Direct Loans 101
What is a Direct Loan?
are made available to student borrowers through the federal government. Students who are enrolled at least half-time may borrow a Direct Loan to pay for their education expenses. Before a student can borrow a loan, the student must apply for financial aid and be eligible to receive the loan.
How Is Eligibility Determined?
In order to apply for a Direct Loan, you must first complete the. The resulting Institutional Student Information Report (ISIR) is sent to your school and determines your eligibility. This sets the stage for how much you can borrow. Whether you apply electronically, or complete a hard copy loan application, the financial aid office must certify your eligibility for the loan before the application can be processed.
Direct Unsubsidized Loans
While there are two types of Direct Loans – subsidized and unsubsidized – medical students and other graduate students, are only eligible for unsubsidized loans. Direct Unsubsidized Loans accrue interest from the date the loan is disbursed until the loan is paid in full.
Interest rates are set by the federal government and the law currently dictates that loans disbursed after July 1, 2013 will have a variable/fixed interest rate. This means that interest rates on Direct Loans will be adjusted annually on July 1st and then when the loan is disbursed, the rate will be a fixed rate, which will remain fixed for the life of the loan. Therefore, depending on when the loan is disbursed, borrowers may have multiple Direct Loans with different interest rates. To view current and historical federal loan interest rates, visit thewebsite.
How Much Can You Borrow?
Students can borrow only what’s needed to meet their personal budget, or cost of attendance, as determined by their school. Typically, the cost of attendance includes tuition, fees, books/supplies, an allowance for room and board, and possibly required miscellaneous expenses.
What if a Direct Loan Doesn’t Cover All Your Expenses?
If you need additional aid, contact your financial aid office to learn about other federal loan options or institutional aid that may be available.
The financial aid administrator at your school should be your first resource when you have questions about student loans or other financial aid concerns.
Financial Information, Resources, Services, and Tools (FIRST)
MedLoans® Organizer and Calculator (MLOC)
655 K Street, NW, Suite 100
Washington, DC 20001-2399