Loan Programs


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  • Undergraduate Direct Loans

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

    There are two types of Federal Direct Loans--subsidized and unsubsidized.

    The Direct Subsidized Loan

    Eligibility for subsidized loans is based on financial need as determined by federal guidelines. A loan is called "subsidized" because the government pays interest for the student during:

    • At least half-time enrollment in school
    • The six-month grace period after the student ceases attendance on at least a half-time basis.

    The 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 of the Direct Loan

    • The interest rate is fixed at 6.8% for unsubsidized and 4.5% for subsidized Federal Direct loans.
    • 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 for Direct Loans

    Your Direct Loan eligibility is determined by the Office of Financial Aid 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

    How Much Can I Borrow?

    Borrowing limits are based on your dependency status and year in school. You are considered independent if you:

    • were born before January 1, 1988; or
    • will be working on a degree beyond a bachelor's degree during the school year; or
    • you are married when the Free Application for Federal Student Aid (FAFSA) is filled;
    • have children who receive more than half of their support from you; or
    • have dependents (other than your children or spouse ) who live with you and receive more than half of their support from you, now and through June 30, 2011; or
    • are an orphan or ward of the court or were a ward of the court until age 18; or
    • are a veteran of the U.S. Armed Forces

    If you do not meet any of the above criteria, you are considered a dependent student for financial aid purposes.

    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

    Federal Direct Loan limits are as follows:

    If dependent, your combined subsidized and unsubsidized Direct annual eligibility is as follows:

     

    DEPENDENT StudentFreshmanSophomoreJuniorSenior
    Maximum Subsidized$3,500$4,500$5,500$5,500
    Unsubsidized$2,000$2,000$2,000$2,000
    Total$5,500$6,500$6,500$7,500

    If independent, your subsidized and unsubsidized Direct annual eligibility is as follows:

     

    INDEPENDENT StudentFreshmanSophomoreJuniorSenior
    Maximum Subsidized$3,500$4,500$5,500$5,500
    Unsubsidized$6,000$6,000$7,000$7,000
    Total$9,500$10,500$12,500$12,500

     

    The cumulative maximum amount that may be borrowed as dependent undergraduate is $31,000 ($23,000 maximum subsidized) and for an independent is $57,500 ($23,000 maximum subsidized). 

    Sample Loan Repayment Disclosure information

     

    Interest Rate

    The interest rate is fixed at 6.8% for unsubsidized and 4.5% for subsidized Direct loans.

    Loan Fees

    For all Direct Subsidized Loans and Direct Unsubsidized Loans made between July 1, 2010 and June 30, 2011, the origination fee will be 1.00% of the principal loan amount.

    However, there is an automatic rebate amount equal to 0.50% of the principal loan amount. Therefore, the actual total up-front fee is only equal to 0.50% of the principal loan amount. The 0.50% fee is deducted from the principal at each disbursement.

    Example


     Loan Amount$2,000
     Total up-front fee (0.50%) -$10
     Amount disbursed Fall $995
     Amount disbursed Spring $995

     

    To retain the up-front interest rebate of 0.50%, a borrower must make the first twelve monthly payments on time.


    If all of the twelve monthly payments are not made on time, the rebate amount is added to the borrower's principal loan balance, which will increase the loan amount that must be repaid.

    The 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 http://fafsa.ed.gov.
    • 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 Financial Aid.
    • 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 Loan Entrance Counseling on the Web.
    • 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.

    Disbursements 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.