Federal Direct Student Loans
Overview of the Federal Direct Loan Process
The University of Georgia participates in the William D. Ford Federal Direct Loan Program which enables students who are enrolled half-time or more to borrow low interest money for educational expenses directly from the U.S. Department of Education. To be considered for a Federal Direct Loan, students must complete the appropriate year Free Application for Federal Student Aid (FAFSA) process.
We automatically offer Federal Direct Loans to all eligible students. If you decline a loan offer and subsequently wish to add the
loan back to your Award, you can request it by completing the Change In Aid Request.
Your Financial Aid Award in Athena will reflect the loan funds you have been offered and you will be instructed how to accept or decline the loan.
Before you accept a student loan we encourage you to visit the U.S. Department of Education website for more information on managing student loan debt repayment. UGA is proud of our low 3.2% cohort default rate which is well below the national average of 9.8%. Our rate indicates students are conservative in the indebtedness they incur at UGA and are able to manage their monthly payments after graduation.
Once you have accepted the Direct Loan(s) and if you have not previously borrowed that type of Federal Direct Loan while enrolled at UGA, you must complete additional Federal Direct Loan (FDL) Application Steps.
The National Student Loan Data System
As a consumer you need to be aware that the U.S. Department of Education will post your Federal Direct Loan data on the National Student Loan Data System (NSLDS) which is accessible by federal student loan guarantee agencies, lenders and institutions which the Department of Education has authorized access to this data system.
Information on Loans and State Grant Assistance
See www.studentloans.gov for additional information about student loans and other student aid programs including grant assistance from your state of legal residence.
The Three Types of Federal Direct Student Loans
The Federal Direct Subsidized Loan
- Only otherwise eligible undergraduate students my be awarded a Subsidized loan. The U.S. Department of Education pays the interest on the Subsidized Loan amount borrowed while the student remains in school at least half time and continues to be paid through the six month grace period.
- The maximum amount of annual Subsidized Loan for which an undergraduate is eligible is the lesser of the Statutory Annual Maximum for the student's Grade Level or his or her Estimated Financial Need (EFN) minus all other aid awarded from all sources.
The Federal Direct Unsubsidized Loan
- Both undergraduate and graduate/professional students may qualify for an Unsubsidized loan. Students are responsible for paying the interest on the Unsubsidized Loan from the time the loan is disbursed until it is fully re-paid. You can pay the interest while in school or allow the interest to accrue. Any accrued interest will be added to the principal balance of loan at the end of your loan grace, or deferment period (capitalized). See Origination Fee and Interest Rates below.
- The maximum amount of annual Unsubsidized Loan for which students are eligible is the lesser of the Statutory Annual Maximum for their Grade Level or their Cost of Attendance (COA) minus all other aid awarded from all sources.
Undergraduate Loan Grade Level
The Loan Grade Level for undergraduates is determined by the total number of semester hours earned at UGA plus any hours accepted in transfer.
Statutory Annual Loan Limits for Subsidized and Unsubsidized Loans for Undergraduates
|Level||Dependent Student||Independent Student|
|1||$5,500 (only $3,500 can be subsidized)||$9,500 (only $3,500 can be subsidized)|
|2||$6,500 (only $4,500 can be subsidized)||$10,500 (only $4,500 can be subsidized)|
|*3-4||$7,500 (only $5,500 can be subsidized)||$12,500 (only $5,500 can be subsidized)|
|**5||$5,500 (only $5,500 can be subsidized)||$12,500 (only $5,500 can be subsidized)|
For a single semester, your loan eligibility is no more than half the annual amount.
* Post-Baccalaureate students enrolled in an eligible second undergraduate degree are subject to the same annual maximum loan amounts as level 3-4 students.
** Post-Baccalaureate students pursuing preparatory coursework for enrollment in a graduate or professional program and students pursuing state-required teacher certification coursework are subject to the level 5 annual maximum loan limit.
Post-Baccalaureate students enrolled in preparatory coursework for enrollment in an undergraduate program cannot exceed $2,625 for dependent students and $8,625 for independent students.
Statutory Annual Limits for Unsubsidized Loans for Graduate and Professional Students
|Grad. School & Law||$20,500|
|Vet Med||$40,500 Fall & Spring
$47,167 Fall, Spring & Summer
|PharmD||$33,000 Fall & Spring
$37,167 Fall, Spring & Summer
Undergraduate, Graduate and Professional students should carefully note the annual loan amounts apply to the entire Award Year i.e. the Fall, Spring and Summer semesters. If you request or receive less than your annual loan maximum over Fall and Spring, you can subsequently request we award the balance of your annual loan maximum for the Summer Semester, if you are otherwise eligible. For example:
|Dependent 3rd Year Student
12 Month Maximum $7,500
Required Proration of Statutory Annual Loan Limits For Graduating Seniors
When students pursuing an undergraduate degree are awarded Subsidized and/or Unsubsidized Loans for one semester because they are graduating at the end of the awarded semester and they ultimately enroll in fewer than 15 hours, their one term Loan(s) must be prorated. The U. S. Department of Education regulations do not require proration when the graduating seniors are enrolled in at least 15 hours their graduating term.
