Federal Direct Loans

Subsidized

Unsubsidized

Loan Limits

How to Apply


Federal Direct Loans have a low interest rate and a six-month grace period (a period of time when no payments are due) after enrollment ceases or drops below half-time status. The amount of Federal Direct Loan a student may borrow is determined by the student's grade level in school, based on the number of credit hours earned, and by limits set by the Department of Education.  Students must complete a Free Application for Federal Student Aid (FAFSA) in order to be considered for Federal Direct Loans.  For more information about Federal Direct Loans, please refer to https://studentaid.ed.gov/types/loans.

There are two types of Federal Direct Loans - subsidized and unsubsidized


Federal Direct Subsidized:

These are based on financial need, which is determined by completing the FAFSA.   

        Loans borrowed during the 2014-15 academic year

  • The interest rate is fixed at 4.66%. 
  • Loans are interest free only while the student is enrolled in school.
  • Loans that have a first disbursement before October 1, 2014 have a 1.072% federal default fee. Loans disbursed after October 1, 2014 have a 1.073% federal default fee.  


Federal Direct Unsubsidized:

These loans are not based on financial need; interest starts accruing once the loan disburses. Students may elect to pay the interest as it accrues or defer it until they enter repayment.

        Loans borrowed during the 2014-15 academic year

  • The interest rate is fixed at 4.66%.
  • Loans that have a first disbursement before October 1, 2014 have a 1.072% federal default fee.  Loans that have a first disbursement after October 1, 2014 have a 1.073% federal default fee.  


Subsidized and Unsubsizied Annual Loan Limits

 


Dependent Undergraduates


Independent Undergraduates*

Freshmen $5,500—No more than $3,500 of this amount may be in subsidized loans. $9,500—No more than $3,500 of this amount may be in subsidized loans.
Sophomores $6,500—No more than $4,500 of this amount may be in subsidized loans. $10,500—No more than $4,500 of this amount may be in subsidized loans.
Juniors & Seniors $7,500—No more than $5,500 of this amount may be in subsidized loans. $12,500—No more than $5,500 of this amount may be in subsidized loans.

*This category also includes those undergraduates whose parents are unable to borrow a PLUS.

Lifelong Loan Limits

Dependent undergraduate students may borrow up to $31,000, of which no more than $23,000 may be subsidized.

Independent undergraduate students may borrow up to $57,500, of which no more than $23,000 may be subsidized.

        To be eligible for a Federal Direct  loan, students must:

  • Submit the FAFSA for each academic year she wishes to obtain a Federal Direct loan
  • Be a U.S. citizen or an eligible non-citizen
  • Be enrolled at least half-time as an undergraduate or graduate student
  • Have no prior outstanding student loan in default and not owe a repayment on any federal aid
  • Complete a Master Promissory Note (MPN)
  • Complete entrance counseling prior to receiving the first Federal Direct loan at Saint Mary's College
  • Be meeting Saint Mary's Financial Aid Standards of Satisfactory Academic Progress


To apply for a 2014-2015 Federal Direct Loan:

If you are a new borrower at Saint Mary's College, please complete all of the steps listed below.  This includes transfer students who may have borrowed Federal Direct loan funds or Stafford loan funds at another institution. Returning students who have previously borrowed federal direct loans at Saint Mary's College only need to complete the first step.

  1. Log onto PRISM and accept the loans that were offered as part of the financial aid award letter.
  2. Complete the federally required Entrance Counseling
    • Click the "Sign In" button.  You will need your PIN to complete this.  It is the same PIN used to complete your FAFSA.
    • Once you are signed in, select "Complete Entrance Counseling" from the menu on the left-hand side of the screen.  Please read the information and answer the questions as they appear.
    • When you are asked to select a state and a school, select "Indiana" under School State and "ST MARYS COLLEGE" under School Name. 
    • Read the information presented to you.  You will be quizzed on the information and must successfully answer 12 of 15 questions to pass the entrance counseling quiz.  If you fail the quiz three consecutive times, you will need to wait 48 hours and try again.  Some browsers may allow you to clear your temporary internet files/cookies and try again without waiting 48 hours.
  3. Complete your Master Promissory Note (MPN).
    • On the left-hand side of the page, select "Complete MPN" and then select "Subsidized/Unsubsidized" as the loan type.
    • Continue following the steps as directed.  When you are asked to select a state and a school, select "Indiana" under School State and "ST MARYS COLLEGE" under School Name.

If you experience technical difficulties with either of these processes, please call COD Applicant Services at 800-557-7394.

If you have previously borrowed Federal Direct loan funds through Saint Mary's College:

  1. Log onto PRISM and accept the loans that were offered as part of the financial aid award letter.