Federal Direct Student Loans
Student loans are financial aid that must be repaid with interest. There are different types of federal loans available to undergraduate and graduate students, as well as parents of dependent undergraduate students. These loans require that you complete the Free Application for Federal Student Aid (FAFSA). This helps determine which loans you qualified for. Depending upon the specific loan program, repayment may begin while you are still enrolled, or after the you leave school or drop below half-time enrollment.
Wayne State College is required to send federal financial aid information to the National Student Loan Data System (NSLDS). You can access your student loan information at https://studentaid.gov. You will need to log in with your Federal Student Aid (FSA) ID.
How to apply for aid File the FAFSA
Subsidized vs. unsubsidized loans
Your Federal Direct Loan may be subsidized, unsubsidized, or the combination of the two. Subsidized loans have slightly better terms to help students with financial need.
Subsidized Federal Direct Loan
- Direct subsidized loans are awarded to undergraduate students based on demonstrated financial need and academic grade level.
- Financial need is determined by your cost of attendance minus your Estimated Family Contribution (EFC) from the FAFSA and any other aid you receive.
- The amount you receive is determined by WSC and may not exceed your financial need.
- The U.S. Department of Education pays for the interest on your loan while you are in school at least half time, for the first six months after you leave school (referred to as a grace period), and during a period of deferment (a postponement of loan payments).
- Depending on your financial need, you may borrow subsidized money for an amount up to the annual loan borrowing limit for your level of study.
- For current interest rates, refer to the Federal Student Aid website.
Unsubsidized Federal Direct Loan
- Direct unsubsidized loans are available to undergraduate and graduate students, regardless of financial need.
- The amount you receive is determined by WSC based on your cost of attendance and other financial aid you receive.
- Unlike a subsidized loan, you are responsible for paying the interest on the loan during all periods until it is paid in full. You can choose to pay the interest or allow it to accrue (accumulate) and be capitalized (added to the principal amount of your loan). Capitalizing the interest will increase the amount you have to repay.
- For current interest rates, refer to the Federal Student Aid website.
How to apply for a federal direct student loan
- Complete the Free Application for Federal Student Aid (FAFSA)
- Complete the Entrance Loan Counseling, a tool to ensure you understand your obligation to repay the loan. All first-time borrowers must complete this before funds will be made available.
- Complete the Master Promissory Note (MPN), a loan contract agreeing to the terms and conditions of the loan. All first-time borrowers must complete this before funds will be made available.
Loan limits
There are limits to the loans that you may be eligible to receive each academic year (annual loan limits), and to the total amounts that you may borrow for undergraduate and graduate study (aggregate loan limits). The actual loan amount you are eligible to receive each academic year may be less than the annual loan limit. These limits vary depending on your academic grade level and whether you are a dependent or independent student. If you are a dependent student whose parents are not eligible for the Direct PLUS Loan, you maybe able to receive additional Direct Unsubsidized Loan funds.
The following chart shows the annual and aggregate limits for subsidized and unsubsidized loans.
| Academic year |
Dependent students (except students whose parents are unable to obtain PLUS Loans)
|
Independent students (and dependent undergraduate students whose parents are unable to obtain PLUS Loans)
|
|---|---|---|
|
First-Year Undergraduate Annual Loan Limit
|
$5,500 - No more than $3,500 of this amount may be in subsidized loans.
|
$9,500 - No more than $3,500 of this amount may be in subsidized loans.
|
| Second-Year Undergraduate Annual Loan Limit | $6,500 - No more than $4,500 of this amount may be in subsidized loans. | $10,500 - No more than $4,500 of this amount may be in subsidized loans. |
| Third Year and Beyond Undergraduate Annual Loan Limit | $7,500 per year - No more than $5,500 of this amount may be in subsidized loans. | $12,500 - No more than $5,500 of this amount may be in subsidized loans. |
| Graduate or Professional Student Annual Loan Limit | Not applicable (all graduate and professional degree students are considered independent) | $20,500 (unsubsidized only) |
| Subsidized and Unsubsidized Aggregate Loan Limit | $31,000 - No more than $23,000 of this amount may be in subsidized loans. | $57,500 for undergraduates - No more than $23,000 of this amount may be in subsidized loans. $138,500 for graduate or professional students - No more than $65,500 of this amount may be in subsidized loans. The graduate aggregate limit includes all federal loans received for undergraduate study. |
Mid-Year Grade Level Loan Adjustments
Your financial aid is packaged on an annual basis. If you change grade levels during the middle of the academic year and would like to be considered for additional loan funds based on your new grade level, please contact the Financial Services Office to request a review of your enrollment hours and financial aid package.
Loan interest rates and fees
The interest rates for Direct Subsidized Loans and Direct Unsubsidized Loans first disbursed on or after July 1, 2023, and before July 1, 2024, are as follows:
- 5.50% for undergraduate students (subsidized and unsubsidized)
- 7.05% for graduate students (unsubsidized)
For the most current interest rates, please visit the Federal Student Aid website.
Loan fees
Direct Subsidized Loans and Direct Unsubsidized Loans have a loan fee. The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement. The percentage for all Direct Subsidized and Unsubsidized loans first disbursed on or after Oct. 1, 2020, is 1.057%.
Exit counseling
The purpose of exit counseling is to ensure you understand your student loan obligations and are prepared for repayment. All students who have borrowed Federal Direct Loans must complete exit counseling when they graduate, withdraw from school, transfer out, or drop below half-time enrollment. To learn more about exit counseling, visit the Federal Student Aid website.