Federal Loans

Federal Direct Loan

Federal Direct Loans are low-interest loans from the U.S. Department of Education that are administered by Widener University. It is the U.S. Department of Education's major form of self-help aid and is available through the William D. Ford Federal Direct Loan Program.

There are two types of Federal Direct Loans: subsidized and unsubsidized. Because the funding for these loans comes straight from the U.S. Department of Education, you do not have to find a lender to borrow through these programs.

Federal Direct Subsidized Loan

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 6 months after the student graduates or ceases to be enrolled at least half time.

Federal Direct Unsubsidized Loan

A Federal Direct Unsubsidized Loan is not based on your financial need. 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. You are charged interest on this loan from the time the loan is disbursed until it is paid in full. You have the option to pay on the interest while in school, or to allow the interest to accumulate, which adds to the principal amount of the loan and increases the amount to be repaid.

Federal Direct Loan Interest and Fees. The interest rate in effect for 2012-2013 for Federal Direct Subsidized loans for undergraduate students is fixed at 6.8%.  The interest rate for Federal Direct Unsubsidized loans is also fixed at 6.8%. Subsidized loans do not accrue interest until loan repayment begins, whereas unsubsidized loans accrue interest from when the loan is disbursed.

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, it will be included 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 a Federal Direct Loan(Subsidized, Unsubsidized, Grad PLUS). Entrance Counseling 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.

Entrance Counseling can be completed at https://studentloans.gov.

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, although you may wish to 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.

Eligibility for Degree-seeking Students
Degree-seeking students who are enrolled at least half time may receive Federal Direct Loan funding as long as they meet the general eligibility requirements.

Borrowing Limits

Below is a chart of annual loan limits for Federal Direct Loans:

Year in School Subsidized/Unsubsidized
Base Amount a
Unsubsidized
Base Amount a
Additional Eligibility b
First Year
0 - 29 credits
$3,500 $2,000 $4,000
Second Year
30 -59 credits
$4,500 $2,000 $4,000
Third Year
60 - 89 credits
$5,500 $2,000 $5,000
Fourth Year
90 credits
$5,500 $2,000 $5,000 c

a For all students. The additional $2,000 in unsubsidized funding was new in 2008-2009.
b For independent students and for dependent students whose parents are rejected for PLUS Loans.
c Nondegree-seeking students who are enrolled at least half time in a teacher certification program or in coursework required to be accepted into a graduate or professional program may borrow at the senior level as a fifth-year undergraduate. Students who think they may qualify for this exception should contact Student Financial Services.

Federal Direct Loan Exit Counseling

The federal government requires that students participate in Exit Counseling prior to leaving or graduating from college.  You will need your U.S. Department of Education PIN to successfully complete Exit Counseling .

During Exit Counseling you will learn about additional deferment and forbearance options and how to get the necessary forms. The Exit Counseling process will help you set up a repayment plan, a direct withdrawal and a payment date. The National Student Loan Data System for Students handles Exit Counseling.  Exit Counseling can be completed at http://www.nslds.ed.gov.

Federal Direct Loan Repayment

Repayment of the Federal Direct Loan begins after the student graduates or ceases to be enrolled at least half time.  Visit our About Loans page for additional information on managing and repaying your federal education loans.

Additional Federal Direct Loan Information

Contact Federal Direct Loan Servicing Center at https://studentloans.gov/ or call them at (800) 848-0979, TTY (800) 848-0983.

Direct PLUS Loans

Federal Direct Parent Loan for Undergraduate Students (PLUS)
The Federal Direct PLUS loan enables parents with good credit histories to borrow funds to pay the educational expenses of each dependent undergraduate child enrolled at least half time. The yearly limit on a Direct PLUS is equal to the cost of attendance minus any other financial aid.

The Federal Direct PLUS has a fixed interest rate of 7.9 percent. A maximum origination fee of 4 percent will be deducted from each loan disbursement.  Parent borrowers can choose to defer payments on a Federal Direct PLUS loan until six months after the date the student ceases to be enrolled at least half-time.  Accruing interest could either be paid by the parent borrower monthly or quarterly, or be capitalized quarterly.  Payments on interest can be tax deductable and there are no penalties on paying off the loan early.

You can visit https://studentloans.gov for more information on Federal Direct PLUS loans and to apply.  You will need to indicate the amount you would like to borrow as part of the process. You can electronically sign your application with the same PIN number you use for the Free Application for Federal Student Aid (FAFSA) process.

