Federal Direct Loan

Federal Direct Loan

The Federal Direct Loan is a long-term, low-interest loan that is awarded by the Office of Financial Aid. The lender is the U.S. Department of Education. This loan is not based upon your credit history or income. The amount you may receive for the academic year is based on your financial need and academic level and is determined by the Office of Financial Aid.

Repayment of the principal begins 6 months after you cease half-time enrollment, and the average repayment term is 10 years.

Subsidized vs. Unsubsidized Direct Loans

Your Direct Loan award may be Subsidized, Unsubsidized, or a combination of the two.

Subsidized Loans are awarded on the basis of financial need. They are interest-free while you are enrolled at least half-time and during periods of authorized deferments. The federal government subsidizes the interest during these periods. Interest will be charged once you enter repayment.

Unsubsidized Loans are not awarded on the basis of need, but they do take into consideration your cost of attendance and any other aid you receive. You are charged interest from the time the loan is disbursed until it is paid in full. You may choose to defer the interest during enrollment and deferment periods, but it will be capitalized (added to the principal amount).

Interest Rate and Loan Fees

Direct Loans have a fixed interest rate.  

The interest rate on subsidized loans borrowed for the 11-12 year will be 3.4%.  

The interest rate on unsubsidized loans borrowed for the 11-12 year will be 6.8%

Loan Limits

The chart below lists the maximum yearly amounts that you may borrow in both Federal Subsidized and Unsubsidized Loans. You may receive less than this maximum amount if you receive other financial aid that is used to cover a portion of your cost of attendance.


Dependent Students (EXCEPT Students Whose Parents are denied a PLUS loan) Base Amount Additional Unsubsidized loan amount
Freshman $3,500 $2000
Sophomore $4,500 $2000
Junior $5,500 $2000
Senior $5,500 $2000
Independent Undergraduate Students & Dependent Students Whose Parents are denied a PLUS Loan Base Amount Additional Unsubsidized loan amount
Freshman $3,500 $6000
Sophomore $4,500 $6000
Junior $5,500 $7000
Senior $5,500 $7000
Graduate and Professional Students Base Amount Additional Unsubsidized loan amount
  $8,500 $12, 000


The total amount that you may borrow from all combined Stafford Loans is:

Dependent Undergraduates: $31,000* (of which no more than $23,000 can be subsidized)

Independent Undergraduates: $57,500* (of which no more than $23,000 can be Subsidized)

Graduate/Professional Students: $138,500* (of which no more than $65,500 can be Subsidized). This debt includes any Stafford Loans borrowed during Undergraduate study.

Effective July 1, 2008

How Do I Apply For A Direct Loan

By filing the FAFSA, you are automatically considered for Federal Direct Loan eligibility. The Federal Direct Loan award on your Financial Aid Award Notice indicates the loan amount that you are eligible to borrow.

Returning Borrowers:

If you have borrowed a Federal Direct Loan in previous years, filing the FAFSA is the only step needed to renew your loan. You do not need to complete Steps 1 and 2 listed below.

New Borrowers:

To accept this loan and have it apply toward your Fall bill, you must complete the following two steps:

Step 1: Complete the online Direct Loan Entrance Counseling Session
The online Entrance Counseling session will explain your rights and responsibilities as a borrower. You should understand the importance of borrowing loan funds before completing your promissory note. You may complete the session by going to www.studentloans.gov, click "Sign In" in the "Manage My Direct Loan" box, and click "Complete Entrance Counseling".

Step 2: Complete the online Master Promissory Note (MPN)
The Master Promissory Note (MPN) is your official Direct Loan application. By completing it, you agree to your rights and responsibilities as a borrower and consent to Federal Direct Loan funds being transmitted to your Mansfield account. You will only need to complete your MPN once during your enrollment at Mansfield University. Your loan will automatically be renewed each year.

While completing your MPN, please keep the following in mind:

  • You will be asked to select the school that you will be attending. You must select Mansfield University (school code 003324).
  • You will need your Federal Personal Identification Number (PIN). This PIN was assigned to you when you completed your Free Application for Federal Student Aid (FAFSA). If you do not have this PIN, you may request it at http://www.pin.ed.gov.
  • You will need the name and addresses of two (2) references. One reference may be a parent.

Exit Counseling

An exit counseling session is a loan counseling session that provides loan repayment, grace period, billing options information, and collects updated borrower information. These online exit counseling sessions provide the borrower with the rights and responsibilities as a Federal loan recipient. The Student Registration and Financial Services Office sends out notification by mail to all students who are required to complete exit counseling. You are required to complete the counseling if you:

  • Graduate
  • Withdraw from the University or stop attending
  • Drop below half-time status (6-credits)

This requirement can be completed online via www.studentloans.gov. We will receive electronic notification upon completion.

If you have any issues or questions regarding this process, please contact our office at 570.662.4411