Federal Direct Loans are low-interest loans from the U.S. Department of Education for students that are enrolled at least half-time and are administered by Catholic University. Undergraduate students are considered to be at least half-time once enrolled in 6 or more credits. It is the U.S. Department of Education's major form of self-help aid and is available through the William D. Ford Federal Direct Loan Program. There are two types of Federal Direct Loans: subsidized and unsubsidized. The primary difference between the two loans is the point at which interest begins to accrue:
- Subsidized Loan interest is paid by the federal government while the student is enrolled. Interest begins to accrue and the student's six-month grace period begins when the student borrower graduates, ceases to be enrolled or drops below half-time enrollment.
- Unsubsidized loan interest begins to accrue at the time of disbursement. Borrowers can pay the accumulating interest while in school or may capitalize the interest.
Your financial aid package may include a combination of subsidized and unsubsidized loans. All Federal Direct Student Loans are disbursed in two equal portions, half in the fall and half in the spring. A student must be enrolled at least half time while meeting all basic eligibility requirements (including Satisfactory Academic Progress) in order to receive a Federal Direct Student Loan. You will begin to repay your loan at the end of a six-month grace period that begins once you graduate, leave school or drop below half-time enrollment.
For each award you fail to Accept or Decline, we may automatically decline the award to adhere to federal regulations. Late acceptance must be submitted at least 2 weeks prior to the end of the semester.
Loan Eligibility
In order to qualify to receive direct student loans, a student must be enrolled and attending class for a minimum number of credits defined as at least half-time:
| Fall | Spring | Summer | |
|---|---|---|---|
| Undergraduate | 6 | 6 | 6 |
| Graduate, Doctorate | 4 | 4 | 4 |
Direct Loan Fixed Interest Rates 2024-2025:
| Subsidized | Unsubsidized* | |
|---|---|---|
| Undergraduate | 6.53% | 6.53% |
| Graduate | N/A | 8.08% |
Direct Loan Fees
In addition to interest, a Loan Origination Fee is charged with the principal amount of each subsidized and unsubsidized Federal Direct Student Loan received. The U.S. Department of Education will deduct the fee before the loan disburses, so the loan amount disbursed will be less than the amount originally borrowed. Students are responsible for the repayment of the entire amount, including the fee.
| For any loan disbursement for a loan where the final disbursement is/will be... | Origination fee percentage for Direct Subsidized Loans and Direct Subsidized Loans |
|---|---|
| On or after October 1, 2023, and before October 1, 2024 | 1.057% |
| On or after October 1, 2024, and before October 1, 2025 | 1.057% |
Steps to Obtain a Federal Direct (Subsidized or Unsubsidized) Loan at Catholic University
Step 1: Complete the Free Application for Federal Student Aid (FAFSA). After Catholic University receives your FAFSA and if you are eligible for a Federal Direct Loan, it will be included in your financial aid package.
Step 2: After enrolling at least half-time, accept your Federal Direct Student Loan(s) in Cardinal Station at cardinalstation.cua.edu using the Username and Password that were mailed to you when you applied. You can contact the Technology Support Help Desk at 202-319-4357 if you need this information again.
Step 3: (First-time Federal DIRECT Loan borrowers at Catholic University only) Complete a Federal Direct Loan Master Promissory Note (MPN) with the U.S. Department of Education at studentaid.gov. Once on the site you should select the Complete Aid Process then choose to Complete a Master Promissory Note. Follow the steps to complete the note. If you are experiencing technical difficulty signing the Master Promissory Note online, please contact the Department of Education's customer service center for borrowers toll-free at https://studentaid.gov/help-center/contact.
Step 4: (First-time Federal DIRECT Loan borrowers at Catholic University only) Complete a Federal Direct Loan Entrance Loan Counseling session at studentaid.gov. If you are a first-time borrower of a Federal Direct Student Loan at Catholic University, you must complete an entrance loan counseling session so that you will know your rights and responsibilities as a borrower. The online session will take you about 20 minutes to complete.
Step 5: All Borrowers should Complete an Annual Student Loan Acknowledgment for Federal Student Loans at studentaid.gov. This will become an annual requirement in the academic year 2022-2023. We recommend you complete an Annual Student Loan Acknowledgment each year you accept a new federal student loan. Our goal is to help you understand your loans and how they affect your financial future.
- If this is your first time accepting a federal student loan, you are acknowledging that you understand your responsibility to repay your loan.
- If you have existing federal student loans, you are acknowledging that you understand how much you owe and how much more you are eligible to borrow.
- You’ll also see other federal student aid information, including the interest rates and repayment options to make managing your student loans easier.
Important: Your Federal Direct Loan will not disburse to your student account unless you complete all of the steps.
Requesting a Reduction, Cancellation, or Reinstatement of a Federal Direct (Subsidized or Unsubsidized) Loan
To request a reduction or to cancel, please complete a Federal Direct Loan Reduction Request available on the Forms page.
