Federal Direct Loans

The Federal Direct Loan is available through the Federal Direct Loan Program to help UMMC's undergraduate and graduate students pay for their education.

There is only one type of Federal Direct Loan available to Graduate level students - unsubsidized.  Federal Subsidized Loans are only available to Undergraduate students.

Direct Subsidized Loan

This loan is available to students whom demonstrate financial need. With an subsidized loan, interest does not accrue during in-school, grace and deferment periods. 

*Note: If you received a Direct Subsidized Loan that was first disbursed between July 1, 2012, and July 1, 2014, you will be responsible for paying any interest that accrues during your grace period. If you choose not to pay the interest that accrues during your grace period, the interest will be added to your principal balance.

Direct Unsubsidized Loan

This loan is available to students regardless of income or need. With an unsubsidized loan, you are responsible for all interest that accrues during in-school, grace and deferment periods. You may choose to pay the interest portion only while in school, which would keep your loan balance at principal. If you choose to defer such payments, the interest will be capitalized, resulting in an increase in both total debt and the amount of monthly payments.

Advantages

• For the most current interest rates for federal direct loans visit studentaid.gov 
• It carries low origination fees. Many other loans have significantly higher fees.
• Repayment of the loan does not begin until you graduate or drop below half-time status.
• In cases of economic hardship, payments may be deferred, extended, or reduced.
• The loan is forgiven in case of permanent disability or death.

Loans are usually issued for a single academic year, and both eligibility and amount are redetermined annually throughout your academic career.

Eligibility

Your Direct Loan eligibility is determined by the Office of Student Financial Services and is based on information you provided in the Free Application for Federal Student Aid (FAFSA).

Federal criteria include:

• Enrollment in an eligible school at least half-time in a degree program
• U.S. citizenship, permanent residency, or eligible noncitizen status
• Satisfactory academic progress (as determined by the Office of Financial Aid)
• No unresolved defaults or overpayments owed on Title IV educational loans and grants
• Satisfaction of all Selective Service Act requirements

Borrowing limits

Borrowing limits are based on your dependency status and year in school. You are considered independent if you will be working on a degree beyond a bachelor's degree during the school year.

You can never borrow more than the cost of education, less other financial aid received (special rules apply for recipients of Montgomery Chapter 30 VA benefits and Americorps benefits). Below are the maximum amounts you may borrow.

As a graduate student, your subsidized and unsubsidized Direct Loan annual eligibility is as follows:

Graduate/Professional Students can borrow a maximum total of $138,500. Medical and Dental students may borrow a maximum of $224,000 . These loan limits include all loans borrowed as an undergraduate.  

Sample loan repayment disclosure information

Interest rates

The interest rate varies depending on the loan type and (for most types of federal student loans) the first disbursement date of the loan.  Studentaid.gov provides updated info on interest rates for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans.

Loan fees

Most federal student loans have loan fees that are a percentage of the total loan amount. The loan fee is deducted proportionately from each loan disbursement you receive while enrolled in school. This means the money you receive will be less than the amount you actually borrow. You’re responsible for repaying the entire amount you borrowed and not just the amount you received.

Studentaid.gov has the most updated info on the current loan fee rates.

Application process

Here's a step-by-step guide to the Stafford application process:

• Complete a Free Application for Federal Student Aid (FAFSA) application online at the Department of Education's website .
• Once your FAFSA is processed, you will receive a Student Aid Report (SAR) documenting your financial resources and expected family contribution towards educational costs. An electronic copy will be sent to the Office of Financial Aid of the school listed on your application. The University of Mississippi's school code is 004688.
• Check your SAR for accuracy. If there are errors, follow the correction process indicated on the SAR or as instructed by the Office of Student Financial Services.
• From the information obtained in the SAR and other supporting documents, we will generate an online Financial Aid Award Notification documenting the financial aid available to you including Federal Direct Loan eligibility.
• The student may accept all or a part of the aid by accepting and confirming the Financial Aid Award Notification online.
• The student must complete the online Loan Entrance Counseling.
• Once the Financial Aid Award Notification has been accepted and submitted and Loan Entrance Counseling has been completed, you may sign your school-certified Federal Direct Loan application/Promissory Note online. You will need to e-sign a new Master Promissory Note for the Federal Direct Program.
• You will receive a Notice of Guarantee and Disclosure Statement. This is your notice of loan approval, and it contains essential information about the terms and conditions of your loan. It also tells you the amount of your loan and an estimated date for the arrival of funds.

Disbursement of funds

An Electronic Funds Transfer (EFT) will be sent directly to our school. The amount of the proceeds will be the loan amount less the fees. Funds will credit first to your tuition bill and any excess funds will be mailed to your permanent address or directly deposited to your personal account.