Federal Perkins Loan

A Federal Perkins Loan is a need-based federal loan administered by Widener University. It is a subsidized loan, meaning that no interest accrues while you are in school. You also receive a nine-month grace period that starts as soon as you graduate, withdraw, or enroll less than half time at Widener. The Federal Perkins Loan carries a five percent interest rate and the minimum monthly payment will be at least $40.

If you are eligible for a Perkins Loan, you will be contacted by the Perkins Loan Office to schedule a Perkins Loan Entrance Interview and to sign your promissory note. Upon leaving Widener, you must attend an Exit Interview where your rights and responsibilities will be reviewed and you will receive further information on repayment. For more information, contact the Perkins Loan Office at 610-499-4172. 

The Perkins Loan Program is one of several federally funded sources of educational assistance available to Widener University students. The Perkins Loan is a low-interest (5 percent) loan with no origination fees, which is offered to both undergraduate and graduate students who demonstrate not only a high financial need but also meet and maintain federal and Widener University Financial Aid Eligibility Requirements. Due to limited funding, not all students who are eligible will receive this award. Students who are awarded a Perkins Loan are not automatically awarded it in subsequent years.

To determine whether or not you are eligible for a Perkins Loan you must first submit a Free Application for Federal Student Aid (FAFSA). Because this loan is made with government funds with a share contributed by Widener, the interest on the loan is paid by the federal government while the student remains enrolled at least half-time (6 or more credits, with the exception of summer).

Repayment Repayment of principal and interest begins nine (9) months from the last date of attendance (at least half-time enrollment). During this grace period, the borrower is not required to make payments and interest will not accue on the loan.

The borrower may repay all or any portion of the loan during the grace period without penalty. The total loan plus interest accrued is repayable in installments according to the borrower’s Truth-In-Lending Statement/Repayment Schedule. At the time of repayment a minimum monthly payment of $ 40.00 is due with a maximum of 10 years to repay the loan, unless consolidated.

Regular payments are due following the grace period even if the borrower has not received a bill or payment notice. Deferments/Cancellations Deferments A deferment is defined as “a temporary suspension of payment”. Payments on Federal Perkins Loans may be deferred for a variety of reasons.

During a deferment period, payments are not necessary since principal and sometimes interest does not acure. If you feel that you may be eligible for a defement, it is your responsibility to apply with our office. When to apply: If you are enrolled (half-time or more) in a higher educational program, are unemployed, experiencing economic hardship, temporarily unable to meet your repayment schedule or if you have become totally and permanently disabled.

How to apply: Contact Widener University Perkins Loan Office for a deferment request form. The request should be fully completed and may request you to include documentation to support your request. Other notes: In order to avoid late charges, you need to continue making your scheduled payments until you are notified that your deferment has been granted. Cancellations A cancellation (discharge) of your Perkins Loan is possible under certain circumstances and if granted, releases you from your obligation to repay all or a specified portion of your loan.

The majority of cancellations are discharged in twelve (12) month intervals while you are engaged in a specific service, or discharged in-full, in the event you pass away or become totally disabled. Once our office receives your applicaton for cancellation, your loan will be deferred until you complete a full twelve months of qualified service. Though your loan may be eligible for a cancellation, it is your responsibility to apply for each twelve (12) month period.

It is essentail to apply for cancellation in a timely manner. If you make a payment(s) during a period, then subsequently apply for cancellation that covers the same time period, the payment(s) will not be reimbursed. Most cancellations discharge your student loan over a period of five (5) years. Cancellation rates vary depending on the type of loan.

When to apply: If you expect to be eligible for any cancellation, you should apply for deferment of your account during your year of qualifying service/employment. This process delays billing until the end of the year, when your payments will be cancelled.

How to apply: Contact Widener University Perkins Loan Office for a cancellation request form.

Other notes: A form must be submitted at the beginning of the year of service/employment to defer payments while eligible service is performed. A form must be submitted upon completion of the year to receive partial cancellation.

All forms must cover a complete year; partial years do not qualify you for cancellation.

In you changed employers during the year, you must submit a cancellation form for each employer. In addition, there may be no breaks between periods of employment.

All Deferment/Cancellation forms are available on Campus Cruiser at http://Widener.edu/BursarOffice. Please refer to the section for: Perkins Loan Office Forms.