Federal Direct Loans are available to eligible students who complete the Free Application for Federal Student Aid (FAFSA). This federal student aid is made available through the William D. Ford Federal Direct Loan Program to help pay for educational expenses.
Federal Direct Unsubsidized Graduate Loans
The interest rate for Federal Direct Unsubsidized Loans disbursed on or after July 1, 2021 until June 30, 2022 is fixed at 5.28%. You are not required to pay the interest on this loan while in school, but we recommend that you do. You will be charged interest, starting at disbursement until the loan is paid in full. If the interest accumulates, it will be added to the principal amount of the loan and increase the amount to be repaid.
Loan Limits
- Annual Unsubsidized Limit for Graduate students is $20,500
- Aggregate Limit for Graduate students is $138,500 (up to $65,500 may be subsidized)
Steps to Apply
- You must complete the FAFSA each year.
To be eligible, you must be enrolled in a degree major for at least six credits per semester and maintain LBC’s satisfactory academic progress standards.
- E-sign Your Federal Direct (Subsidized or Unsubsidized) Loan Master Promissory Note (MPN).
If you are a first-time borrower of the Graduate Federal Direct loan, you will be required to complete a Master Promissory Note (MPN) before the loan funds can be disbursed. In most cases, you will only need to complete one MPN during your college career. E-sign your federal Direct loan MPN at gov by logging in with your FSA ID (username or email and your password).
- Complete Loan Entrance Counseling
If you are a first-time borrower of the Federal Direct Loan, you are required to complete Loan Entrance Counseling before the loan funds can be disburse. To take the counseling, select Entrance Loan Counseling on the gov website. This counseling session provides you with information that will help you understand your rights and responsibilities as a loan borrower, as well as other tools to assist you with managing your loans.
*Please note that this requirement is separate from e-signing the loan MPN.*
Fees
An origination fee of 1.057% will be deducted from the gross amount of the loan borrowed, so you need to take that into consideration when determining the amount you need to borrow.
Receiving Federal Direct Loan Funds
It’s important to know that loan funds will automatically credit to your student account if the Direct Loan Processor has a valid MPN on file for you, and you have completed loan entrance counseling. After you have completed your registration and semester classes begin, your student financial aid will begin to disburse into your student account.
Reduce or Decline a Loan
If you wish to reduce or cancel your loan(s), please go to the LBC Student Portal and choose Financial Aid Awards where you can reduce or cancel your loan.
Student Loan Repayment and Disputes
Students and parents who borrow Federal Direct Loans will repay their loans to a Federal Loan Servicer. Students are required to participate in Entrance Loan Counseling prior to their first disbursement of a federal student loan, and will be notified of the requirement to complete Exit Loan Counseling at the time of withdrawal or graduation. Exit Loan Counseling will inform students of their Federal Loan Servicer. This information is also available to students and parents at any point during their education on the studentaid/gov site. Detailed information about federal student loans, repayment and deferment can be found on the same website and students are also encouraged to contact their LBC Financial Aid Advisor with any questions.
If issues arise during student loan repayment that cannot be resolved with the Federal Loan Servicer, students or parents may contact the FSA Student Loan Ombudsman Group. The Federal Student Aid Ombudsman Group of the U.S. Department of Education is dedicated to helping resolve disputes related to Direct Loans, Federal Family Education Loan (FFEL) Program loans, Guaranteed Student Loans, and Perkins Loans. The Ombudsman Group is a neutral, informal, and confidential resource to help resolve disputes about your federal student loans.
FSA Student Loan Ombudsman Group Contact Information:
FSA website | Phone: 877.557.2575 | Fax: 606.396.4821
Mail: FSA Ombudsman Group
PO Box 1843, Monticello, KY 42633
Federal Direct Loans are available to eligible students who complete the Free Application for Federal Student Aid (FAFSA). This federal student aid is made available through the William D. Ford Federal Direct Loan Program to help pay for educational expenses.