Federal Loan Options
Federal Direct Subsidized Loan
- long-term federal student loan that must be repaid
- fixed interest rate for Direct Subsidized Loans for undergraduates with a first disbursement date between July 1, 2012 and June 30, 2013 is 3.4%
- federal government pays the interest on subsidized loans while the student is enrolled in school and during the six-month grace period after graduation or withdrawal from school
- available to students who demonstrate financial need
- 1% origination fee will be deducted from the loan at time of disbursement
- annual loan limits are based on credits earned:
$3,500, 0-29.99 credits;
$4,500, 30-59.99 credits;
$5,500, 60+ credits; - first time borrowers must complete Direct Loan Entrance Counseling and Master Promissory Note at https://studentloans.gov/myDirectLoan/index.action
Federal Direct Unsubsidized Loan
- long-term federal student loan that must be repaid
- allows all students, regardless of need, to obtain a federal student loan
- fixed interest rate for Direct Unsubsidized Loans for all students is 6.8%
- interest accrues during in-school and deferment periods which may be paid or capitalized (added to principle at beginning of repayment)
- 1% origination fee deducted proportionally from each disbursement
- annual loan limits are the same as for Federal Ford Direct Subsidized Loan (above)
- students who are independent or who are dependent and whose parents are denied a Federal Direct PLUS Loan, may borrow additional amounts up to:
$4,000, for each of the freshman and sophomore years;
$5,000, for each of the junior and senior years;
$20,500 for the graduate years - combination of all financial aid and outside resources cannot exceed cost of attendance
- first time borrowers must complete Direct Loan Entrance Counseling and Master Promissory Note at https://studentloans.gov/myDirectLoan/index.action
Federal Direct PLUS Loan
- federal credit-based loan administered by the U.S. Department of Education
- available through UMD to parents of undergraduate, dependent students
- annual loan limit is the cost of education minus any aid received (or eligible for)
- fixed interest rate of 7.9%
- 4% origination fee deducted proportionally from each disbursement
- repayment begins 60 days after second disbursement
- may defer repayment of Direct PLUS Loans while the student for whom the loan was obtained is enrolled at least half-time, and for an additional 6 months after the student graduates or drops below half-time enrollment. You must separately request each deferment period.
- 2012 – 2013 Parent PLUS Loan Application Process (PDF)
Federal Direct Graduate PLUS Loan
- federal credit-based loan administered by the U.S. Department of Education
- available through UMD to graduate students
- annual loan limit is the cost of education minus any aid received (or eligible for)
- fixed interest rate of 7.9%
- 4% origination fee deducted proportionally from each disbursement
- repayment begins 60 days after second disbursement but students may apply for an in-school deferment
- student must submit a Federal Direct PLUS Loan for Graduate Students Pre-Application to Financial Aid Services to start the application process:
Federal Direct Graduate PLUS Loan application for 2012-2013 coming in June 2012
- If Federal Direct PLUS Loan Pre-Application is approved, student must complete Master Promissory Note (Graduate PLUS) at https://studentloans.gov/myDirectLoan/index.action
