The US Government provides families access to federal student loans. ALL students borrowing from the Federal Direct Loan Program are required to sign a Master Promissory Note (MPN) and complete online Entrance Counseling for their Direct Loan. Federal loan funds will not be credited to the PSU bill until these items are completed.
Subsidized and Unsubsidized Loans
The Federal Direct loan(s) awarded to you may be subsidized and/or unsubsidized, as described below:
A SUBSIDIZED Federal Direct loan is awarded on the basis of financial need. Interest will begin accruing at the time you graduate, withdraw from school, or are no longer enrolled at least half-time. The interest rate for loans disbursed after July 1, 2013 is 3.86%.
An UNSUBSIDIZED Federal Direct loan is a non-need based loan. You will be charged interest (3.86%) from the time the loan is disbursed until it is paid in full. If you allow the interest to accrue (accumulate) while you’re in school, or during other periods of non-payment, it will be capitalized. This means the interest will be added to the principal amount of your loan at the time of repayment.
All Federal Direct Subsidized or Unsubsidized loans disbursed between July 1 and November 30, 2013, will be charged a fee of 1.051%. Any loans with a first disbursement after December 1, 2013, will be charged a fee of 1.072%. The fee will be applied before any loan funds are disbursed.
Please note the following eligibility requirements must be met in order to be awarded Federal Direct Loans:
(1) Students must be matriculated (enrolled in a degree seeking program) and enrolled at least half-time (6 credits or more per semester).
(2) Students cannot be in default on any Federal Loans.
(3) Federal Direct annual and aggregate loan limits apply. Dependent undergraduate students are eligible for up to $31,000 (no more than $23,000 of which may be subsidized). Independent undergraduate students and dependent students whose parents are ineligible for a Federal PLUS Loan are eligible for up to $57,500 (no more than $23,000 of which may be subsidized).
If your class level changes during the year, you may be eligible for an increase in your Federal Direct Loan. For example, a second year student might begin the fall semester with 19 credits and have Federal Direct Loans totaling $5,500. During the fall semester, the student earns 12 credits, for a total of 31 credits by the beginning of the spring semester. The spring loan award could then be increased from $2,750 to $3,750 upon request. If you wish to request an increase in your loan amount, please contact us.
Not sure how much your monthly payments will be?
Many online loan repayment calculators can be found online, including the ones at FINAID.org and the Department of Education. You can use these to estimate how much you will need to repay once you graduate. Please note, the longer your loan is in repayment, the more interest you will pay. Calculations are estimates. Values may not reflect the actual amount computed by the Direct Loan Servicing Center.
Verifcation on who services your federal loans and total amount of federal loans borrowed may be found through the National Student Loan Data System (NSLDS) . This site contains all of your federal Title IV financial aid history, including both grants and loans.
You may also view your PSU Loan History online to estimate the total amount borrowed in Federal, Private and PLUS loans while at PSU. This information pulls student’s loan history accessed from the PSU portal and displays it to help each student understand the impact of loan debt upon graduation and repayment. Students can track this information beginning their first year at PSU through the time they graduate.
Information about loan discharge and cancellations can be found on the Department of Education website.
The Federal Student Aid Ombudsman of the Department of Education helps resolve disputes and solve other problems with federal student loans. Please do not hesitate to contact them at 877-557-2575 should you feel they can be of assistance.