The prorated Loan amount(s) is determined as follows:
|[ (number of hours in which the student is enrolled) x (the statutory annual loan limit) ] divided by 30 Hours|
For a single semester, the maximum loan eligibility is no more than half the annual amount.
Aggregate Loan Limits for Subsidized and Unsubsidized Loans
The total outstanding loan debt you can accrue from the federal student loan program is:
- $31,000 as a dependent undergraduate student. (Only $23,000 of this can be subsidized)
- $57,500 as an independent undergraduate student.
- $138,500 as a graduate or professional student . This debt limit includes any federal student loans received for undergraduate study.
- $224,000 as a VETMED or PHARMD student . This debt limit includes any federal student loans received for undergraduate study.
Subsidized Loan Eligibility Time Limitation (150% rule)
First-time borrowers [those who have no principal or interest balance on any Federal Direct Loan or Federal Family Education Loan (FFEL) on the date they receive a Federal Direct Loan on or after July 1, 2013] may not receive Direct Subsidized Loans for a period that exceeds 150% of the published length of the academic program in which they are currently enrolled. This length of time is also known as the "maximum eligibility period". For example, a first-time borrower in a 4-year program would have six years of Direct Subsidized Loan eligibility. Previous borrowers who still have a principal or interest balance on any Federal Direct Loan or Federal Family Education Loan (FFEL) as of July 1, 2013 are not subject to the 150% rule. For more information please go to https://studentloans.gov/myDirectLoan/directSubsidizedLoanTimeLimitation.action.
The loan Origination Fee is retained by the federal government to reduce the cost of supporting these low interest loans. The Origination Fee dollar amount is determined by multiplying the semester's gross loan award amount disbursed by the applicable Origination Fee percentage.
Federal Direct Subsidized and Unsubsidized Loan Origination Fee Percentages
The Origination Fee for Federal Direct Subsidized and Unsubsidized Loans is 1.073% for loans first disbursed on or after December 1, 2014 and before October 1, 2015. The Origination Fee will decrease to 1.068% for loans first disbursed on or after October 1, 2015 and before October 1, 2016.
Federal Direct PLUS Loan Origination Fee Percentages
The Origination Fee for Federal Direct Parent PLUS Loans and Graduate/Professional PLUS Loans is 4.292% for loans first disbursed on or after December 1, 2014 and before October 1, 2015. The Origination Fee will decrease to 4.272% for loans first disbursed on or after October 1, 2015 and before October 1, 2016.
Direct Loan Interest Rates
Federal Direct Student Loan interest rates for Loans with a first disbursement between July 1, 2016 and June 30, 2017 are as follows:
- Undergraduate Direct Subsidized & Unsubsidized Loans: 3.76%
- Graduate Direct Unsubsidized Loans: 5.31%
- Parent PLUS & Grad PLUS Loans: 6.31%
Federal Direct Student Loan interest rates for Loans with a first disbursement between July 1, 2015 and June 30, 2016 are as follows:
- Undergraduate Direct Subsidized & Unsubsidized Loans: 4.29%
- Graduate Direct Unsubsidized Loans: 5.84%
- Parent PLUS & Grad PLUS Loans: 6.84%
Per the Bipartisan Student Loan Certainty Act, interest rates will be established each year for Direct Subsidized, Direct Unsubsidized, and Direct PLUS loans for which the first disbursement is on or after July 1 through the following June 30. The rate will be the sum of a uniform "index rate" plus an "add-on" that varies depending on the type of loan (Subsidized/Unsubsidized or PLUS) and the borrower's grade level (undergraduate or graduate/professional). Thus, interest rates will be the same for Direct Subsidized Loans and Direct Unsubsidized Loans taken out by an undergraduate student, with a different rate for Direct Unsubsidized Loans taken out by a graduate/professional student and for PLUS Loans taken out by parent borrowers or graduate/professional student borrowers.
Under the law, the index rate is determined each year as the "high yield of the 10-year Treasury note" auctioned at the final auction held prior to the June 1 preceding the July 1 of the year for which the rate will be effective, plus a statutorily defined "add-on". As noted the add-on will differ depending on the type of loan and the student's grade level. Each loan type also has a maximum interest rate (or cap).
The interest rate for a loan, once established, will apply for the life of the loan - that is, the loan will be a fixed-rate loan. As a result, it is likely that many borrowers will have a set of fixed-rate loans, each with a different interest rate, including the 3.4% and/or 6.8% Direct Subsidized and Direct Unsubsidized loans made prior to July 1, 2013
Financial Awareness Counseling Tool
The Department of Education has made available the Financial Awareness Counseling Tool (FACT). FACT is an online interactive resource that provides students with basic financial literacy and information about their federal student loan debt. It can estimate your loan debt and repayment amounts and provides financial planning tips. For more information please go to https://studentloans.gov/myDirectLoan/whatYouNeed.action?page=counseling&accordian=finance.