The Federal Direct Loan (FDL) is a federal financial aid program under which loan funds are made available to students for educational expenses. FDL provides low-interest loans, available to undergraduate and graduate students who are matriculated in a degree program for at least six credits per semester and who are U.S. citizens or permanent residents.
The Federal Government provides a comprehensive explanation of all FDL provisions, terminology, and repayment on their Student Aid on the Web website. Click on the "Federal Student Aid Programs" button on the left hand side of the page for information on specific grants and loans. The following information summarizes the basic FDL terms and conditions.
General Direct Loan Provisions
The FDL Program makes two types of loans available to undergraduate students; a subsidized loan and an unsubsidized loan. Only unsubsidized loan is available to graduate students.
Subsidized Direct Loan eligibility is based on financial need as determined by the Federal Need Analysis Methodology. When a student qualifies for a subsidized loan, the federal government makes the interest payments on behalf of the student while the student is enrolled in school on at least a half-time basis and for six months afterwards (grace period). Students who do not qualify for any or a full subsidized loan are eligible for the unsubsidized Direct Loan. Under the unsubsidized FDL Program, the student is responsible for making the interest payments while enrolled in school. There are two options available regarding these interest payments. Students may make monthly interest payments while enrolled, or the student may agree to add the interest due to the principal of the loan (this is called capitalization) at repayment.
Direct loans have a 1% federal fee deducted at disbursement. The interest rate is a fixed rate, which is set by the federal government. The unsubsidized Direct Loan interest rate is currently 6.8% for both graduate and undergraduate students. The subsidized Direct Loan interest rate is 3.4% for undergraduates.
Undergraduate Dependent Students may borrow up to the following annual FDL limits. Annual FDL limits are: $5,500 (only $3,500 may be subsidized) for freshmen, $6,500 (only $4,500 may be subsidized) for sophomores, and $7,500 (only $5,500 may be subsidized) for juniors and seniors.
Independent undergraduate students or a dependent student whose parents are unable to obtain a Federal Direct PLUS Loan may borrow up to the following annual FDL limits: $9,500 for freshmen (only $3,500 may be subsidized), $10,500 for sophomores (only $4,500 may be subsidized), and $12,500 for juniors and seniors (only $5,500 may be subsidized).
Graduate Students may borrow up to $20,500 unsubsidized each academic year.
Students may not borrow more than the annual loan limit in any combination of subsidized or unsubsidized FDL. Also, a student's annual FDL may not exceed the approved federal cost of attendance minus any other types of financial aid.
Generally, repayment of loan principal begins six months after the student ceases to be enrolled on at least a half-time basis. The standard repayment period may extend up to ten years depending on the total amount borrowed. The minimum monthly payment is $50. Several other repayment plans are available as well.
To receive a FDL, students must annually file the Free Application for Federal Student Aid (FAFSA), complete Entrance Counseling, and complete a FDL Master Promissory Note (MPN). Although the FAFSA must be completed for each academic year, Entrance Counseling and the FDL MPN are one-time requirements to be completed prior to borrowing the first loan.
Entrance Counseling is a federal requirement for all FDL borrowers. This counseling will help students understand the terms and provisions of the FDL as well as their rights and responsibilities as a borrower. The FDL MPN is designed to serve as a multi-year note, over a maximum ten-year period, and can be used to process a student's FDL in subsequent years. Therefore, students will only need to complete Entrance Counseling and the FDL MPN once for enrollment at Alfred University.
Complete FDL Entrance Counseling and/or MPN
You will need your Federal Student Aid (FAFSA) PIN number to enter the website.
Please Note: Both the entrance counseling and the FDL MPN must be completed before your loan can be certified. Also, Alfred University will be notified electronically when you have completed entrance counseling.
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