Federal Direct Loans

Federal Direct Loans are available as unsubsidized loans for graduate students. A student may qualify for an unsubsidized loan regardless of need. The student is responsible for paying interest on the unsubsidized loan while enrolled. Interest payments begin accruing 60 days after the loan is disbursed. Repayment on the loan principal begins six months after the student ceases to be enrolled. Payments on interest and principal of an unsubsidized loan may be deferred, but interest will accrue and compound. A graduate student may be eligible for amount up to $20,500 annually, provided that the total amount of assistance does not exceed the cost of the graduate program. An origination fee of 1 percent is deducted from the proceeds of all loans.

The procedures for filing for a loan will be explained when the student is notified about eligibility. As with all financial aid requests, the student must submit the FAFSA to the federal processor. (Even though an unsubsidized loan does not require analysis of need, the student must still submit the FAFSA.)

Loans are disbursed in two equal payments, one each semester. Electronic disbursements are credited to a student’s account when they are received. The amount of a loan typically includes an allowance for expenses, in addition to program fees. If the loan creates a credit balance in the student’s account after the amount due the program has been paid, the amount is refunded directly to the student within 14 days of the date on which the balance was created, or within 14 days of the first day of classes of the payment period, whichever is later. The student should not expect to receive this refund before the end of the 14-day processing period; hand checks are not issued. A student who chooses to leave the excess funds in the account as a credit toward a future term’s fees must send written notice of this choice to the Student Accounts Office.

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