William D. Ford Federal Direct Student Loans
Eligibility
Federal student loans are available to students who are:
- US citizens or permanent residents
- Matriculated
- Enrolled at least half time (6 credit hours per term) in a degree-seeking program
- Of any age
Please note: Audited courses do not count in determining enrollment status.
Federal student loans are the most beneficial loan options to students and their families and should be pursued before supplemental loans.
To request federal student loans, students must submit the FAFSA (Free Application for Federal Student Assistance) and any other requested documents. Federal student loans consist of the Direct Subsidized Loan, Direct Unsubsidized Loan, and Perkins Loan.
Loan Types
A subsidized loan is awarded on the basis of financial need. You will not be charged any interest while you are in school (enrolled at least half time) or during deferment, as the federal government subsidizes (pays) the interest during these periods.
An unsubsidized loan does not depend on financial need. You will be charged interest from the time the loan is disbursed until it is paid in full. You may pay the interest if you choose while you are still in school or during any deferment periods; if allowed to accrue, it will be capitalized (added to the principal balance) at the beginning of the repayment period, thereby increasing the total cost of your loan.
Interest Rate and Fees
| Academic Year | Undergraduate Student Subsidized Loan Interest Rate |
Graduate Student Direct Loan Interest Rate |
|---|---|---|
| 2008-09 | 6.0% | 6.8% |
| 2009-10 | 5.6% | 6.8% |
| 2010-11 | 4.5% | 6.8% |
| 2011-12 | 3.4% | 6.8% |
| 2012-13 | 3.4% | 6.8%* |
*Please note that the federal government will only offer unsubsidized loans to graduate students beginning on July 1, 2012.
The interest rate for undergraduate unsubsidized, graduate subsidized, and graduate unsubsidized Direct Student Loans is fixed at 6.8%. In 2011-2012 there is an origination fee of 1% charged on federal loans, minus a 0.5% rebate, to net a 0.5% origination fee. This fee will be subtracted from the amount borrowed, and will be reflected in the disbursements issued to the University (for example, a $5,500 loan will be disbursed for $5,473). The rebate is honored provided the student makes 12 consecutive on-time payments once the loan first enters repayment. Beginning on July 1, 2012, the net origination fee will increase to 1% charged on all federal subsidized and unsubsidized loans.
Loan Limits
Depending on individual circumstances, a student may be offered a portion of a subsidized and unsubsidized loan; however, the total combined amount cannot exceed the annual loan limit (base limit). Please see the annual loan limit chart.
Yearly Direct Stafford Loan eligibility is determined by the total number of credit hours earned toward the student's degree.
| Year In School (earned Undergraduate credits) |
Dependent Undergraduate Student Loan limits |
Independent Undergraduate Student Loan limits |
Graduate Student |
|---|---|---|---|
| First Year (0-23 earned credits) | $5,500 (no more than $3,500 subsidized) | $9,500 (no more than $3,500 subsidized) | $20,500 unsubsidized |
| Second Year (24-55 earned credits) | $6,500 (no more than $4,500 subsidized) | $10,500 (no more than $4,500 subsidized) | |
| Third Year (56-87 earned credits) | $7,500 (no more than $5,500 subsidized) | $12,500 (no more than $5,500 subsidized) | |
| Fourth Year (88-119 earned credits) | $7,500 (no more than $5,500 subsidized) | $12,500 (no more than $5,500 subsidized) | |
| Fifth Year (119+ earned credits) | $7,500 (no more than $5,500 subsidized) | $12,500 (no more than $5,500 subsidized) |
In the event of a parent PLUS loan denial (explained in greater detail on the PLUS loans page), students may borrow an additional unsubsidized loan beyond the standard annual limit.
Beginning July 1, 2012, graduate students will be eligible for only Federal Direct Unsubsidized Loan funding not to exceed the yearly $20,500 amount. Students will still be able to apply for a Graduate PLUS loan after receiving their Federal Direct Unsubsidized loan to cover any gaps between their awarded aid and their cost of attendance.
Please note: The actual amount a student is eligible to borrow cannot exceed the University of Rochester's cost of attendance minus any other assistance received.
Aggregate Limits
The total outstanding Federal Direct Student Loan debt an undergraduate, dependent student may have is limited to $31,000 (of which no more than $23,000 may be subsidized). The aggregate limit for an undergraduate, independent student is $57,500 (of which no more than $23,000 may be subsidized). For graduate students, the maximum is $138,500 (of which no more than $65,500 may be subsidized). This aggregate limit figure includes any Federal Stafford/Direct Loans received during undergraduate study.
| Year in School | Dependent Undergraduate Student Loan limits |
Independent Undergraduate Student Loan limits |
Graduate Student |
|---|---|---|---|
| Aggregate Loan Limits | $31,000 (no more than $23,000 subsidized) | $57,500 (no more than $23,000 subsidized) | $138,500 (no more than $65,000 subsidized; includes undergraduate loans) |
Canceling Loans
If you wish to decline either your Federal Direct Loan or Perkins Loan, you (the student) must do so in writing by email, fax, or postal mail. Requests from parents will not be honored. Please note that you must decline your Federal Perkins Loan (if awarded) before declining your Federal Direct Subsidized Loan. If, at a later date, you decide you would like to restore all or a portion of your Federal Direct Loan, you may do so by notifying our office in writing before the end of the academic year or term for which you are enrolled. Please be aware that we may not be able to restore a Perkins Loan due to funding limitations.
Additional Notes on Loans
- Federal loans require multiple disbursements. For example, if you are enrolled in a fall/spring academic year, you will receive half in the fall and half in the spring. If you are enrolled in a fall/winter/spring academic term, you will receive one third of your loans in the fall, one third in the winter, and one third in the spring.
- Once a student drops below half-time enrollment (6 credit hours), withdraws, becomes inactive, or graduates, the Federal Direct Loan enters a 6-month grace period, during which no payments are required. Once the grace period expires, repayment begins.
- Notices to complete federally required exit counseling will be sent during your final term before graduation or shortly after we receive notification that you have withdrawn, become inactive, or dropped below half-time enrollment.
- All federal loans can be consolidated once they enter grace or repayment periods.
