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Federal Direct Student Loan Financial Aid

A Free Application for Federal Student Aid (FAFSA) must be completed before applying for a student loan

  • Students must complete the FAFSA application after October 1st preceding the academic year that the student intends to enroll in and apply for a Direct Loan.
  • Federal Direct Student Loans are low-interest loans for students, and they are not credit-based loans; interest and repayment begin 6 months after graduation or separation from the University, or when enrollment status falls below half-time. There is a 10 to 25 year repayment period.
  • The lender of Federal Direct Student Loans is the U.S. Department of Education.

The Direct Loan Program offers the following types of loans:

  • Subsidized: for students with demonstrated financial need, as determined by federal regulations. No interest is charged while a student is in school at least half-time, during the grace period, and during deferment periods.
  • Unsubsidized: not based on financial need; interest is charged during all periods, even during the time a student is in school and during grace and deferment periods.
  • PLUS: unsubsidized loans for the parents of dependent students and for graduate/professional students. PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest is charged during all periods.
  • Consolidation: Eligible federal student loans can be combined into one Direct Consolidation Loan.

The maximum amount you can borrow each year in Direct Subsidized and Unsubsidized Loans depends on your grade level and on whether you are a dependent student or an independent student. The following table shows the maximum amount of money you may borrow each academic year in Direct Subsidized and Unsubsidized Loans as well as the total or aggregate amount you may borrow:

federal Annual Award Limits For Undergraduate Students

Dependent1Independent2
1st Year$5,500 ($3,500)3$9,500 ($3,500)
2nd Year$6,500 ($4,500)$10,500 ($4,500)
3rd & 4th Year$7,500 ($5,500)$12,500 ($5,500)
Aggregate$31,000 ($23,000)$57,500 ($23,000)

Federal Annual Award Limits for Graduate Students 

For Each Year$20,500 ($8,5004)
Aggregate$138,5005 ($65,500)

1Except those whose parents are unable to borrow a PLUS loan.
2These limits also apply to dependent students whose parents are unable to borrow a PLUS loan.
3The numbers in parentheses represent the maximum amount that may be subsidized.
4Graduate and professional students are not eligible to receive Direct Subsidized Loans for loan periods beginning on or after July 1, 2012.
5The aggregate amounts for graduate students include loans for undergraduate study. 

The amount that is available for a student to borrow is listed on the student's award letter each year.

For any questions regarding the Federal Direct Student Loan, please contact Student Financial Services.

If you haven't previously received a loan at La Sierra University, you must complete the loan Entrance Counseling and Master Promissory Note (MPN) before we can make the first disbursement of your loan. This helps you to understand your responsibilities regarding your student loan. Both the Entrance Counseling and MPN must be completed online at StudentLoans.gov. The MPN is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the Department. It also explains the terms and conditions of your loan(s). To complete an MPN online, you will be required to use your Department of Education-issued PIN. If you do not have a PIN, you may request one from the official PIN site. A parent borrower must also request a PIN number from the PIN site to use when completing a PLUS MPN.
If you have an outstanding principal or interest owing on any direct loan, you begin paying 6 months after you graduate, leave school, or drop below half-time status. You may be allowed up to 10 to 25 years to repay your loan. The amount of your payment depends on the size of your debt. For more information about repaying your Federal Direct Student Loan, click here.
When you graduate, drop below half time, or withdraw from your academic program, you will receive a 6 month grace period for your Direct Subsidized and Unsubsidized Loans. Your grace period begins the day after you stop attending school on at least a half-time basis. Once your grace period ends, you must begin repaying your loan(s). If you re-enroll in school at least half time before the end of your 6-month grace period, you will receive the full 6-month grace period when you stop attending school or drop below half-time enrollment. There is no grace period for Direct PLUS Loans—the repayment period for a PLUS Loan begins on the day after the final loan disbursement is made. However, if you're a graduate or professional student PLUS borrower (or if you're a parent PLUS borrower who is also a student), you can defer repayment while you're enrolled in school at least half time and (for Direct PLUS Loans first disbursed on or after July 1, 2008) for an additional 6 months after you graduate or drop below half-time enrollment. If you're a parent PLUS borrower, you can defer repayment of Direct PLUS Loans first disbursed on or after July 1, 2008, while the student for whom you obtained the loan is enrolled at least half time, and for an additional 6 months after the student graduates or drops below half-time enrollment. Remember, if you choose to defer payment on a Direct PLUS Loan, any interest that accumulates during the deferment period will be added to the unpaid principal amount of your loan. This is called "capitalization," and it increases your debt because you'll have to pay interest on this higher principal balance.

It is important to understand all of the consequences of not repaying your student loans. If you do not make your loan payments, you risk going into default. One of the most common scenarios we come across is when students who have defaulted on a federal student loan, do not realize that they cannot receive further financial aid if they are in default status. Resolving a default status could take some time, so if you find yourself in this predicament, we encourage you to contact the holder of your student loans to make arrangements towards clearing the default status.

For additional information, click here.

Certain conditions may allow you to defer your Federal Direct Student Loan payments. 

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