Federal Direct Subsidized Stafford Loan
A Federal Direct Subsidized Loan is awarded to meet financial need after other resources are subtracted or to the annual maximum loan limit, whichever is lower. It is the U.S. Department of Education's major form of self-help aid and is available through the William D. Ford Federal Direct Loan Program. The interest rate for Federal Direct Subsidized loans disbursed on or after July 1, 2006 until June 30, 2008 is fixed at 6.8%. Beginning July 1, 2008, Federal Direct Subsidized loans offered to undergraduate students will have a fixed interest rate of 6.0%. Federal Direct Subsidized loans for graduate students will remain at the fixed rate of 6.8%. The federal government pays interest on the loan until you begin repayment.
Apply for a Federal Direct Subsidized Loan
To apply for a Federal Direct Subsidized Loan, you must complete the FAFSA. To be eligible, you must be enrolled for at least six hours per semester. If you are eligible for a Federal Direct Subsidized Loan, it will be included on your financial aid award letter.
Accept a Federal Direct Subsidized Loan
A Federal Direct Subsidized Loan is automatically accepted for you. A Master Promissory Note (MPN) and Entrance Counseling are required for Federal Direct Loans before the loan funds will be disbursed. In most cases, you will only be required to complete one MPN and complete one entrance counseling session during your college career.
It is important to know that subsidized loan funds will automatically credit to your student account if the our office reflects that you have a valid MPN and entrance counseling on file.
Reduce or Reject a Federal Direct Subsidized Loan
If you would like to reduce or decline the loan, you must inform OSFA by completing section 3 on the back of your award letter, sign, and return it to OSFA. You can also make changes to your loan by submitting a completed and signed copy of the Request to Accept, Decline or Reduce Your Federal Direct Student Loan(s).
