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Federal Direct Subsidized and Unsubsidized Loans

General Information
Tulane participates in the Direct Loan Program. The federal government through the U.S. Department of Education is your lender for the Direct Loan Program. Federal Direct Subsidized and Unsubsidized Loans are offered to eligible students who are enrolled at least half-time (based on the standards for full-time in each division) and who meet all other eligibility criteria.

Eligible undergraduate students who have financial need may be offered a Direct Subsidized Loan, on which no interest will be charged before repayment begins (except during the grace period for loans made between July 1, 2012 and July 1, 2014) or during authorized periods of deferment. Interest is charged during the repayment period on a Direct Subsidized Loan.  Graduate-level students are ineligible, regardless of financial need, for a Direct Subsidized Loan for loans made on or after July 1, 2012.

Regardless of financial need, eligible students may qualify for a Direct Unsubsidized Loan. Interest on the Direct Unsubsidized Stafford Loan will begin to accrue when the loan is disbursed and be capitalized to the principal balance when the repayment period begins.

How can I get a Direct Loan?
Steps for getting Federal Direct Loans may be found by clicking here.

Receiving the Direct Subsidized or Unsubsidized Loan
Federal Direct loans for an academic year are generally disbursed in two equal installments. Typically, students who are enrolled for the standard academic year will receive their first disbursement in August and their second disbursement in January. Funds are automatically credited to student Tulane Accounts Receivable accounts after students confirm their registration for the semester and continue to meet all eligibility requirements. Students can check their student accounts on-line by following Accounts Receivable website instructions.

Annual and Aggregate Subsidized and Unsubsidized Direct Loan Limits 2013 - 2014
Each aid year, eligible students may borrow a combination of Subsidized and Unsubsidized Federal Direct Loans each year up to a base amount limit (or Cost of Attendance minus other aid, whichever is less) plus an additional Federal Unsubsidized Direct Loan amount (as long as Cost of Attendance minus other aid is not exceeded). Direct Loan eligibility will be packaged by the University Financial Aid Office.  Subsidized Direct Loans will additionally be limited to being 150% of an eligible student's credential program length for new borrowers on or after 7/1/13.  Graduate level students are no longer eligible to borrow new Subsidized Direct Loans.

For Tulane students enrolled as regular students in eligible programs, annual Subsidized and Unsubsidized Direct Loan limits for 2014-2015 are as follows:

Dependent Students Except Students Whose Parents are denied a PLUS Loan

Base amount

Additional unsubsidized loan amount


Freshman

$3,500

$2,000

Sophomore

$4,500

$2,000

Junior or senior

$5,500

$2,000


Independent Undergraduate Students and Undergraduate Dependent Students Whose Parents are denied a PLUS Loan

Base amount

Additional unsubsidized loan amount


Freshman

$3,500

$6,000

Sophomore

$4,500

$6,000

Junior or senior

$5,500

$7,000


Graduate and Professional Students other than Graduate Public Health


Unsubsidized loan amount

 

 

$20,500

Graduate Public Health Students

 

Unsubsidized loan amount

   

$33,000

Medical Students Pursuing an MD Degree


Unsubsidized loan amount

   

$40,500

Aggregate Loan Limits (Effective July 1, 2008)

Undergraduate Dependent Students (whose parents were not denied a PLUS loan) : $31,000 (no more than $23,000 of which can be subsidized)

Undergraduate Independent Students (and dependent students whose parents were denied a PLUS loan) : $57,500 (no more than $23,000 of which can be subsidized)

Graduate and Professional Students Other than Graduate Public Health Students: $138,500 (no more than $65,500 of which can be subsidized; NOTE:  graduate-level students will be ineligible for new Subsidized Loans as of July 1, 2012)

Medical Students Pursuing an MD Degree or Graduate Public Health Students : $224,000 (no more than $65,500 of which can be subsidized; NOTE:  graduate-level students will be ineligible for new Subsidized Loans as of July 1, 2012)

Fees on Subsidized and Unsubsidized Federal Direct Loans
An origination fee is deducted from the loan disbursement. The origination fee is currently 1.0% on Direct Subsidized or Unsubsidized Loans; HOWEVER, sequestration has caused fees to increase to 1.051% for loans disbursed on or after July 1, 2013, to 1.072% for loans first disbursed on or after December 1, 2013, and to 1.073% for loans first disbursed on or after October 1, 2014 (but before October 1, 2015).

