Federal Direct Loans are low-interest loans offered by the U.S. Department of Education to eligible students to help fund their education.

Types of Federal Direct Loans

There are two types of federal direct loans: subsidized and unsubsidized.

Direct Subsidized Loans

Direct subsidized loans are for undergraduate students to help cover the costs of their education.

Direct Unsubsidized Loans

Direct unsubsidized loans are for undergraduate and graduate students. However, eligibility is not based on financial need for these loans. There is no requirement to provide proof of financial need to receive a direct unsubsidized loan.

Eligibility for Federal Direct Loans

Eligibility for Direct Loans are determined by Cost of Attendance and estimated family contribution, which will be calculated each year you fill out your FAFSA form.

Interest will be paid by the government while you are enrolled at least half time (6 credits), during your grace period, or any periods of deferment.

Please visit the government Student Aid website for the current interest rates.

Am I Eligible for Direct Loans?

To receive subsidized and unsubsidized loans, you will need to be enrolled at least half-time, and fill out a FAFSA form via the Application process. Please keep in mind that your eligibility will be readjusted when you fill out a FAFSA form for each academic year during your enrollment.

Please keep in mind that your eligibility can change from year to year when completing a FAFSA application.

Annual Loan Limit for Subsidized and Unsubsidized Loans

There is a limit to how much you can take out, which depends on your enrollment status and the year you are currently enrolled in.

Dependent Students

Minimum/Maximum Annual Loan Limit for First Year Dependent Students:

  • $5,500-No more than $3,500 of this amount may be in subsidized loans.

Minimum/Maximum Annual Loan Limit for Second Year Dependent Students:

  • $6,500-No more than $4,500 of this amount may be in subsidized loans.

Independent Students

Minimum/Maximum Annual Loan Limit for Undergraduate First Year Independent Students:

$9,500-No more than $3,500 of this amount may be in subsidized loans.

Minimum/Maximum Annual Loan Limit for Undergraduate Second Year Independent Students:

  • $10,500-No more than $4,500 of this amount may be in subsidized loans.

For more information, please visit the government Student Aid website.

Key Dates for Federal Direct Loan Borrowers

January 28 (4:30 pm) – Pell Recalculation Date for Spring 2022

June 10 (4:30 pm) – Pell Recalculation Date for Summer 2022

April 1 – Priority Deadline for 2022-2023 FAFSA. (Apply by this date to be eligible for the greatest amount/types of assistance.)

May 13 – Deadline to accept Direct Loans for Spring 2022

June 10 (4:30 pm) – Pell Recalculation Date for Summer 2022

June 30 – Deadline to have FAFSA filed to be eligible for Summer 2022 Financial aid

July 31 – Deadline to submit Summer 2022 Financial Aid online request form

August 12 – Deadline to accept Direct Loans for Summer 2022

line to submit verification documents (your taxes, parent’s taxes, etc.) for the 2021-2022 year

September 9, 2022 (4:30 pm) - Pell Recalculation Date for Fall 2022

Policies and Requirements for Federal Direct Loans

If you received a Federal Direct Loan(s) and you graduate, drop below half-time or withdraw, you are required to complete Exit Loan Counseling. Once you finish Exit Counseling, it’ll provide you the obligations and options regarding the repayment of your Federal Direct Loan(s).

Repayment plans for Direct Loans are designed to provide flexibility to suit your budget. Visit the government Student Aid website for more information.

Disbursement Information

We disburse funds to student accounts weekly, generally on Tuesdays. Some exclusions may apply. Funds are disbursed to accounts for which all documents have been received and processed.

No disbursement during the weeks between aid years (August 29, 2022 through September 9, 2022) and during the winter campus closure.

Steps After Receiving Award Offer Letter

  1. After receiving your Award Offer Notification in your student email, you will need to log in to your myMadisonCollege account and accept or decline your awards. Awards include both the fall and spring semester, and you will need to accept enough for the entire aid year.
  2. Complete Entrance Counseling to better understand your responsibilities and obligations by borrowing student loans.
  3. Complete a Subsidized/Unsubsidized Master Promissory Note (MPN). The MPN is a legal document in which you are promising to repay your loan(s) and any accrued interest and fees to the U.S. Department of Education.
  4. Complete the Annual Student Loan Acknowledgement (ASLA).

For more information on Direct Loans, please visit StudentAid.gov.

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