Federal Direct Loans 2009 - 2010
The U.S.
Department of Education administers the Federal
Family Education Loan (FFEL) Program and the William
D. Ford Federal Direct Loan (Direct Loan) Program.
Both the FFEL and Direct Loan programs consist of
what are generally known as Stafford Loans (for
students) and PLUS Loans
for parents
and
graduate and professional degree students.
Tufts participated in the FFEL program in the past,
and beginning this year will participate in the
William
D. Ford Federal
Direct Loan program instead. We will no longer
have Stafford lenders; loan funds will come instead
directly from the government. Details on this
Tufts change can be found here:
Direct Loan
program.
If you wish to borrow a Direct
Loan, and it is not already part of your current
award package, please contact your aid counselor to
determine eligibility. Loan details provided
by the government can be found on their web site
here. Their Customer Service phone line is:
(800) 848-0979 or (315) 738-6634
Subsidized
Direct Loan
The Direct loan is a federally subsidized loan, which means that there
are no interest charges while you are enrolled at least half time, and for six months after you leave school or drop
below half time. This six month period is called a grace period.
Depending on eligibility, undergraduates may borrow
Subsidized Direct loan in amounts up to $3500 in the first year,
$4500 in the second year, and $5500 in each of the third and fourth years.
Loan amounts are divided in half and disbursed per
semester. The Undergraduate interest rate for 2009 - 2010 is
5.6%. A fee of 0.5% is charged,
subtracted from the amount borrowed.
If eligible, Graduate students may borrow up to $8500
in Subsidized loan per academic year. See the
chart below for full details on loan limits. The interest rate for Graduate borrowers for 2009 - 2010 is 6.8%.
Unsubsidized Direct Loan
Any student ineligible for a Subsidized
Direct Loan you may borrow an Unsubsidized
Direct Loan. Unsubsidized means that all interest charges
for this loan are
the responsibility of the borrower. The rate
is 6.8% fixed for the life of the loan.
Fees are 0.5%. Loan limits are shown below. Borrowers can choose to make
interest payments by checking off the appropriate box on the Master Promissory Note.
You may choose to capitalize the interest (add interest charges to the amount owed)
but this will significantly increase the total
amount of your debt burden at repayment. See
loan limits below.
Undergraduate students who borrow their maximum grade
level Subsidized Direct Loan can now also borrow an
additional $2000 in Unsubsidized Direct Loan.
Also, if the parent of an Undergraduate student is
denied a federal PLUS loan, the student may borrow
additional amounts (see below** for limits) in
Unsubsidized loan.
Concerned about loan indebtedness, and the impact of
loan repayment on future quality of life, we
encourage students not to borrow unless absolutely
necessary.
Deferments
A deferment is a period of time during which the
repayment of principal, and/or interest, of your
federal student loan may be postponed temporarily.
For a Direct Loan (DL Subsidized/Unsubsidized/PLUS)
deferment form go
here, or call the Direct Loan Servicing
Center at: 1-800-848-0979.
This is a link for Direct Loan deferment
details.
Contact information for Direct Loans
can be found
here.
Deferments for Stafford loans
borrowed in prior years via banks or other lending
institutions (FFEL loans) can be accessed through your lender, or
through the MA state servicing agency,
American
Student Assistance (ASA.) You may also reach ASA
directly, at (800) 999-9080.
Students who have both FFEL and DL
loans will need to complete a deferment form for
each.
Federal Direct Loan Limits
The Department of Education sets annual and aggregate
(i.e. lifetime) limits on the amount of debt a
student can obtain from the federal government. The
chart below summarizes the current limits for the
Federal Direct Loan.
| Grade Level |
Dependent Undergraduate
Student |
Independent
Undergraduate Student
** |
Graduate
Student |
| 1st Year/Freshman |
$5,500—No more than $3,500 of this amount
may be in
Subsidized loan.
|
$9,500—No more than $3,500 of this amount
may be in Subsidized loan. |
$20,500—No more than
$8,500 of
this amount
may be in Subsidized loan.
|
| 2nd Year/Sophomore |
$6,500—No more than $4,500 of this amount
may be in Subsidized loan.
|
$10,500—No more than $4,500 of this amount
may be in Subsidized loan.
|
3rd Year/Junior
4th Year/Senior
|
$7,500—No more than $5,500 of this amount
may be in Subsidized loan.
|
$12,500—No more than $5,500 of this amount
may be in Subsidized loan.
|
| Maximum lifetime Stafford
borrowing |
$31,500—No more than $23,000 of this amount
may be in Subsidized loan.
|
$57,500—No more than $23,000 of this amount
may be in Subsidized loan.
|
$138,500—No more than $65,500 of this amount
may be in Subsidized loan.
|
|
** Also applies to
dependent undergraduate students whose parent
was denied a PLUS loan. |
>> Did you receive a Stafford loan in any prior year
at Tufts? If so, only Step 1 below must be
completed, as you have already completed the
Entrance Counseling requirement.
>> Did you receive a Direct loan at another
institution? If so, no action is necessary to
receive a Direct
Loan this year, as you have already completed the 2
step process.
If you are unsure if you received a Stafford loan or
a Direct Loan in previous years, call us at
617.627.2000 and we can check for you, or you can
check online at:
National Student Loan Data System (NSLDS)
If you have noted the above caveats, AND a Direct
Loan is a part of your current aid package (you can
check here) the
following steps complete the application process.
STEP
1. Complete a Direct Loan Master Promissory Note (MPN)
Electronically
here.
It will take approximately 30 minutes to complete
the MPN.
a. You will need a valid e-mail address, and
must have the PIN given to you when you completed
your Free Application for Federal Student Aid
(FAFSA). If you have lost your PIN go to
www.pin.ed.gov to have it sent to you
electronically.
b. Have on hand the names, addresses and
phone numbers of two people (friend or family) that
will be required as references.
STEP 2. Complete Entrance Counseling
here
The counseling explains about a student’s rights and
responsibilities as a loan borrower. Click on the
link that says Stafford Loan (Direct Stafford
Loan program.) Graduate Students who borrow both
Direct and PLUS loans will click on the
Combination link. Completion of entrance counseling
is required before loan funds can be disbursed.
If you encounter problems with completing the Master
Promissory Note you may call the Applicant
Information Center at: 800.557.7394
|
