Federal Direct Loans
Subsidized and unsubsidized loans are federal student loans for eligible students to help cover the costs of higher education at four-year college or university, community college, or trade, career or technical schools. The U.S. Department of Education offers eligible students at participating schools Direct Subsidized Loans and Direct Unsubsidized Loans. PHSC participates in the William D. Ford Federal Direct Loan Program. Financial aid awards in the form of loans must be repaid. For this reason, loans are considered to be "self-help" forms of assistance. Federal loans are not awarded automatically and must be requested by the student each academic year.
Direct Loan Eligibility Criteria
In order for a student to receive either type of loan, a student must be enrolled at least half-time (6 or more credit hours) at a school that participates in the Direct Loan program. Generally, students must also be enrolled in a program that leads to a degree or certificate awarded by the school. Direct Subsidized Loans are available only to undergraduate students who have financial need. Direct Unsubsidized Loans are available to both undergraduates and graduate or professional degree students. Students are not required to show financial need to receive a Direct Unsubsidized Loan.
Applying for a Federal Direct Loan
Students applying for Federal Direct Student Loans must complete the four steps listed below:
- Complete the Free Application for Federal Student Aid Application (FAFSA): Students must apply and be accepted for admission to PHSC as well as have a completed financial aid file before their loan application can be processed. Additional information may be required to complete the application.
- Complete Entrance Loan Counseling: Students must complete entrance counseling when they apply for their first Direct Loan. Students will need an FSA ID in order to log in and complete the entrance counseling process.
- Complete the Federal Direct Loan Master Promissory Note (MPN): The MPN is a binding legal documents. It must be electronically completed and signed in order for the student to receive Federal Direct Student Loan funds. All student borrowers must complete the MPN when they apply for their first Direct Loan. Students will need an FSA ID in order to log in and complete their MPN.
- Complete and submit the PHSC Direct Student Loan Request Statement (LRS).Federal loans are not awarded automatically and students must submit a loan request statement to their Financial Aid Office each academic year. All students who are requesting a Federal Student Loan must complete steps 1-3 before submitting the LRS form.
Federal Direct Student Loan Limits
PHSC reserves the right to deny or reduce loan requests as authorized by Section 682.603(c) C.F.R. of the Higher Education Act of 1965, as amended.
Increasing and Canceling Your Federal Student Loans
Students who need additional loan funds and continue to meet eligibility requirements may increase their loan amounts. Student must complete and submit an additional Loan Request Statement (LRS).
In order to reduce or cancel a loan once it has been originated, the student must submit a written and signed request to the Financial Aid Office. Requests to reduce or cancel a student loan must be received by the Financial Aid Office before funds are disbursed to the student's BankMobile Disbursement Card (BMD).
Using Loan Funds to Pay Tuition, Fees, and Books
Students who need to use their loan funds to pay their charges can request a deferment after their loans have been originated. Deferments will not be available to students who are on financial aid probation or suspension until grades from the previous semester are posted, confirming satisfactory academic progress has been met.
Students must also be enrolled at least half-time (6 or more credit hours) in courses required for their program of study to be approved for a loan deferment. Please contact the Financial Aid Office for more information on completing the loan deferment process.
Deferment of Federal Student Loan Repayment
Repayment of Federal Stafford Loans may be deferred up to 6 months (grace period) after graduation, withdrawal, or less than half-time enrollment.
When Loan Funds are Disbursed
After the student loan is originated, the student will receive a financial aid award letter showing the amount of the loan(s) and the anticipated loan disbursement dates. Loan funds will first be applied to any outstanding charges owed to the college and balance funds will be made available in accordance with the student's BankMobile Disbursement Card (BMD).
Helpful Loan Hints
- Only borrow what you really need for expenses.
- Remember, the more you borrow and the longer you are enrolled in college, the more loan balance you will have to repay.
- Be timely - complete your Loan Request Statement (LRS) early. Typically, students who have completed their financial aid application and have a completed file will have their loans originated soon after they submit their LRS.
- Be aware, outstanding loans you have received from previous institutions will be included when determining your aggregate loan eligibility limit.
- 150% Direct Subsidized Loan Limit for Subsidized Usage Limit Applies (SULA) means there is a limit on the maximum period of time that a student can receive Direct Subsidized Loans. In general, students may not receive Direct Subsidized Loans for more that 150% of the length of their program of study or maximum eligibility period. SULA applies to "first-time borrowers" on or after July 1, 2013. The Department of Education will determine whether borrowers are "first-time borrowers" for the purposes of the 150% limit.
- Use the Repayment Estimator to calculate your loan repayment timeline and options.
Direct PLUS Loans
PLUS loans are federal loan that graduate or professional student and parents of dependent undergraduate students can use to help pay for college or career school. Students applying for a PLUS Direct Loan must complete the steps below.
- Create a FSA ID to sign and complete the form.
- Complete the Master Promissory Note online.
- Complete and submit the PHSC Federal Direct Parent Loan Request Statement (LRS PLUS).
- Your loan cannot be originated until your LRS has been received by the Financial Aid Office.