidized loans do not accrue interest until loan repayment begins, whereas unsubsidized loans accrue from when the loan is disbursed.

In addition to interest, for the 2009-10 academic year, all Federal Direct Loans have a 1.5% origination fee. However, you will receive an upfront 1.0% rebate at the time of origination based on paying your first 12 monthly payments on time, so the assessed fee is only ½ percent. This is deducted from the loan at the time of disbursement. For example, if you borrow $3,500 for the academic year, a total of $17.50 will be deducted from your loan amount and paid directly to the U.S. Department of Education. Thus, the annual net amount of the loan that would credit or disburse to your account is $3,482.50. However, when you go into loan repayment, if you do not make the first 12 payments on time, you will be charged the 1.0% fee.

For the 2008-2009 academic year, all Federal Direct Loans have a 2.0% origination fee. However, you will receive a 1.5% upfront rebate at the time of origination based on paying your first 12 monthly payments on time, so the assessed fee is only ½ percent. This is deducted from the loan at the time of disbursement. For example, if you borrow $3,500 for the academic year, $17.50 will be deducted from your loan amount and paid directly to the U.S. Department of Education. Thus, the annual net amount of loan that would disburse to your student account would be $3,482.50. However, when you go into loan repayment, if you do not make the first 12 payments on time, you will be charged the 1.5% fee.

How to Apply for a Federal Direct Loan

To apply for a Federal Direct Loan, you must complete the FAFSA. To be eligible, you must be enrolled at least half-time and meet other general financial aid eligibility requirements. If you qualify for a Federal Direct Loan, it will be included in your Financial Aid Package, which can be viewed in your myMU account by going to MILO.

 

E-sign the Federal Direct Loan Master Promissory Note (MPN)

Students borrowing a Federal Direct loan must complete a Federal Direct Loan Master Promissory Note (MPN) before loan money can be disbursed. Once a Federal Direct Loan MPN is completed and the loan is disbursed to your student account, you do not have to sign a Federal Direct Loan MPN again (it is valid for 10 years once your first loan installment disburses).

To complete the Federal Direct Loan MPN, visit www.dlenote.ed.gov. You will need your U.S. Department of Education PIN to sign your Federal Direct Loan MPN electronically.

After you sign your Federal Direct Loan MPN, electronic notification from the U.S. Department of Education will be sent to Marshall University.

Federal Direct Loan Entrance Counseling

The federal government requires a student to participate in loan counseling prior to receiving a Federal Direct loan. Federal Direct Loan Entrance Loan Counseling will explain various aspects of student loans, such as repayment and interest, and your rights and responsibility. It concludes with a 15-question quiz. You must get all answers correct to successfully complete Federal Direct Loan Entrance Loan Counseling.

Federal Direct Loan Entrance Loan Counseling can be completed by visiting www.dlssonline.com. You will need your U.S. Department of Education PIN to successfully complete Federal Direct Loan Entrance Loan Counseling. After you complete Federal Direct Loan Entrance Loan Counseling, the results will be sent electronically to Marshall University, although you may wish to print a copy of the rights and responsibilities page for personal records.

You only have to complete Federal Direct Loan Entrance Loan Counseling once, prior to your first Federal Direct loan disbursement.

 

Receiving Federal Direct Loan Funds

When Marshall University is notified by the Federal Direct Loan Processor that they have a valid Federal Direct Loan MPN on file for you and you have completed Federal Direct Loan Entrance Loan Counseling, your Federal Direct loan will automatically be credited to your student account as long as all other federal student eligibility requirements are met. Refer to Notification & Disbursement section for more detail on disbursement time lines.

 

Request Reduction or Cancellation of Federal Direct Loans

 

You have the right to reduce or cancel your Federal Direct Loan offer. You may do so by making a notation on your Financial Aid Award Letter (you have to log into your myMU account, enter MILO, and print your award letter to do this) or you may complete the Award Re-Evaluation form and submit it to the Office of Student Financial Assistance. You may obtain the Award Re-Evaluation form by going to www.marshall.edu/sfa, click on the “Forms & Applications” tab, and then on the “General Forms & Applications” tab.

 

Federal Direct Loan Limits

The federal government sets limits on the amount of money a student can borrow under the Federal Direct Loan program. Marshall University awards students that have filed the FAFSA the maximum amount eligible under such limits. The annual limit applies to the most a student can borrow in one academic year, while the aggregate limit applies to the maximum a student can borrow in a lifetime. Independent students and dependent students whose parents are unable to borrow a PLUS Loan are eligible for additional Federal Direct unsubsidized loan.

Below is a chart of annual loan limits for Undergraduate, Graduate/Professional, and Medical Students:

Dependent Students (excluding students whose parents cannot borrow PLUS)	Base Amount Subsidized/Unsubsidized	Additional Unsubsidized Loan Amount	Total
1st - year undergraduate (0 – 25 credits)	$3,500	$2,000	$5,500
2nd – year undergraduate (26 – 57 credits)	$4,500	$2,000	$6,500
3rd – year and beyond undergraduate (58 or more credits)	$5,500	$2,000	$7,500
Independent Students (and dependent students whose parents cannot borrow PLUS)	Base Amount Subsidized/Unsubsidized	Additional Unsubsidized Loan Amount	Total
1st - year undergraduate (0 – 25 credits)	$3,500	$6,000	$9,500
2nd – year undergraduate (26 – 57 credits)	$4,500	$6,000	$10,500
3rd – year and beyond undergraduate (58 or more credits)	$5,500	$7,000	$12,500
Graduate/Professional and Medical Students	Base Amount Subsidized/Unsubsidized	Additional Unsubsidized Loan Amount	Total
Graduate/Professional Students	$8,500	$12,000	$20,500
Medical Students	$8,500	$38,667	$47,167

 

Below is a chart of annual loan limits for Preparatory Coursework and Teach Certification:

Dependent Students (excluding students whose parents cannot borrow PLUS)	Base Amount Subsidized/Unsubsidized	Additional Unsubsidized Loan Amount	Total
Preparatory coursework (for enrollment in a graduate or professional program)	$5,500		$5,500
Teacher certification coursework	$5,500		$5,500
Independent Students (and dependent students whose parents cannot borrow PLUS)	Base Amount Subsidized/Unsubsidized	Additional Unsubsidized Loan Amount	Total
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

 

Below is a chart of Federal Direct Loan aggregate limits for all students:

	Subsidized	Combined Subsidized & Unsubsidized
Dependent Students (and dependent students whose parents cannot borrow PLUS)	$23,000	$31,000
Independent Students (and dependent students whose parents cannot borrow PLUS)	$23,000	$57,500
Graduate and Professional Students	$65,500	$138,500
Medical School Students	$65,500	$224,000

Federal Direct Loan Exit Counseling

The federal government requires that students who have taken out a Federal Direct Loan participate in Federal Direct Loan Exit Counseling prior to leaving or graduating from college. To complete Federal Direct Loan Exit Counseling, go to www.dl.ed.gov. You will need your U.S. Department of Education PIN to successfully complete Federal Direct Loan Exit Counseling.

Federal Direct Loan Repayment

Repayment of the Federal Direct Loan begins 6 months after the student graduates or ceases to be enrolled at least half time.

 

Additional Federal Direct Loan Information

Contact Federal Direct Loan Servicing Center at www.dl.ed.gov or call them at 1-800-848-0979, TTY 1-800-848-0983.