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The Federal Direct Lending Program

Students who apply for financial aid via the FAFSA are reviewed for all types of aid for which they may be eligible. One of the largest federal aid programs is the William D. Ford Federal Direct Lending Program. It is comprised of loans such as the Federal Direct Unsubsidized Stafford and Direct Graduate PLUS loans. The Federal Direct Lending program is funded by the U.S. federal government, supported by the U.S. Treasury.

Domestic students (U.S. citizens and U.S. permanent residents) who are enrolled at least half-time may be eligible to borrow up to $10,250 in Federal Direct Stafford loans per semester. Federal Direct Stafford Loans are fixed-interest education loans which do not require credit approval. The loan terms and repayment options are regulated by the federal government. 
 

2013-2014 William D. Ford Federal Direct Students Loans

 
Federal Direct Unsubsidized Stafford Loan
 

Federal Direct Graduate Plus Loan
 
Interest Rate
(Effective for loans disbursed between July 1, 2013 and June 30, 2014)

5.41% fixed*
6.41% fixed**
Origination Fee
 
1.072%
This fee was 1.051% for loans disbursed prior to December 1, 2013.
4.288%
This fee was 4.204% for loans disbursed prior to December 1, 2013.

Eligibility
 
Not need-based. Loan approval contingent upon a credit check.
In-School Interest In-school interest. Interest begins to accrue at disbursement. The student may defer the principal and the interest may be capitalized.
 
In-school interest. Interest begins to accrue at disbursement. The student may defer the principal and the interest may be capitalized.
 
Maximum Borrowing Amount Maximum of $10,250 per semester. Generous loan limits. Students can borrow up to the full cost of attendance, less the amount of other financial aid received.

*Based on 10-year Treasury bond yield plus 3.60%. Interest rate not to exceed 9.50%.
** Based on 10-year Treasury bond yield plus 4.60%. Interest rate not to exceed 10.50%.

Please Note: As of July 2012, Federal Direct Subsidized Stafford Loans are no longer offered to graduate students. The semester loan limit of $10,250 remains, but only includes Federal Direct Unsubsidized Stafford Loans.

Federal Update

Due to the recently signed Bipartisan Student Loan Certainty Act of 2013, the interest rates on the 2013-2014 federal loans have been reduced for graduate students. The Stafford interest rate decreased from 6.8% to 5.41% and the Graduate Plus interest rate decreased from 7.9% to 6.41%. The new rates are only applied to loans disbursed after July 1, 2013 and before June 30, 2014. The rates are fixed for the life of the loan.