William D. Ford Direct Loan Program

About the Loan
Interest Rate and Fees
New Changes/Updates
Loan Amount
Application for Loans
Offer of Loans
Disbursement of Loans
Maintenance of Loans
Repayment of Loans

About the Loan

This William D. Ford Direct Loan program allows eligible students to borrow loans from Federal Government, which provides low interest rates and beneficial repayment options.  Direct loan awards include Subsidized, Unsubsidized, Parent PLUS and Graduate PLUS loans.

Interest Rate and Fees

Effective for loans with a first disbursement on or after October 1, 2014:

  • Subsidized and Unsubsidized loan fees will increase by .001 percent (the old fee was 1.072 percent and is now 1.073 percent).
  • PLUS loan fee will increase by .004 percent (the old fee was 4.288 percent and is now 4.292 percent).

Because of the higher fees, disbursement amounts will be less. 

  • Example: A Subsidized or Unsubsidized loan fee for $5,500.00 will increase from $58.96 to $59.01. The disbursed amount will be $5,440.99. 
  • Example: A PLUS loan fee for $10,000.00 will increase from $428.80 to $429.20. The disbursed amount will be $9,570.80. 
  • Loan fee calculations that result in more than two decimal points must be truncated (not rounded) to two decimal points (cents).

Effective for loans with a first disbursement on or after December 1, 2013:

  • Subsidized and Unsubsidized loan fees will increase by .021 percent (the old fee was 1.051 percent and is now 1.072 percent).
  • PLUS loan fee will increase by .084 percent (the old fee was 4.204 percent and is now 4.288 percent).

Because of the higher fees, disbursement amounts will be less. 

  • Example: A Subsidized or Unsubsidized loan fee for $5,500.00 will increase from $57.80 to $58.96. The disbursed amount will be $5,441.04. 
  • Example: A PLUS loan fee for $10,000.00 will increase from $420.40 to $428.80. The disbursed amount will be $9,571.20. 

Effective for loans with a first disbursement on or after July 1, 2013:

  • For undergraduate students: Subsidized and Unsubsidized loan interest rate is 3.86 percent, fixed.
  • For graduate students: Unsubsidized loan interest rate is 5.41 percent, fixed.
  • Direct PLUS loan interest rate is 6.41 percent, fixed.

The following information is for loans with a first disbursement prior to July 1, 2013:

  • Subsidized loan interest rate is 3.4 percent, fixed.
    Unsubsidized loan interest rate is 6.8 percent, fixed.
  • The U.S. Department of Education charges a loan fee of 1 percent of the principal amount of each Direct Subsidized and Unsubsidized Loan. This fee is deducted proportionately from each disbursement of your loan. 

Any loan that disbursed after March 1, 2013 had higher fees:

  • Subsidized and Unsubsidized loan fees increased by .051 percent (the old fee was 1 percent and is now 1.051 percent).
  • PLUS loan fee increased by .204 percent (the old fee was 4 percent and is now 4.204 percent).

Because of the higher fees, disbursement amounts will be less.

  • Example: A Subsidized or Unsubsidized loan fee for $5,500.00 increased from $55.00 to $57.80. The disbursed amount will be $5,442.20.
  • Example: A PLUS loan fee for $10,000.00 increased from $400.00 to $420.40. The disbursed amount will be $9,580.00.

New Changes/Updates

Subsidized Stafford Loan Interest Rate
College Cost Reduction and Access Act

Congress has passed and the President has signed the Bipartisan Student Loan Certainty Act of 2013, which ties federal student loan interest rates to financial markets. Under this Act, interest rates will be determined each June for new loans being made for the upcoming award year, which runs from July 1 to the following June 30. Each loan will have a fixed interest rate for the life of the loan.

The following table provides the interest rates for new Direct Loans made on or after July 1, 2013. These rates will apply to all new Direct Loans made during this time.

Interest Rates for Direct Loans First Disbursed on or After July 1, 2013
Loan Type Borrower Type Loans  first disbursed on or after 7/1/13 and before 7/1/14 Loans first disbursed on or after 7/1/14 and before 7/1/15
Direct Subsidized Loans Undergraduate 3.86% 4.66%
Direct Unsubsidized Loans Undergraduate 3.86% 4.66%
Direct Unsubsidized Loans Graduate or Professional 5.41% 6.21%
Direct PLUS Loans Parents and
Graduate or Professional Students
6.41% 7.21%

Subsidized Stafford Loan Grace Period Interest Subsidy
Consolidated Appropriations Act, 2012

Stafford Loans (subsidized and unsubsidized) have a grace period during which repayment is not required until six months after the student graduates, withdraws or is enrolled in less than half-time. Previously, Subsidized Stafford Loans maintained the interest subsidy during the grace period. The interest subsidy will no longer be provided during the grace period for first disbursements made on or after July 1, 2012, and before July 1, 2014.

New Limit on Eligibility for Subsidized Stafford Loans
Public Law 112 - 141

A new borrower on or after July 1, 2013, will not be eligible for new Direct Subsidized Loans if the period during which the borrower has received such loans exceeds 150 percent of the published length of the borrower's educational program. The law also provides that a borrower who has reached the 150-percent limit is ineligible for interest subsidy benefits on all Direct Subsidized Loans first disbursed to that borrower on or after July 1, 2013.

