Federal Direct Loans at a glance

female student standing near table

A student’s award letter may include a Federal Subsidized Direct Loan and/or a Federal Unsubsidized Direct Loan.

Each Direct Loan may be subject to an origination fee and a Federal Default fee. Repayment commences six months after the borrower is not enrolled at least half-time. Only one grace period is allowed. At the time of disbursement, enrollment must be at least half-time (6 credits or more) for all loan awards. Students are encouraged to utilize all available Federal and State financial aid resources before turning to an outside lender for a private education loan.

First-Time Direct Loan Borrowers First-time, first-year loan borrowers are required to be in school 30 days before receiving their first loan disbursement.

Subsidized: Subsidized loans are borrowed money that must be repaid with interest; however, the U.S. Department of Education will pay the interest on your behalf while you are in school and during authorized periods of deferment. Subsidized loan interest is fixed annually. Yearly Loan Limits: First year $3,500; second year $4,500. Subsidized loan eligibility is limited to 150 percent of the published timeframe of the program in which a student is enrolled. Students who have exceeded this timeframe (at Moraine Park or at previous institutions) may no longer be eligible for subsidized student loans.

Unsubsidized: Unsubsidized loans are borrowed money. You are responsible for paying the interest from the date of disbursement until the loan is paid in full. If you choose not to pay the interest on the unsubsidized loan while you are in school, the interest will accrue from the time of disbursement. Interest can be paid periodically or can accrue and will be capitalized (added to the principal amount of the loan). Unsubsidized interest is fixed annually.

Interest rates for Direct Loans (both Subsidized and Unsubsidized) for 2016-2017 have been set at 3.76%.  You can find more information on Federal Direct Loans at www.studentloans.gov.

Written by Julie Waldvogel-Leitner
Director of Admissions