Federal Direct Subsidized & Unsubsidized Loans (William D Ford Direct Student Loans)

Subsidized and Unsubsidized Federal Stafford Loans

Paul Smiths College participates in the Federal Direct Student Loan program. The interest rate on a Direct Stafford Loan is usually better than many of the non-Federal alternative student loans. The interest rate for subsidized Direct Stafford Loans for undergraduate students is currently a fixed rate of 3.4 percent. For unsubsidized Direct Stafford Loans, the current interest rate is a fixed 6.8 percent.

A subsidized Direct Stafford Loan is awarded based on financial need. You will not be charged interest before you begin repayment or during authorized periods of deferment. The Federal government "subsidizes" the interest during these periods.

An unsubsidized Direct Stafford Loan can be awarded regardless of financial need. You will be charged interest from the time the loan is disbursed until it is paid in full. If you allow that interest to accumulate, it will be added to the principal amount of your loan.

For students who are offered and accept a Federal Direct Stafford Loan as part of their financial aid package, the application process is straight forward. You will be required to fill out a single Master Promissory Note (MPN) and the Entrance Counseling for your Stafford Loan. It is your responsibility to review all terms and conditions of the loan, as well as to complete the MPN and Entrance Counseling. Once the MPN and Entrance Counseling is received and processed, and your loan funds are disbursed, the Direct Stafford Loan estimate indicated on your bill will be removed and become an actual credit (half of the loan will be disbursed each semester). You will be notified within 30 days of the date that the funds were credited to your account. You have 14 days from the date indicated in the letter to cancel all or a portion of your loan.

Federal Stafford Loan limits for dependent students are as follows:

Repayment begins six months after graduation with several payment options. Each year, your Financial Aid Award letter will notify you of your eligibility of a Federal Direct Stafford Loan. Repayment on both loan types (subsidized and unsubsidized) is deferred while a borrower is enrolled on at least a half-time basis. You may choose to pay interest on an unsubsidized loan while in school. To be considered for a Direct Stafford Loan, you must file the FAFSA form. If your first year award includes a Federal Direct Stafford Loan, you should anticipate that Paul Smiths College will usually offer the maximum allowable Federal Direct Stafford Loan each year. As always, it is your option to accept or decline all or part of this loan.