  • Borrowers may receive Subsidized Direct Loans for no more than150 percent of the length of the current academic program (i.e., six years for a four-year degree)
  • Once a borrower has received Subsidized Loans for 150 percent of the length of their program, the borrower's future Subsidized Loan eligibility will end.
  • A student who has received Subsidized Direct Loans for 150 percent of the length of their program and continues enrollment beyond that point will lose all subsidies on previously received Subsidized Direct Loans. The student also will be required to pay all accumulated interest.

Stafford and PLUS Loan Program Rebate
Budget Control Act of 2011

For a Direct Subsidized Loan or a Direct Unsubsidized Loan, first disbursed on or after July 1, 2013, and before December 1, 2013, the loan fee increased from 1.0 percent of the principal amount of the loan to 1.051 percent.

For Direct PLUS Loans for both parent and graduate student borrowers, loans first disbursed on or after July 1, 2013, and before December 1, 2013, the loan fee increased from 4.0 percent to 4.204 percent.

Because of the higher fees, disbursement amounts will be less.

  • Example: A subsidized or unsubsidized loan fee for $5,500.00 increased from $55.00 to $57.80. The disbursed amount will be $5,442.20.
  • Example: A PLUS loan fee for $10,000.00 increased from $400.00 to $420.40. The disbursed amount will be $9,580.00.

For a Direct Subsidized Loan or a Direct Unsubsidized Loan first disbursed on or after December 1, 2013, and before October 1, 2014, the loan fee will increase from 1.051 percent of the principal amount of the loan to 1.072 percent.

For Direct PLUS Loans for both parent and graduate student borrowers, loans first disbursed on or after December 1, 2013, and before October 1, 2014, the loan fee will increase from 4.204 percent to 4.288 percent.

Because of the higher fees, disbursement amounts will be less.

  • Example: A subsidized or unsubsidized loan fee for $5,500.00 will increase from $57.80 to $58.96. The disbursed amount will be $5,441.04.
  • Example: A PLUS loan fee for $10,000.00 will increase from $420.40 to $428.80. The disbursed amount will be $9,571.20.

For more information on these regulation changes, please visit the Federal Student Aid website.

Loan Amount

For Stafford Loans, these limits are:  
Dependent Undergraduates
Annual Limit Aggregate Limit
Total Subsidized Maximum Total Subsidized Maximum
Freshmen $5,500 $3,500 $31,000 $23,000
Sophomores $6,500 $4,500
Juniors and Seniors $7,500 $5,500











 

Independent Students
Annual Limit Aggregate Limit
Total Subsidized Maximum Total Subsidized Maximum
Freshmen $9,500 $3,500 $57,500 $23,000
Sophomores $10,500 $4,500
Juniors and Seniors $12,500 $5,500
Graduate and Professional Students $20,500 $0 $138,500 $65,500











 

Application for Loans

Eligibility Requirements

- Subsidized loans:
Applicants must,

  • be an undergraduate student;
  • be enrolled in at least half-time with established financial need;
  • be enrolled in an undergraduate degree or certificate program at an eligible institution;
  • have completed a FAFSA and be eligible to receive federal financial aid.

- Unsubsidized loans:
Applicants must,

  • be and undergraduate or graduate student;
  • be enrolled in at least half-time, regardless of financial need;
  • be enrolled in a graduate, an undergraduate or certificate program at an eligible institution;
  • have completed a FAFSA and be eligible to receive federal financial aid.

Offer of Loans

All students planning to receive a direct loan will need to complete a Master Promissory Note and Entrance Counseling at Studentloans.gov.  
                                                             
To complete these requirements, the following information will need to be provided: social security number, date of birth, Department of Education PIN (the same PIN used for the FAFSA), driver’s license number (if applicable), and two personal references (full name, address, and telephone numbers). The University of Houston will electronically verify with the Department of Education that these steps have been completed before funds are released. 

Once a student is notified via email, the student will need to accept any loan awards via myUH self-service account. If the student does not need loans they are awarded, the student can reduce or decline them.

Disbursement of Loans

Disbursement will begin during the first week of classes. Once the student has completed their MPN, the student may check back with our office regarding disbursement after 3 - 5 business days.

Once the loan has been disbursed, the funds will be applied to the student's account to cover charges. If a credit balance is created, funds will be refunded to the student's Higher One account preference.

Maintenance of Loans

In order to maintain eligibility, students must be enrolled at least half-time at the time of disbursement and meet all Satisfactory Academic Progress requirements.

Repayment of Loans

For Direct and FFELP Loans, repayment begins six months after the student for whom the loan was borrowed graduates, drops out or otherwise stops being enrolled on at least a half-time basis.

Standard Repayment Plan:

  • Eligible loans: Direct Subsidized and Unsubsidized Loans, Subsidized and Unsubsidized Federal Stafford Loans and all PLUS Loans.
  • Payments are a fixed amount of at least $50 per month.
  • You'll have 10 years to repay your loans.
  • You'll pay less interest for your loan over time under this plan than you would under other plans.

