Federal Direct Subsidized-Unsubsidized Loans
A FAFSA must be filed before TU can determine eligibility for Direct Loans. To qualify for a Direct Subsidized Loan, a student must exhibit financial need as determined by their FAFSA. Students exhibiting no financial need, or no remaining need after other aid sources, may qualify to borrow a Direct Unsubsidized Loan. Aggregate loan amounts for dependent undergraduate students are $31,000 (not to exceed $23,000 in Direct Subsidized Loan funds). Aggregate loan amounts for independent undergraduate students are $57,500 (not to exceed $23,000 in Direct Subsidized Loan funds). Aggregate loan amounts for graduate/professional students are $138,500 (not to exceed $65,500 in Direct Subsidized Loan funds). As of 7/1/13, a new provision was added to the Direct Loan requirements that limit a first-time borrower’s eligibility for Direct Subsidized Loans to a period not to exceed 150 percent of the length of the borrower’s educational program. Only first-time borrowers on or after 7/1/13 are subject to the new provision.
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The current interest rate for Direct Subsidized/Unsubsidized Loans is determined each June for new loans being processed for the upcoming award year, which runs from July 1 to the following June 30. The fixed interest rate will be for the life of the loan. The government will deduct an origination (processing) fee from each Direct Subsidized/Unsubsidized Loan disbursement. Refer to studentloans.gov for the actual interest rate and origination fee for your Direct Subsidized/Unsubsidized Loan. The federal government pays the interest on a Direct Subsidized Loan while a student is in school at least half-time, during the first six months once a student graduates or drops below half-time enrollment (referred to as a grace period*), and during a deferment period. Direct Unsubsidized Loans begin accruing interest at the time the loan disburses. A student may defer the interest payment or may choose to pay the interest quarterly.
Prior to receiving the first loan disbursement, borrowers are required to electronically accept the award(s) on WebAdvisor, complete entrance counseling and e-sign the electronic Master Promissory Note (eMPN) at studentloans.gov. A Direct Subsidized/Unsubsidized eMPN is valid for ten years. Direct Subsidized/Unsubsidized Loans are made in two equal disbursements for a two-semester loan. At least one-half of the loan period must elapse before the second disbursement can be released. Direct Subsidized/Unsubsidized Loans credit to the student’s account no earlier than the first day of class each semester. A disbursement funds letter will be emailed to the student’s TU email address when funds credit. A student has the right to cancel all or any portion of the loan within 14 days of the loan crediting their account. Repayment begins six months after the student ceases to be enrolled at least half-time. Exit counseling is required upon leaving the university. Refer to studentloans.gov for repayment plans.
Any loans listed above that the student applies for will be submitted to the National Student Loan Data System (NSLDS), and will be accessible by guarantee agencies, lenders, and schools determined to be authorized users of the data system.
*Students borrowing a Direct Subsidized Loan between 7/1/12 and 7/1/14 should be aware that for this two year period the interest on these loans, though in all prior years was paid by the U.S. Department of Education, will not be paid by the government during the six month grace period. Like the Direct Unsubsidized Loan, the interest will accrue during grace periods. If the borrower chooses not to pay the interest that accrues during the grace period, the interest will be added to the principal balance. During deferment periods, the interest on the Direct Subsidized Loan will still be paid by the U.S. Department of Education.