Types of Aid – Loans


A caution about student loans – It takes time for a loan application to be processed by the school, lender, and/or the US Department of Education. Student loan funds are delivered to the student after enrollment and academic progress requirement have been verified. All federal loans require a minimum enrollment of six (6) Approved Active Units.

Loans are sources of financial assistance that allow you to spread the cost of education over time. Federal student loans are not automatically included in students’ award packages. Students are not required to borrow a federal student loan.

Loans are serious legal obligations. They must be repaid. You are obligated to repay principal plus interest. We urge all first-time borrowers to spend time learning about the loan process and their responsibilities so that they can make informed choices about their education. If you borrow federal student loans, you can track all of your loans through the studentaid.gov website.

Federal Direct Loans:

The Federal Direct Loans (subsidized and unsubsidized) are loans borrowed directly from the federal government who serves as the lender. The student’s annual borrowing limit may vary based upon the following:
• The amount of unmet need after other financial assistance has been considered;
• The applicant’s grade level in their academic program;
• The applicant’s current level of indebtedness;
• The applicant’s previous delinquent or defaulted loan


Fees may be charged by the US Department of Education (ED) and deducted from each loan disbursement. Interest rates are set by the US Department of Education (ED) and are fixed rates for the term of the loan.

Federal Direct Loans (Subsidized)

Student must complete the FAFSA and demonstrate financial need according to the federal formula in order to be eligible for subsidized direct loans. Under this program, the federal government will pay the interest on behalf of qualified borrowers for as long as the borrower is enrolled at least half-time in a degree-seeking program. Effective July 1, 2013, eligibility for subsidized Direct loans is limited to 150% of a student’s program. For example, if you are pursuing an associate degree (2-year program) your eligibility for a subsidized loan will be limited to three (3) years. Students must also maintain satisfactory academic progress towards completing their program requirements.

Fees may be charged by the US Department of Education and deducted from each loan disbursement. Interest may be charged during the 6-months grace period, after a student drops below half-time, completes their educational program, or withdraws from college.

Federal Direct Loans (unsubsidized)

Eligibility for the Unsubsidized Direct Loan is not based on a family’s demonstrated need. The US Department of Education is the lender under this program. The government does not pay the interest on behalf of borrowers under the Unsubsidized Direct Loan Program. The student borrower can choose either to make periodic payments of the interest or to have the interest added back into the principal of each loan.

Federal Plus Loan:

A creditworthy parent of a dependent undergraduate student can apply for a Federal Direct PLUS loan. Federal Direct PLUS loans are not based on demonstrated need and may be used to replace all or portions of the calculated family contribution for students who completed a FAFSA. Not all colleges participate in the PLUS loans program. Contact the Financial Aid Office to learn about loan programs that are offered at your home school and details about interest rates, fees, repayment terms, etc.