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Federal Direct Subsidized and Unsubsidized Loan Program


Applying for a Federal Direct Loan

Loans through this government sponsored loan program are in the student’s name and do not require a co-signer or credit check.

Subsidized loans are awarded to students with financial need. The 2013–14 interest rate is fixed at 3.86%. The government pays the interest while the student is enrolled at least half-time.

Unsubsidized loans are awarded to students who do not have financial need. The interest rate is fixed at 3.86%. Interest on unsubsidized loans does accrue during the in-school period.

Subsidized Federal Direct Loans (interest rates by year of borrowing):
July 1, 2010 – June 30, 2011 – 4.5%
July 1, 2011 – June 30, 2012 – 3.4%
July 1, 2012 – June 30, 2013 – 3.4 %
July 1, 2013 - June 30, 2014 - 3.86%
Unsubsidized Federal Direct Loans (constant interest rate): 3.86%

*Subsidized and Unsubsidzed Federal Student Loans are subject to a 1.051% orgination fee.  Any loan with its first disbursement after 12/1/13 will be subject to the new origination fee of 1.072%.

Note: If a student’s parent is unable to obtain a PLUS loan, the student may qualify for additional unsubsidized Federal Direct Loans. At the first-year and sophomore levels, the student may borrow to a maximum of $4,000 in additional funds each year. During the junior and senior years the amount increases to $5,000 per year.

The repayment period for all Direct Loans (both subsidized and unsubsidized) is 10 years. Each loan has a grace period of 6 months after leaving SU.

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Obtaining a Direct Loan, Step-By-Step

Step 1: Complete your Entrance Counseling online: First time borrowers must complete Entrance Counseling prior to applying for the Federal Direct Loan. Visit www.studentloans.gov. Click the green “Sign-In,” (you will need your 4-digit federal PIN to access this area) and then click on “Entrance Counseling Session.” Your results will be sent to Susquehanna electronically. (Parents should not complete the session on behalf of their students, as this is a federal requirement designed to benefit each student’s understanding of his/her rights and responsibilities.)

Note: If you previously borrowed under our Federal Stafford Loan process, you do not need to complete Entrance counseling again. However, if you would like a refresher, please visit www.studentloans.gov and select “Complete Entrance Counseling”.

Step 2: Complete your Master Promissory Note (MPN) online: Borrowers must complete the Master Promissory Note (MPN) at www.studentloans.gov. (We recommend using Internet Explorer 7). If you are continuing your application after completing the Entrance Counseling Session you will not need to “sign in” for a second time. Simply proceed to the ‘Master Promissory Note’ section.

• Click the green 'Sign In' button under 'Manage My Direct Loan’. You will need to have your Department of Education issued 4-digit PIN to login. If you do not have your PIN, please visit the official PIN website at www.pin.ed.gov to request a new PIN.
• Enter your Social Security number, first two letters of your last name, date of birth, and PIN. Then click 'Sign In'.
• From the left menu bar, select 'Complete MPN' under 'Master Promissory Note'.
• Provide all requested information.

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Federal Direct Loan Repayment Chart

For loans borrowed in 2013-2014

Loan Amount Number of Payments Monthly Payment at 3.86% (13-14 year) Monthly Payment at 3.4% interest (12-13 year) Monthly Payment at 6.8% interest
$3,500 90 $50 $50 $50
$4,500 120 $50 $50 $52
$5,500 120 $55 $54 $63
$8,000 120 $80 $79 $92
$10,000 120 $101 $98 $115
$25,000 120 $251 $246 $288

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Direct Loan Interest Rates

Year Interest Rate
SubsidizedStafford Loans (Undergraduate Students)
Interest Rate
Unsubsidized Stafford Loans
2008–09 6.0% 6.8%
2009–10 5.6% 6.8%
2010–11 4.5% 6.8%
2011–12 3.4% 6.8%
2012–13 3.4% 6.8%
2013-14                               3.86% 3.86%

 

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