To request an increase, please complete a Federal Direct Loan Stafford Increase Request available on the Forms page.
Direct Loan Limits
The federal government sets limits on the amount of money a student can borrow. Catholic University awards students that have filed the FAFSA the maximum amount eligible under such limits. The annual limit applies to the most a student can borrow in an academic year, while the aggregate limit applies to the maximum a student can borrow in a lifetime. Independent students and dependent students whose parent is denied a Federal Direct PLUS loan are eligible for an additional Federal Direct Unsubsidized Loan.
Below is a chart of annual and aggregate loan limits for the Federal Direct Loan Program
Annual Limits for Federal Direct Loans
Dependent Undergraduate| Completed Credits | Subsidized | Unsubsidized | Total | |
|---|---|---|---|---|
| Freshman | 0-29 | $3,500 | $2,000 | $5,500 |
| Sophomore | 30-59 | $4,500 | $2,000 | $6,500 |
| Junior & Senior | 60+ | $5,500 | $2,000 | $7,500 |
Independent Undergraduate
| Completed Credits | Subsidized | Unsubsidized | Total | |
|---|---|---|---|---|
| Freshman | 0-29 | $3,500 | $6,000 | $9,500 |
| Sophomore | 30-59 | $4,500 | $6,000 | $10,500 |
| Junior & Senior | 60+ | $5,500 | $7,000 | $12,500 |
| Completed Credits | Subsidized | Unsubsidized | Total | |
|---|---|---|---|---|
| Graduate | N/A | N/A | $20,500 | $20,500 |
Aggregate Limits for Federal Direct Loans
| Subsidized | Total (Subsidized & Unsubsidized) | |
|---|---|---|
| Dependent Undergraduate | $23,000 | $31,000 |
| Independent Undergraduate | $23,000 | $57,500 |
| Graduate | N/A | $138,500 |
Loan Proration
Loan proration impacts undergraduate students applying for graduation who are receiving Federal Direct Subsidized and Unsubsidized Loans.
Federal regulations require schools to prorate the Federal Direct Loan amounts for graduating undergraduate students when their final period of enrollment is less than a full academic year. The loan limit proration determines the maximum loan amount that a student may borrow for the final term of study based on the degree they are earning.
Graduating undergraduate students who are only attending one semester of the academic year will have their Federal Direct Loans prorated based on the number of credit hours they are enrolled.
Note: Graduate and professional students are excluded from the loan proration requirement.
Direct Loan Exit Counseling
The federal government requires that students participate in Loan Exit Counseling prior to leaving or graduating from college so that they will know their rights and responsibilities. During Exit Counseling, you will also be given information about deferment and forbearance options and how to get the necessary forms. Even though you have a six-month grace period, the Exit Counseling process will help you set up a repayment plan, a direct withdrawal, and a payment date. The Department of Education hosts Direct Loan Exit Counseling at studentaid.gov. The online session should take about 20 minutes to complete.
Direct Loan Repayment
Repayment of the Federal Direct Loan begins six months after the student graduates or ceases to be enrolled at least half time. Generally, you'll have from 10 to 25 years to repay your loan, depending on which repayment plan you choose.
The Direct Loan Servicing Center will notify you of the date your first payment is due. If you do not choose a repayment plan, the U.S. Department of Education will place you on the Standard Repayment Plan, with fixed monthly payments for up to 10 years. Most Direct Loan borrowers choose to stay with the Standard Repayment Plan, but there are other options for borrowers who may need more time to repay or who need to make lower payments at the beginning of the repayment period. For additional information about the available repayment plan options or to change your repayment plan option as well as a repayment plan calculator, visit studentaid.gov.
Direct Loan Deferment and Forbearance
A deferment is a postponement of payment on a loan, during which interest does not accrue if the loan is subsidized. If you can't make your scheduled loan payments, but don't qualify for a deferment, you may be able to receive a forbearance. A forbearance allows you to temporarily stop making payments on your loan, temporarily make smaller payments, or extend the time for making payments. For additional information, visit studentaid.gov.
Direct Loan Consolidation
There may be advantages to consolidating (combining) your federal student loans into one loan, starting with the convenience of making a single monthly payment. Consolidation generally extends the repayment period, resulting in a lower monthly payment. This may make it easier for you to repay your loans. However, you will pay more interest if you extend your repayment period through consolidation since you will be making payments for a longer period of time. Direct Loans provides an online consolidation calculator that you can use to find out how much you'll pay each month if you consolidate. Contact the Direct Loan Consolidation Center for more information at 1-800-557-7392 or at studentaid.gov.
Loan Forgiveness
The U.S. Department of Education (DOE) offers several loan forgiveness programs for Teachers and Public Service. For information go to studentaid.gov.
Additional Direct Loan Information
Contact the Federal Direct Loan Servicing Center toll-free at (800) 848-0979.