Kettering University participates in the Federal Direct Stafford Loan Programs. Students and/or Parents borrow directly from the federal government.
Eligibility
Federal Direct Stafford Loans are for undergraduate, graduate and professional degree students, enrolled at least half-time, who meet the general requirements to receive federal aid.
The William D. Ford Federal Direct Loan (Direct Loan) Program is the largest federal student loan program. Under this program, the U.S. Department of Education is your lender. There are four types of Direct Loans available:
- Direct Subsidized Loans are loans made to eligible undergraduate students who demonstrate financial need to help cover the costs of higher education at a college or career school.
- Direct Unsubsidized Loans are loans made to eligible undergraduate and graduate students, but in this case, the student does not have to demonstrate financial need to be eligible for the loan.
- Direct Plus Loans are loans made to graduate or professional students and parents of dependent undergraduate students to help pay for education expenses not covered by other financial aid.
- Direct Consolidatin Loans allow you to combine all of your eligible federal student loans into a single loan with a single loan servicer.
Applying for a Federal Direct Loan
You must complete the Free Application for Federal Student Aid (FAFSA). The financial aid office will determine your eligibility, and the amount you are eligible for will appear on your Financial Aid Award Letter. You can accept your loan by completing the Request for a Direct Federal Loan Form. You must fulfill certain conditions before loan funds can be credited to your account. These include, but may not be limited to:
- For First Time Borrowers - Completion of a Loan Entrance Interview – An Entrance Interview is actually a counseling session which is designed to help you better understand your obligation as a borrower and provides other useful information on the loan process. Entrance Interviews are required for all first time borrowers.
- Signing the Master Promissory Note – You must complete a Master Promissory Note (MPN) at https://studentloans.gov using your federal Personal Identification Number (PIN). The same PIN used to complete your online FAFSA is used to sign your MPN.
Federal Direct Student Loan Limits
The chart below lists the maximum annual subsidized and unsubsidized combine amounts a student may borrow in the Federal Direct Loan program. The annual maximum amount may be awarded to you as a combination of subsidized and unsubsidized. You must pay the interest on the portion that is unsubsidized while in school, and during any grace or in-school deferment periods, unless you elect to have the interest added to the principal. This is called capitalization. Having the interest capitalized will mean larger payments when you begin repayment.
Federal Loans |
Loan Details |
Annual Award Limits |
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Direct Subsidized Loan |
• For undergraduate students who are enrolled at least half-time* and demonstrate fi nancial need • Interest is 3.4% for loans made between July 1, 2012 and June 30, 2013 • Student is not charged interest on the loan while in school and during deferment periods • The U.S. Department of Education (ED) is the lender; payment is owed to ED
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Between $3,500 and $5,500 depending on year in school
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Direct Unsubsidized Loan |
• For undergraduate and graduate students who are enrolled at least half-time* • Interest is 6.8% • Student is responsible for interest during all periods • ED is the lender; payment is owed to ED
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Between $5,500 to $20,500 (minus any subsidized amount received for the same period) depending on year in school and dependency status
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Direct PLUS Loan for Parents |
• For parents of dependent students • Dependent students must be enrolled at least half-time* • Interest is 7.9% • Parent must not have negative credit history • Parent is responsible for interest during all periods • ED is the lender; payment is owed to ED
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Maximum amount is cost of attendance* minus any other fi nancial aid the student receives
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Direct PLUS Loan for Graduate or Professional Students |
• For graduate or professional degree students who are enrolled at least half-time* • If the student has not requested the annual maximum Unsubsidized Stafford Loan amount they are eligible for, the school must notify the student of this eligibility and give them the opportunity to request it • Student must not have negative credit history • Interest is 7.9% • Student is responsible for interest during all periods • ED is the lender; payment is owed to ED
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Maximum amount is cost of attendance* minus any other fi nancial aid the student receives
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Loan Repayment Plans
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Repayment Plan |
Eligible Loans |
Monthly Payment and Time Frame |
Quick Comparison |
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Payments are a fixed amount of at least $50 per month. Up to 10 years |
You'll pay less interest for your loan over time under this plan than you would under other plans. |
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Payments are lower at first and then increase, usually every two years. Up to 10 years |
You'll pay more for your loan over time than under the 10-year standard plan. |
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Payments may be fixed or graduated. 12-25 years |
For example, if you have $35,000 in outstanding FFEL Program loans, and $10,000 in Direct Loans, you can use the extended repayment plan for your FFEL Program loans, but not for your Direct Loans.
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Your maximum monthly payments will be 15 percent of discretionary income, the difference between your Adjusted Gross Income and 150% of the poverty guideline for your family size and state of residence (conditions apply). Up to 25 years. |
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Payments are calculated each year and are based on your annual income*, family size, and the total amount of your Direct Loans for up to 25 years. *If you are married, your spouse's income is included. |
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Up to 10 years |
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Borrower Grace Periods
After you graduate, leave school, or drop below half-time enrollment, you have a period of time before you have to begin repayment. This "grace period" will be
Six months for a Federal Stafford Loan (Direct Loan Program or Federal Family Education Loan (FFEL) Program).
PLUS Borrowers - The repayment period for a Direct PLUS Loan begins at the time the PLUS loan is fully disbursed, and the first payment is due within 60 days after the final disbursement. However, a graduate student PLUS Loan borrower (as well as a parent PLUS borrower who is also a student) can defer repayment while the borrower is enrolled at least half-time, and, for PLUS loans first disbursed on or after July 1, 2008, for an additional six months after the borrower is no longer enrolled at least half-time. Interest that accrues during these periods will be capitalized if not paid by the borrower during the deferment.
Parent PLUS Loan borrowers whose loans were first disbursed on or after July 1, 2008, may choose to have repayment deferred while the student for whom the parent borrowed is enrolled at least half-time and for an additional six months after that student is no longer enrolled at least half-time. Interest that accrues during these periods will be capitalized if not paid by the parent during the deferment.
Sample Loan Repayment
You can use the following chart as a reference to estimate your monthly loan repayment amount assuming that your borrow the Federal Direct Subsidized and Unsubsidized Stafford Loan for all 4 ½ years you are enrolled at Kettering University as a dependent student using the Standard Repayment Plan. You should use this as a reference only; for more specific repayment examples go to the U.S. Department of Education's Direct Loan Program
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Grace Period |
Repayment Term |
Interest Rate |
Principal Amount Borrowed |
Estimated Monthly Payment |
Estimated Total Principal & Interest Payment |
|
Federal Direct Subsidized Stafford Loan |
6 months |
10 years |
6.8% |
$21,750 |
$250.30 |
$30,036 |
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Federal Direct Unsubsidized Stafford Loan |
6 months |
10 years
|
6.8% |
$9,000 |
$103.57 |
$12428.40 |
