Federal Direct Student Loans
Federal direct student loans are low-interest government loans available to help students defray college costs. Student loans must be repaid. The interest rate is capped for direct student loan programs at 6.8%. The annual rate is determined by congress by July 1st of each year. The government charges you a fee to process the loan on your behalf. This fee is called an origination fee and is withheld from each payment sent to the college. Students must complete a Direct Loan Master Promissory Note and online entrance counseling to receive a federal student loan. Students must enroll in six credits to be eligible for a federal direct loan.
Repayment begins once the student is no longer enrolled in college for a minimum of six credit hours. Students who transfer from Tompkins Cortland to another college may have their loans deferred while they attend another Title IV eligible institution. There are two types of federal direct student loans; subsidized and unsubsidized.
Subsidized
Subsidized direct loans are based on financial need. Interest on a subsidized loan does not accrue until the student drops below half-time enrollment status or stops attending the college.
Unsubsidized
Unsubsidized direct loans are non-need based. Interest accrues on the loan while the student is enrolled in college.
The chart below summarizes the maximum student loan eligibility based on dependency status and number of earned credit hours.
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Annual Direct Loan Limits |
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|
Status |
Earned Credits |
Subsidized |
Unsubsidized |
|
Dependent |
0-29 |
$3,500 |
$2,000 |
|
Dependent |
30 or more |
$4,500 |
$2,000 |
|
Independent |
0-29 |
$3,500 |
$6,000 |
|
Independent |
30 or more |
$4,500 |
$6,000 |
|
Aggregate Loan Limits: Maximum Outstanding Loan Debt |
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|
Dependent undergraduate students |
$31,000 |
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|
Independent undergraduate students |
$57,500 |
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