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Federal Direct Subsidized Loan

A Federal Direct Subsidized Stafford Loan is awarded as a need-based loan after grants, scholarships and other resources are subtracted or up to the annual maximum loan limit, whichever is lower. Subsidized loans are available to undergraduate students with financial need. SIUe’s financial aid office determines the amount you can borrow based on your financial need and cost of attendance. The U.S. Department of Education pays the interest on a Direct Subsidized loan while you’re in school at least half time, for the first 6 months after you leave school (referred to as a grace period), and during a period of deferment (a postponement of loan payments). You can find more information on the Department of Education website here. It is important that you only borrow what you need. If you decide to borrow a student loan, make sure you know who is providing the loan and the terms and conditions of the loan.

How to Apply

To apply for the Federal Direct Subsidized loan, the student must complete the FAFSA. To receive the Direct Subsidized loan, you must be enrolled at least half-time (6 credit hours) and be maintaining Satisfactory Academic Progress (the full policy can be found here). Generally, you must also be enrolled in a program that leads to a degree or a certificate awarded by the school. If the student is eligible for Direct Subsidized loans, the award amount will be posted on the student’s award letter on CougarNet.

Note: All first-time borrowers must complete Entrance Counseling and a Master Promissory Note (MPN) at studentloans.gov. Master Promissory Notes are valid for 10 years. If you are a transfer student and previously received loans, please contact our office.

Loan Fees

There is a loan fee on all Federal Direct Subsidized and Unsubsidized loans. The loan fee is a percentage of the loan amount and is deducted from each loan disbursement.

Current Interest Rates

For current Federal Direct Loans interest rates, click here. To learn more about how interest is calculated, click here.

How Will I Receive My Loan?

The school will first apply your loan funds to your school account to pay for tuition, fees, room and board, and other school charges. If any additional loan funds remain, they will be returned to you. All loan funds must be used for your educational expenses. All refunds are disbursed by the Office of the Bursar.

When Will Loan Repayment begin?

Federal student loan repayment begins after your 6 month grace period expires. See our Loan Repayment page for more information.

How Long Can I Receive a Subsidized Loan?

If you are a first-time borrower on or after July 1, 2013, there is a limit on the maximum period of time (measured in academic years) that you can receive Direct Subsidized Loans. This time limit does not apply to Direct Unsubsidized Loans or Direct PLUS Loans. If this limit applies to you, you may not receive Direct Subsidized Loans for more than 150 percent of the published length of your program. This is called your “maximum eligibility period.” Your maximum eligibility period is generally based on the published length of your current program. You can usually find the published length of any program of study in your school’s catalog.

For Example:

If you are enrolled in a 5 year bachelor’s degree program, the maximum period for which you can receive Direct Subsidized Stafford Loans is 7.5 years.
If you are enrolled in a 4 year bachelor’s degree program, the maximum period for which you can receive Direct Subsidized Stafford Loans is 6 years.
If you are enrolled in a 2 year associate degree program, the maximum period for which you can receive Direct Subsidized Stafford Loans is 3 years.
If you are enrolled in a 1-year certificate program, the maximum period for which you can receive Direct Subsidized Stafford Loans is 1.5 years

For a more detailed explanation of the 150% subsidized usage limit, please see the information provided by the Department of Education: 150% Fact Sheet.

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