Banner Text


Federal Loans

Direct Student Loans (Subsidized and Unsubsidized)

Federal Direct Student Loans are long-term, low interest loans from the U.S. Department of Education.  These are the largest federal aid program and the programs you are most likely to find in your aid offer.  There are two types of Federal Direct Student Loans: subsidized and unsubsidized.  The primary difference is the point at which interest begins to accrue.  No interest will accrue on a subsidized loan and no principal will be due until the end of the 6-month grace period that will begin when you graduate, leave the university, or drop below half-time enrollment*. Your offer may include a subsidized loan if you have financial need. (*For undergraduate students half-time = 6 units per term.)

 

Interest on an unsubsidized loan begins on the day that the loan is disbursed and continues until the day that you repay the loan in full.  You can pay the accumulating interest while you are in school, during the grace period, or during deferment; or you have the option of capitalizing the interest (adding unpaid, accumulated interest to the total unsubsidized amount borrowed when you begin repayment). This may give you a way to postpone making interest payments, but it also increases the total cost of your unsubsidized loan.

 

Your offer may include a combination of subsidized and unsubsidized loans.  For example, a freshman with a subsidized loan of $500 may also receive an offer of an unsubsidized loan for $5,000 to meet the annual limit for a freshman.

Annual and Aggregate Loan Maximums

The maximum amount you can borrow per year depend on your FAFSA Dependency Status, and your grade level as determined by your earned course units.

ANNUAL DIRECT LOAN LIMITS

Grade Level

Earned Units

Maximum Subsidized Portion*

Additional Unsubsidized Portion
Total Direct Loans

Dependent Students:

Freshman

0-29

$3,500*

$2,000
$5,500

Sophomore

30-59

$4,500*

$2,000
$6,500

Junior

60-89

$5,500*

$2,000
$7,500
Senior
90+
$5,500*
$2,000
$7,500
Independent Students:

Freshman

0-29

$3,500*

$6,000
$9,500

Sophomore

30-59

$4,500*

$6,000
$10,500

Junior

60-89

$5,500*

$7,000
$12,500
Senior
90+
$5,500*
$7,000
$12,500

Graduate

N/A

N/A*

$20,500
$20,500

*Subsidized loans require financial need. Students without sufficient financial need can still borrow the same total loan Direct Loan amounts, but more or all of their loans will be Unsubsidized. Graduate students are only eligible for Unsubsidized Direct Loans.. 

The Federal Direct Student Loan Program also has aggregate (lifetime) limits:

AGGREGATE (Lifetime) DIRECT LOAN LIMITS

Students

Maximum Subsidized Portion

Additional Unsubsidized Portion

Total Direct Loans

Dependent Undergraduates

$23,000

$8,000

$31,000

Independent Undergraduates

$23,000

$34,500

$57,500

Graduate Students
N/A
N/A
$138,500*

*The graduate limit includes all undergraduate and graduate loans.

The Cost of Borrowing

Interest Rates

2014-15 rates will not be available until July at: www.studentloans.gov

The 2013-14 rates listed below applied to annual loans first disbursed between 7/1/2013 & 6/30/2014:

Loan Type

Undergraduate Students

Graduate Students

Direct Subsidized Loans

3.86%

N/A

Direct Unsubsidized Loans

3.86%

5.41%

Additional "Loan Fees"

In addition to the Interest costs, borrowers must also pay a loan fee that is deducted from each loan disbursement. For loans first disbursed on or after Dec. 1, 2013, the loan fee is 1.072%.

Entrance Loan Counseling

You will pay 1.0 percent of your Direct Student Loan proceeds to the U.S. Department of Education as a loan origination fee.  This fee will be deducted from each disbursement before it is credited to your university account. 

Entrance Loan Counseling

When you are a new borrower of a Federal Direct Student Loan at Towson University, you must complete an entrance loan counseling session so that you will know your rights and responsibilities as a borrower.  The on-line session will take you about 20 minutes to complete.

 

Promissory Note

Borrowing from the Direct Loan program requires the completion of an Electronic Master Promissory Note (e-MPN).  You can use the e-MPN to make one or more loans for one or more academic years while attending Towson University. 

 

Repayment

You will begin to repay your loan at the end of a 6-month grace that begins when you graduate, leave school, or drop below half-time enrollment (6 units).

Repayment Options

Borrowers have four repayment options:

  1. The Standard Repayment Plan allows you to repay your loan with a fixed monthly payment of no less than $50 over a period of no more than 10 years. See Appendix IV.
  2. The Extended Repayment Plan also has minimum payments of $50 per month, but allows you to take from 12 to 30 years to repay your loans.
  3. The Graduated Repayment Plan allows your payments to start out at one level, and then gradually increase every two years.
  4. The Income Contingent Repayment Plan gives you the flexibility to tie your payments to your Adjusted Gross Income.

 

You can estimate your monthly payments with various repayment plans by using the repayment calculators available online from the U.S. Department of Education’s Direct Loan Web site.

 

You may consider a Federal Direct Consolidation Loan to simplify repayment by combining loans from the Federal Direct Student Loan Program, the Federal Family Education Loan (FFEL) Program, and the Federal Perkins Loan Program.  (Towson University does not participate in the Federal FFEL Program.)

 

If you have questions about repayment or a problem making a payment on your loan, the Direct Loan Servicing Center (1-800-848-0979) will work with you to help you avoid the costs and adverse consequences of delinquency.  Deferment and forbearance are options that can help you manage the repayment of your loan.

 

 

Financial Aid Office
Enrollment Services, Room 339
Hours: Monday - Thursday, 8 a.m. - 5 p.m.; Friday, 8 a.m. - 4:30 p.m. (Reception Desk)
            Monday - Thursday, 8:30 a.m. - 5 p.m.; Friday, 8:30 a.m. - 4:30 p.m. (Financial Aid Call Center)

Phone: 410-704-4236
Fax: 410-704-2584
E-mail: finaid@towson.edu


 

 

 


 

Map

Emergencies
410-704-4444

University Police
410-704-2134

Closings & News
410-704-NEWS (6397)

Text Alerts
Sign up now