With Direct Loans (PDF), the lender is the United States Department of Education (DOE). You borrow directly from the DOE to help cover your educational expenses. These loans offer low-interest rates and you don't have to begin paying the DOE back until after you graduate or withdraw from classes.
Types of Direct Loans
Maximum Loan Amounts
Applying for a Direct Loan
Direct Loan Exit Counseling
Types of Direct Loans
Depending upon your level of financial need, you may be offered one of two types of Direct Loans:
Federal Direct Subsidized Loan
With the subsidized loan, the federal government pays the interest on your loan while you are enrolled at least half-time and for six months after you graduate or withdraw from classes. Once the six-month grace period is over, you begin paying the interest and principal on your loan. Effective July 1, 2012 for the 2012-2013 academic year, the federal government will no longer pay the interest on your Federal Direct Subsidized Loan after you graduate with an undergraduate degree.
- Who is eligible? Students who demonstrate financial need
- Interest rate? Fixed at 3.4 percent for the 2011-2012 academic year and fixed at 6.8 percent for the 2012-2013 academic year
- Other fees? 1.0 percent origination fee
- Up-front interest rebate? 0.5 percent for the 2011-2012 academic year and not available for the 2012-2013 academic year
- Minimum monthly repayment? $50 (can be more depending on full amount borrowed)
Federal Direct Unsubsidized Loan
With the unsubsidized loan, you are responsible for paying the interest on your loan. The federal government does not pay the interest as with a subsidized loan. You may begin paying the interest while you are still in school or add the interest to the total amount of your loan (capitalization), which you will begin repaying after you leave school, graduate, or withdraw from classes.
- Who is eligible? Students who do not qualify for a Federal Direct Subsidized Loan
- Interest rate? Fixed at 6.8 percent
- Other fees? 1.0 percent origination fee
- Up-front interest rebate? 0.5 percent for the 2011-2012 academic year and not available for the 2012-2013 academic year
- Minimum monthly repayment? $50 (can be more depending on full amount borrowed)
Independent students, graduate students, and any dependent undergraduates whose parents are denied a Federal Direct Parent Loan for Undergraduate Students (PLUS) due to unsatisfactory credit are automatically eligible for an additional Federal Unsubsidized Direct Loan. First- and second-year students are eligible for an additional $6,000 and third- and fourth-year students are eligible for an additional $7,000 if the Direct PLUS Loan is denied. This unsubsidized loan amount is in addition to the base loan limits for the Federal Subsidized and Unsubsidized Direct Loan programs listed below.
Maximum Loan Amounts
Under Federal Direct Subsidized and Unsubsidized Loans, the maximum loan amounts students may borrow per year are as follows:
|
Base Amount
|
Additional Unsubsidized (Dependent Students EXCEPT students whose parents are denied a PLUS) |
Additional Unsubsidized (Independent Students and Dependent Students whose parents are denied a PLUS) |
|
|
First-Year: |
$ 3,500 |
$ 2,000 |
$ 6,000 |
|
Second-Year: |
$ 4,500 |
$ 2,000 |
$ 6,000 |
|
Third-Year: |
$ 5,500 |
$ 2,000 |
$ 7,000 |
|
Fourth-Year: |
$ 5,500 |
$ 2,000 |
$ 7,000 |
|
Fifth-year Seniors: |
$ 5,500 |
$ 2,000 |
$ 7,000 |
|
Graduate Students: |
$ 8,500 |
n/a |
$ 12,000 |
Applying for a Direct Loan
When you apply for financial aid, you'll automatically be considered for one of these loans.
To apply for a Direct Loan at Harvey Mudd College, you must complete a Direct Loan Entrance Counseling Session and submit a completed Electronic Master Promissory Note (EMPN) prior to receiving your first loan disbursement at StudentLoans.gov before funds can be credited to your student account.
- Complete the Direct Loan Entrance Counseling. You will need to sign in at StudentLoans.gov using your Social Security Number, Last Name (First Two Letters), Date of Birth (mo/day/yr), and FAFSA PIN.
- The Office of Financial Aid will receive confirmation that the Entrance Counseling Session has been completed electronically.
- Complete the Direct Loan Electronic Master Promissory Note (EMPN)
- The Office of Financial Aid will electronically receive confirmation that the EMPN has been completed.
- Loan information is electronically transmitted to the U.S. Department of Education by the Office of Financial Aid.
- U.S. Department of Education will send disclosure information to you.
After you completed your EMPN online, you will not need to submit another application for additional Direct Loans that you borrow while attending Harvey Mudd College. You will be able to accept or decline subsequent Direct Loan offers by signing your Financial Aid Award Letter or by emailing us at financial_aid@hmc.edu using your HMC email address. Subsequent loan offers will be processed using the same EMPN that you sign this year. This process eliminates the need for you to complete a new loan application and promissory note each year that you are enrolled.
Direct Loan Exit Counseling
If you have previously borrowed through the Federal Direct Loans and will be graduating, taking a leave of absence, or withdrawing from Harvey Mudd College, federal regulations require you to complete the Exit Counseling Session.
Last Updated: November 2011
Copyright 2012 Harvey Mudd College