William D. Ford Direct Loan Program

About the Loan
Interest Rate and Fees
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

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

New Changes

Any loan that disburses after March 1, 2013 will have higher fees.

Subsidized and unsubsidized loan interest rates will increase by .05% (The old fee was 1% and is now 1.05%)
PLUS loan interest rates will increase by .20% (The old fee was 4% and is now 4.20%)

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

Example: A subsidized or unsubsidized loan fee for $5,500.00 will increase from $55.00 to $57.75. The disbursed amount will be $5,442.25.
Example: A PLUS loan fee for $10,000.00 will increase from $400.00 to $420.00. The disbursed amount will be $9,580.00.

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 dates will begin after January 14, 2013. Once the student has completed their MPN, the student may check back with our office regarding disbursement after January 14.

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% 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% 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).

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