Federal subsidized loan

This is a federally financed and subsidized student loan made based on your financial need and other specific eligibility requirements. Undergraduate students may borrow up to the cost of attendance minus the expected family contribution and any other aid received. You may not borrow more than the maximum annual or aggregate amount. The federal government does not charge interest on these loans while you are enrolled at least half-time.

Changes in federal law have eliminated graduate student eligibility for subsidized loans. Graduate students may still be eligible for unsubsidized loans or a Grad PLUS. Loan limits remain the same, but interest begins accruing immediately on unsubsidized loans.

Beginning with Summer II 2012, the federal government will NOT pay the interest on your subsidized loan during the six months-grace period.

Contact information

• Direct Loan Servicing Center -- repayment information
  (800) 848-0979
  https://studentloans.gov
• Direct Loan Consolidation Center -- consolidation
  (800) 557-7392
• WMU Student Financial Aid Office
  269 387-6000
  finaid-info@wmich.edu

Description

• Federally funded

• Need-based -- File a FAFSA annually

• The fixed interest rate for loans in the deferment or six-month grace period is as follows:
  • 3.4 percent for loans disbursed July 1, 2012 - June 30, 2013
    • Graduate students are not eligible for subsidized loans beginning July 1, 2012.
    • The government does NOT pay your interest during the six-month grace period on new loans beginning July 1, 2012
  • 3.4 percent for undergraduate loans disbursed July 1, 2011 - June 30, 2012
  • 4.5 percent for undergraduate loans first disbursed July 1, 2010, and after
  • 6.8 percent for graduate loans disbursed July 1, 2006 - June 30, 2012
    • Graduate students are not eligible for subsidized loans beginning July 1, 2012.
• 1 percent origination fee; no interest rate rebate
• Subject to annual and aggregate loan limits
• This is a loan you must repay to the U.S. Department of Education
• Complete the student financial aid adjustment form if you wish to cancel or reduce a loan that has not been disbursed to your WMU account. If the loan has already disbursed, you must complete the student financial aid adjustment form within 30 days of the date of disbursement. Please note: canceling or reducing a disbursed loan may result in a balance due on your WMU account.
• After you have accepted your subsidized loan, you will receive a "Federal Direct Loan Disclosure Statement" from the Direct Loan Servicing Center or WMU. The disclosure statement identifies anticipated disbursement dates, gross and net disbursement amounts and loan fee amounts for all your federal direct loans for the academic year.

Eligibility

• Completed federal master promissory note (MPN) required for first-time borrowers
• Federal loan entrance counseling required for first-time borrowers at WMU
• Award eligibility based up EFC, cost of attendance, enrollment and other resources
• Award will be canceled if enrolled less than half-time
• Award may be adjusted or canceled if there is a change to EFC, cost of attendance, enrollment, graduating in August or December or if you receive additional resources
• Undergraduate, graduate student or teacher certification
• Must be enrolled at least half-time

Repayment

• Repayment deferred and interest waived while enrolled at least half-time
• You will begin to repay your loan six months after you cease to be enrolled at least half-time. During this six-month "grace period", interest will accrue on your loan. For sample repayment amounts, see the federal loan repayment fact sheet.
• Complete an exit counseling session so you are aware of all the information you will need to know about repaying your loan.
• If you drop to less than half-time, withdraw, drop out, graduate or simply do not return to school, this information will be reported to the loan servicer and they will begin to count your grace period. You are responsible for notifying WMU immediately if your enrollment changes as described above.
• Payments will be made to the U.S. Department of Education (holder of the loan)
• For detailed information about repayment, deferments, forbearance, forgiveness programs and other frequently asked questions, go to https://studentloans.gov/
• To obtain information about consolidating your federal loans, visit studentloans.gov or call 1-800-557-7392. The interest rate for a direct consolidation loan is the weighted average of the interest rates on the loans being consolidated and is fixed for the life of the loan.
• It is important that you maintain a "very important papers file" and keep copies of your award notices, MPN, borrower's rights and responsibilities and the direct loan disclosure statement in one place as they provide the details of your loans and your rights and responsibilities as a student loan recipient.

Updated: 04/15/2013 12:15 PM