Federal Direct Loans
Federal Direct Loans, available through the William D. Ford Federal Direct Loan Program, are low-interest loans from the U.S. Department of Education that are administered by Widener University. Because the funding for these loans comes directly from the U.S. Department of Education, you do not have to find a lender.
There are two kinds of Federal Direct Loans:
- Federal Direct Subsidized Loans.
A Federal Direct Subsidized Loan is available to help meet financial need after other resources are subtracted or to the annual maximum loan limit, whichever is lower. Interest begins to accrue for the student six months after the student graduates or ceases to be enrolled at least half-time. Federal Direct Subsidized loans do not accrue interest until loan repayment begins.
- Federal Direct Unsubsidized Loans.
If your estimated cost of attendance is greater than your financial aid and you have not reached your annual maximum loan limit through the federal Direct Subsidized Loan, you may qualify for Federal Direct Unsubsidized Loan. A Federal Direct Unsubsidized Loan is not based on your financial need. Federal Direct Unsubsidized Loans accrue interest from when the loan is disbursed.
For 2012-2013, both Federal Direct Subsidized and Federal Direct Unsubsidized loans for undergraduate students is fixed at 6.8%.
Your options for repayment are:
- Pay the interest while in school.
- Let the interest accumulate, which adds to the principal amount of the loan, while increasing the amount to be repaid.
You are charged interest on Federal Direct Loans from the time the loan is disbursed until it is paid in full. In addition to interest, all Federal Direct Loans have a 1.0% origination fee. This fee reduces the amount that disburses to your student account.
How to Apply for a Federal Direct Loan (Subsidized or Unsubsidized)
To apply for a Federal Direct Loan, you must complete the FAFSA. To be eligible, you must be enrolled at least half-time and meet other general federal student aid eligibility requirements. If you qualify for a Federal Direct Loan, you'll be notified in your financial aid award letter.
E-sign the Federal Direct Loan Master Promissory Note (MPN)
Students borrowing a Federal Direct Loan must complete a Federal Direct Loan Electronic Master Promissory Note (MPN) before loan money can be disbursed. Once a Federal Direct Loan MPN is completed and the loan is disbursed to you by Widener University, you do not have to sign Federal Loan MPN again (it is valid for 10 years).
To complete the MPN, you must go to: https://studentloans.gov/ . You will need your U.S. Department of Education PIN to sign your MPN electronically.
The PIN is the same one used to sign your FAFSA.
After you sign your MPN , electronic notification will be sent to Widener University. Widener may not disburse your Federal Direct Loan unless you have completed your MPN and have completed Entrance Counseling.
Federal Direct Loan Entrance Counseling
The federal government requires a student to participate in loan counseling prior to receiving any federal direct loan. Entrance counseling, which can be completed at https://studentloans.gov, will explain various aspects of student loans, such as repayment and interest, and your rights and responsibility. It concludes with a 15-question quiz. You must get all answers correct to successfully complete entrance counseling .
You will need your U.S. Department of Education PIN to successfully complete Entrance Counseling. After you complete entrance counseling, the results will be sent electronically to Widener University. You may, however, print a copy of the rights and responsibilities page for personal records.
Receiving Federal Direct Loan Funds
When Widener University is notified by the Federal Direct Loan Processor that they have a valid MPN on file for you and you have completed Entrance Counseling , your Federal Direct Loan will automatically be credited to your student account as long as all other federal student aid eligibility requirements are met.
Request Reduction or Cancellation of Federal Direct Loans
You have the right to reduce or cancel your Federal Direct Loan offer. You may do so by making a notation on your Financial Aid Award Letter and returning it to the Office of Student Financial Services.
Federal Direct Loan Limits
The federal government sets limits on the amount of money a student can borrow. Widener University awards students that have filed the FAFSA the maximum amount eligible under such limits.
The annual limit applies to the most a student can borrow in one academic year, while the aggregate limit applies to the maximum a student can borrow in a lifetime. Independent students and dependent students whose parents are unable to borrow a PLUS loan are eligible for additional Federal Direct Unsubsidized Loan.