UofL participates in the William D. Ford Direct Loan Program. In the Direct loan program eligible students and parents borrow directly from the federal government. Direct Loans include subsidized and unsubsidized Direct Stafford Loans, Direct PLUS Loans, and Direct Consolidation Loans. You repay these loans directly to the U.S. Department of Education. For more information about the Federal Direct Loan program please consult the federal student aid website, www.studentaid.ed.gov.
Students who have used their maximum eligibility from these programs may apply for an alternative student loan offered from a bank or lending institution.
Step By Step Instructions
Time Limitation on Direct Subsidized Loan Eligibility for First-Time Borrowers on or after July 1, 2013
If you are a first-time borrower on or after July 1, 2013, please familiarize yourself with the new federal regulations regarding a limit on the maximum period of time (measured in academic years) that you can receive Direct Subsidized Loans. In general, you may not receive Direct Subsidized Loans for more than 150% of the published length of your program of study. For more information, please review the U.S. Department of Education’s Federal Student Aid announcement concerning this time limitation.
Impact of Sequestration on the Federal Direct Loan Program (March 1, 2013)
On August 2, 2011, Congress passed the Budget Control Act of 2011, which put into place automatic federal budget cuts, known as a “sequester,” to take effect if Congress failed to enact legislation to reduce the Federal deficit by March 1, 2013. Because Congress did not act, these budget cuts are now in effect. While this law does not otherwise change the amount or terms or conditions of Direct Loans, it does raise the loan fee paid by borrowers for Direct Loans first disbursed on or after July 1, 2013.
· For a Direct Subsidized or Direct Unsubsidized Stafford Loan, the loan fee will increase from 1.0 percent to 1.051 percent. For example, the fee on a loan for $5,500 will be increased by $2.80 from $55.00 to $57.80.
· For Direct PLUS Loans for both parent and graduate student borrowers, the loan fee will increase from 4.0 percent of the principle amount of the loan to 4.204 percent. For example, the fee on a $10,000 Direct PLUS Loan will increase $20.40 from $400.00 to $420.40.
To allow time for system updates to be performed by the U.S. Department of Education, institutions may not submit Direct Loan records to the federal loan system, where the first disbursement will be on or after July 1, 2013, until June 28, 2013. In other words, the earliest date UofL can submit your 2013-2014 accepted loan amount to the federal government for processing is June 28, 2013. For 2013-2104 Graduate PLUS Loan applicants wanting to get an early credit decision, you may complete the PLUS Loan Request process at StudentLoans.gov on or after June 1, 2013. However, to apply for a Graduate PLUS Loan, you must follow the instructions outlined for Fall 2013 & Spring 2014 (https://louisville.edu/financialaid/loans/fall-2013-spring-2014.html).