Learn About Federal Direct Loans

What are the Types of Undergraduate Federal Direct Loans?

The Federal direct loan program has several different types of loans available for undergraduate borrowers. These are loans issued directly by the U.S. government not a private lender. Click the links below to learn more about each loan type:

Federal Direct Subsidized Loans
Federal Direct Unsubsidized Loans
Federal Direct Parent PLUS Loan NOTE: this type of loan is only available to a parent of a Dependent (as defined by the FAFSA) undergraduate student. Parents of Independent undergraduate students are not eligible for this loan.

What are the Interest Rates and How is Interest Calculated?

Interest rates for the Federal Direct Loan program are published for the academic year, usually in July, on the Federal Student Aid website. Click here to view the current rates and learn how interest is calculated.

Are there Loan Fees?

Yes. Loan origination fees (which are fees for creating the loan) are deducted from all the loan types listed above prior to disbursement of the loan. The loan fee may be different for the type of loan. Learn about current loan fees here on the Federal Student Aid Loan Webpage.

How Do I Know if I Meet the Requirements for a Federal Direct Loan?

In order to qualify for a Federal Direct Loan(s), a student must first have filed a FAFSA for the current academic year. All processes related to the FAFSA must complete before a loan can be disbursed.

To be eligible a student must:

meet all of the basic eligibility criteria of the FAFSA
be matriculated in a degree granting program
maintain enrollment of at least six credits for the semester(s) of the loan(s)
not be over the aggregate limit or annual award limit for the Federal Loan program
meet Satisfactory Academic Progress (SAP) for Federal Aid Programs
not have aid in excess of the Cost of Attendance
complete Federal Direct Loan Entrance Counseling
complete the Annual Student Loan Acknowledgment
have a signed and active Master Promissory Note on file

What is Federal Direct Loan Entrance Counseling?

Entrance counseling ensures you understand the terms and conditions of your loan and your rights and responsibilities. You'll learn what a loan is, how interest works, your options for repayment, and how to avoid delinquency and default. You can complete the process here on the Federal Student Aid Website.

What is the Annual Student Loan Acknowledgment (ASLA)?

The Annual Student Loan Acknowledgment is an additional component of the loan process that should be completed once each academic year that a student borrows. The purpose is to guide you in understanding the implications of initial and continued borrowing before you request a Federal Direct loan. You can learn more and complete it on the Federal Student Aid Web portal.

What is a Master Promissory Note (MPN)?

A Master Promissory Note is the contract that a borrower (in this case the student and/or parent) has with a lender (in this case the U.S. Government) that states the terms of the loan and that the loan must be repaid. You should carefully read the master promissory note before you sign it.

A student must sign an electronic Master Promissory Note (MPN) for the subsidized or unsubsidized loan before the loan can be disbursed. Once a student has signed a MPN it is valid for 10 years from the date it was signed and can be used for loans in future academic years that are within the 10 year period. Click here to complete an undergraduate MPN on the Federal Student Aid Portal.

A Parent must sign an electronic PLUS loan Master Promissory Note if they are borrowing a parent PLUS loan. Parents can click here to complete an Parent PLUS MPN on the Federal Student Aid Portal.

How Much Can I Borrow?

Annual Loan Limits for Direct Subsidized Loans and Direct Unsubsidized Loans

	Dependent Undergraduate Students	Independent Undergraduate Students
First Year (freshman)	$5,500 (maximum $3,500 subsidized)	$9,500 (maximum $3,500 subsidized)
Second Year (sophomore)	$6,500 (maximum $4,500 subsidized)	$10,500 (maximum $4,500 subsidized)
Third Year (junior) and Beyond	$7,500 (maximum $5,500 subsidized)	$12,500 (maximum $5,500 subsidized)

Aggregate Loan Limits: Maximum Total Outstanding Loan Debt

	Dependent Undergraduate Students	Independent Undergraduate Students
Undergraduate	$31,000 (maximum $23,000 subsidized)	$57,500 (maximum $23,000 subsidized)

Federal regulations require that when a student is enrolled in a program that is one academic year or more in length, but is in a remaining period of study that is shorter than a full academic year, the loan must be prorated. Students who graduate in the summer session or fall term will have their loans prorated.

Loan Proration Formula

How Do I submit a Federal Direct Loan Request?

Federal Direct Loan requests are submitted using our online electronic Dynamic Form.

Click here for step by step instructions for accessing the Loan Form

What Is the Process After I Complete and Submit My Direct Loan Application?

The Brooklyn College Loan processing unit will review your request for completeness and to determine if you meet all of the eligibility criteria. If you do, then a loan will be posted to CUNYfirst. If additional steps are needed you will be notified by email to address them before the loan will be posted.

After the loan has been posted to CUNYfirst the loan is then originated (created) within the Federal Aid origination system. The origination, Entrance Counseling, Annual Student Aid Acknowledgment and MPN must be confirmed within CUNYfirst before the loan can disburse to your CUNYfirst account.

How Long Will It Take to Receive a refund?

Federal Direct Loans follow the same refund procedures as other types of financial aid. You can learn more here on the Bursar's refunds web page.

What Can I Do if I Need to Increase, Decrease or Cancel My Direct Loan?

You can request an increase, decrease, or cancel a not yet disbursed direct loan by using the Federal Direct Loan Status change form available on the financial aid forms webpage.

What Should I Do if I Have Already Applied for a Direct Loan and Plan to Drop or Withdraw Below Six Credits or Completely?

If your enrollment drops below six credits your eligibility for disbursement and your loan repayment grace period will be affected. We recommend you speak with a financial aid representative or financial aid advisor before making changes to enrollment that will affect loan eligibility. Learn more about how to speak with someone on our financial aid services webpage.

When Do I Pay Back Direct Loans?

Visit the Federal Student Aid Portal Repayment page for information on loan repayment requirements, to access the loan simulator and learn about repayment plan options.