Federal Direct Loans
Federal Direct Loans are low-interest loans provided to you, if eligible, after your high school graduation to help with the cost of college. To be eligible, you must:
- be enrolled at least half-time
- be a U.S. citizen or eligible non-citizen
- be enrolled in a program of study leading to a degree
Apply for a Federal Direct Loan
If you are interested in student loans, and you are a first-time borrower, you will need to complete:
FAFSA and SAINT Student
Fill out a Master Promissory Note
You must complete a Master Promissory Note (MPN) to apply for a loan. The MPN is a legally binding agreement to repay your loan to the U.S. Department of Education. In most cases, one MPN for the Direct Subsidized and Unsubsidized can be used for loans that you receive over several years of study. You can fill out the MPN online at www.studentloans.gov.
Federal Direct Loan Counseling
Prior to receiving a federal loan, students must complete Entrance Counseling to ensure that you understand the responsibilities and obligations you taking on by getting a loan. This requirement will be fulfilled during your SAINT Student completion.
You will be expected to complete Exit Counseling upon graduation or if you drop below half-time enrollment. Exit counseling provides important information to prepare you to repay your federal student loan(s). To complete Exit Counseling, students will sign in using their FSA ID and provide details on their income, financial aid history, and living expenses.
Students and their families can learn more about federal student aid, including how to repay your loans, at www.studentaid.ed.gov.
Apply for a Federal Parent PLUS Loan
Students who need more loans to cover tuition and fees, and possibly living expenses, can consider Parent PLUS Loans (or Alternative Loans).
Eligibility Criteria for a Parent PLUS Loan
Most federal student loan applications don’t include a credit check or credit requirements, but there’s one notable exception: PLUS Loans. The Parent PLUS Loan application includes a credit check and sets a standard of credit you must meet to get approved.
While your credit score isn’t a factor, other information on your credit report might be. Specifically, the Parent PLUS Loan application uses the credit check to screen for “adverse credit.” Adverse credit history is a negative mark on your credit report, including:
- Debt worth $2,085 or more that, within the past two years, was sent to collections, written off, or delinquent for 90 days or more
- Any of the following events within the past five years:
- Default determination
- Debt discharged through bankruptcy
- Tax lien
- Wage garnishment
- Federal student loan or other aid debt written off
How to Apply
Biological and adoptive parents, who are U.S. Citizens or Eligible Non-Citizens, may borrow a Parent PLUS Loan to help fund their student’s education.
First time borrowers must complete an application online at studentloans.gov. After completing the application, you will be guided to complete a Master Promissory Note (loan agreement).
If you have borrowed a PLUS Loan in past years, you may not need to apply online again. After you and your student have decided on the amount you wish to borrow, please email Financial Aid to request the loan for the upcoming school year.
Denial of a Parent PLUS Loan
If your application for a federal direct parent PLUS loan is denied, you have a couple of options for borrowing as a parent. Option 1 & 2 seen below are the most common methods taken.
Seek an Endorser.
This endorser will be subject to a credit check and must meet the non-adverse credit requirement. An endorser, like a co-signor, legally takes on the responsibility of repaying your parent PLUS debt if you cannot.
STEP 1: An endorser will complete an addendum at studentloans.gov. The Endorser Code will be sent in an email to you. If you have trouble locating the Endorser Code, please email Financial Aid.
STEP 2: If your endorser is approved, you’re expected to complete credit counseling on the federal student loan website.
STEP 3: You must email firstname.lastname@example.org once the above steps have been completed.
Student borrows additional Direct Unsubsidized Loans.
A dependent student whose parent is denied a Parent PLUS Loan becomes eligible for the same Direct Unsubsidized Loan limits available to independent undergraduate students. Your student can get increased loan limits, which vary according to class level (limited to $4,000 or $5,000 higher per year). These undergraduate loans have lower interest rates and fees than the PLUS Loans and will be in the student’s name. To receive this loan support, the student must email Financial Aid to request it.
Appeal the decision with the Department of Education.
You can appeal if you can prove your adverse credit ruling is based on incorrect, incomplete, or out-of-date information. You must fully document the extenuating circumstances related to the debt. After filing an appeal, the decision is left to the Department of Education. If your appeal is granted, provide the documentation to Financial Aid so that we may proceed with processing your loan.
Borrow a parent loan with a private lender.
To qualify for a private parent loan, you’ll typically need a good credit score and a steady income. In addition, the standard to qualify for Parent PLUS Loans is less strict than the standard to qualify for private student loans so this may not be a sound option. Private lenders can be reviewed at https://www.bryanhealthcollege.edu/bcohs/admission/tuition-financial-aid-scholarships/alternative-student-loans/
Repayment of Federal Loans
When you borrow a federal student loan from the government, you will be assigned a loan servicer. Servicers are companies that collect your loan payments and report your payments to the credit bureau. Your servicer can also help you lower your payment and setup automatic payments. Your servicer is the company that sends you a billing statement each month.
You are required to begin repayment on your loans if you fall below half-time enrollment.
National Student Loan Data System (NSLDS) can be a valuable tool in keeping track of your student loan information. You can check on your federal student loans by going to NSLDS.ed.gov. Here you can find your amounts, balances, interest rates and loan status (in repayment, in default, etc.). Your loan servicer is who manages your loan and who you repay. If you are unsure who your loan servicer is, you can locate their contact information on NSLDS’s website.
Eligibility Requirements for Loans
- You must be enrolled at least half-time
- You must be a U.S. citizen or eligible non-citizen
- You must be enrolled in a program of study leading to a degree
How Your Federal Loans Get Reported
When you borrow a federal student loan from the government, you will be assigned a loan servicer. Servicers are companies that collect payments on a loan and perform other administrative tasks associated with maintaining a loan (i.e. work out lower payment options with you, setup automatic payments, report your payments to the credit bureau, etc.). Your student loan servicer is the company that sends you a billing statement each month. All federal loans will be reported to the NSLDS and will be accessible by guaranty agencies, lenders and schools who are authorized users.