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Federal Direct Subsidized and Unsubsidized Loans for Students
2015-2016 PARENT PLUS AND GRAD PLUS APPLICATIONS FOR MU WILL OPEN WITH THE DEPT OF ED ON JUNE 15, 2015 AT WWW.STUDENTLOANS.GOV.
Methodist University participates in the William D. Ford Federal Direct Student Loan Program (Federal Direct Loans) for the processing of the Federal Direct Subsidized and Unsubsidized loans. These are low-interest loans for eligible students to help cover the cost of higher education. In the William D. Ford Federal Direct Loan program, loan proceeds are provided directly from the U.S. Department of Education. As with all federal student aid, to become eligible you must complete the Free Application for Federal Student Aid (FAFSA), the borrower must be a U.S. citizen or eligible non-citizen as defined by the FAFSA, the student borrower must be a U.S. citizen or eligible non-citizen as defined by the FAFSA, enrolled or accepted for enrollment in a degree program on at least a half-time basis as an undergraduate (6 semester hours) or graduate student (3 semester hours), have not met their aggregate loan limit, must not be in default on any federal education loans or owe an overpayment on a federal education, and the borrower must also maintain Methodist University's Satisfactory Academic Progress (SAP) for Financial Aid Eligibility. A student must sign for the loan and complete all required documentation prior to the end of the student's current academic year enrollment, (per federal guideline 34 CFR 668.164(g)(2)(ii)). Any missing documents can be found on the student's myMu Portal.
Direct Loan Subsidized Loan Time Limitation
There are two types of Federal Direct Loans offered at Methodist University:
Borrowing limits depend on class standing and academic level, and vary for undergraduates, graduate and professional students.
Loan Borrowing Limits
* Effective July 1, 2012: The Budget Control Act (BCA) of 2011 (Pub. L. 112-25)
Independent Undergraduate: $57,500 (Maximum $23,000 in Subsidized)
Graduate or Professional: $138,500 (Maximum $65,500 in Subsidized)
Direct Loan Interest Rate and Origination Fee
See the Federal Student Aid Web site for interest rates.
Applying for a Federal Direct Loan (Student)
Please note: When the loan(s) have been processed, you will receive an updated award letter from MU listing your loan has been PROCESSED. Once the loan is processed/booked, the loan is assigned a Loan Servicer on behalf of the Department of Education. For a complete listing of Loan Servicers, please visit www.studentloans.gov and choose Loan Servicers at the bottom right. For additional information regarding interest rates, repayment etc for Federal Direct Sub/Unsub, Parent/Graduate PLUS, please contact the Direct Loan Servicing Center at 1-800-848-0979.
The Federal Direct Loan award is issued in multiple disbursements during the academic year. If the borrower plans to enroll for:
Loan Cancellation/ Reinstatement
A student or parent borrower may cancel or reduce a loan anytime before a loan has disbursed to Methodist University. If the loan has already been disbursed and credited to the student’s account in the Business Office, the borrower may cancel a loan within 30 days from the date it disbursed and credited to the student’s Business Office account. A student may reinstate a Federal Direct subsidized (sub) and unsubsidized (unsub) loan at any time prior to the end of the student’s current academic year enrollment. The Federal Parent PLUS for Parents/Graduate students and Alternative Loans MAY NOT be reinstated once reduced or cancelled. Instead, the borrower must reapply online. To reinstate,reduce, or cancel a loan, the borrower must complete the Loan Revision Form. Important Notice: Canceling any loan disbursement could result in a balance to be due on the student's account in the Business Office which the student will be responsible for paying.
Borrowers cannot cancel a loan disbursement if the designated time period described above has already passed. Instead, the borrower can repay the loan disbursement directly by contacting the loan holder which can be found by accessing www.nslds.ed.gov. The borrower will be responsible for any interest that may have accrued and/or any loan fees.
Enrolled for less than 6 Semester Hours, Withdrawing or Graduating From MU: Loan Exit Counseling
Federal regulations require students who have borrowed a Federal Direct Loan and are graduating, leaving school, or dropping below half-time enrollment to complete an Exit Counseling. During the Exit Counseling, the student borrower will review rights and responsibilities as a student borrower, important information about repaying student loans, consolidation, repayment options, discharge and forgiveness as well as useful information to help manage student loans during repayment. Students must complete the Exit Counseling at www.studentloans.gov.
When you graduate, drop below half time, or withdraw from your academic program, you will receive a six-month grace period for your Direct Subsidized and Unsubsidized Loans. Your grace period begins the day after you stop attending school on at least a half-time basis. Once your grace period ends, you must begin repaying your loan(s). If you re-enroll in school at least half time before the end of your 6-month grace period, you will receive the full 6-month grace period when you stop attending school or drop below half-time enrollment. Please visit the Department of Education’s Federal Student Aid website for additional loan repayment information or to use the loan repayment calculator.
If a borrower disputes the terms of the Federal Direct Loan in writing and the holder of the loan is unable to resolve the dispute, a borrower may seek the assistance of the Office of Education's Student Loan Ombudsman. The Student Loan Ombudsman will review and attempt to informally resolve dispute and may be reached at 1-877-557-2575 or www.ombudsman.ed.gov
A Direct Consolidation Loan Program is available that allows a borrower to consolidate (combine) one or more of the eligible federal education loans into one loan. For more details and information, go to www.loanconsolidation.ed.gov.