Graduated Repayment Plan:

  • Eligible loans: Direct Subsidized and Unsubsidized Loans, Subsidized and Unsubsidized Federal Stafford Loans and all PLUS Loans.
  • Payments are lower at first and then increase, usually every two years.
  • You'll have up to 10 years to repay your loans.
  • You'll pay more for your loan over time than you would under the 10-year standard plan.

Extended Repayment Plan:

  • Eligible Loans: Direct Subsidized and Unsubsidized Loans, Subsidized and Unsubsidized Federal Stafford Loans and all PLUS Loans.
  • To be eligible for the extended plan, you must have more than $30,000 in debt.
  • Payments may be fixed or graduated.
  • You'll have up to 25 years to repay your loans.
  • Your monthly payments will be lower than the 10-year standard plan monthly payments.
  • You'll pay more for your loan over time than you would under the 10-year standard plan.

Income-based Loan Repayment Program:

  • Eligible loans: Direct Subsidized and Unsubsidized Loans, Subsidized and Unsubsidized Federal Stafford Loans, all PLUS Loans made to the students and Consolidation Loans (Direct or FFEL) that do not include Direct or FFEL PLUS loans made to parents.
  • Your maximum monthly payments will be 15 percent of discretionary income between your adjusted gross income and 150% of the poverty guideline for your family size and state of residence (other conditions apply).
  • Your payment changes as your income changes.
  • You'll have up to 25 years to repay your loans.
  • You must have a partial financial hardship.
  • Your monthly payments will be lower than the 10-year standard plan monthly payments.
  • You'll pay more for your loan over time than you would under the 10-year standard plan.
  • If you have not repaid your loan in full after making the equivalent of 25 years of qualifying monthly payments, any outstanding balance on your loan will be forgiven.
  • You may have to pay income tax on any amount that is forgiven.

Pay As You Earn Repayment Plan:

  • Eligible loans: Direct Subsidized and Unsubsidized Loans, Subsidized and Unsubsidized Federal Stafford Loans, all PLUS Loans made to the students and Consolidation Loans (Direct or FFEL) that do not include Direct or FFEL PLUS Loans made to parents.
  • Your maximum monthly payments will be 15 percent of discretionary income between your adjusted gross income and 150% of the poverty guideline for your family size and state of residence (other conditions apply).
  • Your payment changes as your income changes.
  • You'll have up to 20 years to repay your loans.
  • You must have a partial financial hardship.
  • Your monthly payments will be lower than the 10-year standard plan monthly payments.
  • You'll pay more for your loan over time than you would under the 10-year standard plan.
  • If you have not repaid your loan in full after making the equivalent of 20 years of qualifying monthly payments, any outstanding balance on your loan will be forgiven.
  • You may have to pay income tax on any amount that is forgiven.

Income Contingent Repayment Plan:

  • Eligible loans: Direct Subsidized and Unsubsidized Loans, Direct PLUS Loans made to the students and Direct Consolidation Loans.
  • Payments are calculated each year and are based on your adjusted gross income, family size and total amount of your Direct Loans.
  • Your payment changes as your income changes.
  • You'll have up to 25 years to repay your loans.
  • Your monthly payments will be lower than the 10-year standard plan monthly payments.
  • You'll pay more for your loan over time under this plan than you would under the 10-year standard plan.
  • If you do not repay your loan after making the equivalent of 25 years of qualifying monthly payments, the unpaid portion will be forgiven.

Income-Sensitive Repayment Plan:

  • Eligible loans: Subsidized and Unsubsidized Federal Stafford Loans, FFEL PLUS Loans and FFEL Consolidation Loans.
  • Your monthly payment is based on annual income. Your payments change as your income changes.
  • You'll have up to 10 years to repay your loans.
  • You'll pay more for your loan over time than you would under the 10-year standard plan.
  • Each lender's formula for determining the monthly payment amount under this plan can vary.

Public Service Loan Forgiveness Program:

  • Under this program, the amount forgiven is the remaining outstanding balance of principal and accrued interest on an eligible Direct Loan.
  • Borrower must not be in default.
  • Borrer must make 120 monthly payments on the loan.
  • Payments must be made after October 1, 2007.
  • Borrower must be employed full-time in a public service job during the same period in which the qualifying payments are made and at the time that the cancellation is granted.

Deferment:

A deferment is a period during which repayment of the principal and interest of your loan is temporarily delayed.

Forbearance:

If you can't make your scheduled loan payments, but don't qualify for a deferment, your loan servicer may be able to grant you a forbearance. With forbearance, you may be able to stop making payments or reduce your monthly payment for up to 12 months. Interest will continue to accrue on your subsidized and unsubsidized loans (including all PLUS Loans).

  • For undergraduate students: Subsidized and Unsubsidized loan interest rate is 3.86 percent, fixed.
  • For graduate students: Unsubsidized loan interest rate is 5.41 percent, fixed.
  • Direct PLUS loan interest rate is 6.41 percent, fixed.