Interest Rates for Direct Loans First Disbursed on or between July 1, 2014 and June 30, 2015 (these will be fixed-rate loans)*

Direct Subsidized Loans for undergraduate students: 4.66%
Direct Unsubsidized Loans for undergraduate students: 4.66%
Direct Unsubsidized Loans for graduate students: 6.21%

*Current law (The Bipartisan Student Loan Certainty Act of 2013) states that the interest rate will be based on the high yield of the 10-year Treasury note at the final auction held prior to June 1 preceding the July 1 of the year for which the rate will be effective, plus a statutorily defined "add-on," subject to an interest rate cap, and that the loan will be a fixed-rate loan.  The fixed interest rate for the next year will not be known until after the final auction occurs.

Repayment of the Federal Direct Loan
The six months after a student graduates, leaves school, or drops below half-time enrollment is called the "grace period". During the grace period, students will not have to make any payments on the outstanding principal balance, but will be charged interest (except for Subsidized Loans NOT first disbursed between 7/1/12 and 7/1/14). During the grace period, the servicer will send the student information about repayment, including the date repayment begins. Prepayment may be made on Federal Direct Loans without penalty. Students are responsible for beginning payment on time, regardless of if they receive this information. Students may discuss the following repayment plans with their servicer, including how often they may switch plans:

  • The Standard Repayment Plan requires a student to pay a fixed amount each month - at least $50.
  • A Graduated Repayment Plan allows a student's monthly payments to be lower at first and then increase over time. Each of the payments must at least equal the interest accrued on the loan between scheduled payments.
  • An Income Sensitive Repayment Plan bases a student's monthly payment on the student's yearly income and loan amount. As a student's income rises or falls, so does the monthly loan payments. Each of the payments must at least equal the interest accrued on the loan between scheduled payments.
  • The Extended Repayment Plan has been available to new borrowers who received their first loan on or after October 7, 1998 and who have Stafford Loan amounts totaling more than $30,000. The Extended Repayment Plan allows a student's payment to be fixed or graduated over a period of up to 25 years.
  • Income-Based Repayment (IBR) Program will cap monthly payments at a reasonable percentage of income for borrowers with heavy debt burden or low incomes, and forgive the remaining debt after 25 years (after 20 years for new borrowers as of July 1, 2012).  You can learn more about this program online at www.IBRinfo.org
  • "New- available July 1, 2009"- Public Loan Forgiveness Program (available only for Federal Direct loans).  If you are considering a career in public service, such as worker for the federal government, as a public school teacher, or for a nonprofit organization, you may qualify.  It forgives remaining federal student loan debt after 10 years of qualifying payments and employment.   You can learn more about this program online at www.IBRinfo.org
  • Income Contingent Repayment Program (only available for Federal Direct Loans) has less desirable terms than the IBR Program, but during consolidation processing, repayment of loans may be put into forbearance under this program.

Withdrawing from the University
If you decide to withdraw from Tulane after receiving a federal loan, please contact your Dean's office to discuss the withdrawal process. You should also visit the Tulane Financial Aid Office to discuss how withdrawing will affect your federal loan.  

Exit Counseling
Federal regulations require students who have borrowed a Federal Stafford Loan and are graduating, leaving school, or dropping below half-time enrollment to complete an exit counseling session. During this session, borrowers review the terms of the loan, borrower rights and responsibilities, and the consequences of default.

  • When a student Direct Loan borrower graduates or otherwise ceases enrollment, Direct Loan exit counseling is required.
  • Exit counseling may be completed by clicking here, or navigating to www.studentloans.gov, clicking "Exit Counseling" under "Tools and Resources," then clicking "Exit Counseling" once again.
  • For those students that do not have internet access, you can complete exit counseling in person by coming to the Office of Financial Aid on the second floor of the Science and Engineering Lab Complex (Building 14), Room 205. Law and Health Science students can complete this with their respective financial aid offices.

Note: The average federal student loan (Stafford and/or Perkins Loans) principal of a borrower who entered Tulane as a first-time full-time freshman and who graduated with a bachelor's degree from Tulane between 7/1/10 and 6/30/11 was $23,286.


History of Interest Rates
Please refer to the Federal Student Loan website for historical information on the interest rates of federal student loans.


Page last modified on February 25, 2015.

Citation information:

Page accessed: Monday, March 30, 2015
Page URL: http://tulane.edu/financialaid/loans/stafford.cfm

University Financial Aid, New Orleans, LA 70118 504-865-5723 finaid@tulane.edu