Direct Subsidized and Unsubsidized Loans

Direct Subsidized Loans

The Direct Subsidized Loan is available to undergraduate students with financial need as determined by the FAFSA. The government pays or subsidizes the interest on behalf of students while they are enrolled at least half time.

Important Changes to the Direct Subsidized Loan Program Effective July 1, 2014

  • The interest rate on Direct Subsidized Loans made to undergraduate students on or after July 1, 2014, will increase from a fixed 3.86% to a fixed 4.66%.

Direct Unsubsidized Loans

The Direct Unsubsidized Loan is available to undergraduate and graduate students without regard to financial need. The student is responsible to pay the interest that accrues and may elect to pay while in school or to have it deferred.

Important Changes to the Direct Unsubsidized Loan Program Effective July 1, 2014

  • The interest rate on Direct Unsubsidized Loans made to undergraduate students on or after July 1, 2014, will increase from a fixed 3.86% to a fixed 4.66%.
  • The interest rate on Direct Unsubsidized Loans made to graduate students on or after July 1, 2014, will increase from a fixed 5.41% to a fixed 6.21%.

 Interest Rates Effective July 1, 2014

  • 4.66% Fixed - Undergraduate Direct Subsidized Loan
  • 4.66% Fixed - Undergraduate Direct Unsubsidized Loan
  • 6.21% Fixed - Graduate Direct Unsubsidized Loan

Direct Loan Fees

Direct Loans are subject to a loan origination fee, which is deducted from each loan prior to disbursement. Important changes to Direct Subsidized and Unsubsidized Loan fees and their effective dates:

  • 1.072% - Loans first disbursed on or after December 1, 2013 and before October 1, 2014
  • 1.073% - Loans first disbursed on or after October 1, 2014 and before October 1, 2015

Loan Limits

The maximum amount you can borrow each year in Direct Subsidized and Unsubsidized Loans depends on your grade level and on whether you are a dependent student or an independent student. Click here to see the Loan Limit Chart. Reminder: Graduate and Professional students are no longer eligible for the Direct Subsidized Loan effective July 1, 2012. 

First-time ORU Direct Loan borrowers complete the following to apply:

Click on https://studentloans.gov/myDirectLoan/index.action to complete the Direct Loan Master Promissory Note and the Direct Loan Entrance Interview. The Direct Loan Entrance Interview requirement may also be accessed through http://vision.oru.edu/. 

Repayment

No payments are required while a student is enrolled in school at least half time or during the six months after graduation (grace period). Due to new Federal regulations, the interest on new Direct Subsidized Loans disbursed on or after July 1, 2012, is no longer subsidized during the grace period. Minimum payment is $50 per month depending on the amount borrowed.

What if I can't make my monthly payment?

  • Contact your loan servicer immediately. NEVER ignore delinquency or default notices from your loan servicer.
  • Change your payment due date.
  • Switch repayment plans to get a lower monthly payment. In some instances your monthly payment may be $0.00, depending on your income and the repayment plan you select.
  • Get a deferment or forbearance.
  • Consolidate your loans. Please consider the pros and cons before consolidating.

Eligibility

  • Direct Loans are available to undergraduate and graduate students who have completed the FAFSA and who are U.S. citizens or eligible non-citizens enrolled at least half time in an eligible program at an eligible school.
  • The amount of the subsidized and unsubsidized loan award will be determined by the student's need (based on the results of the FAFSA) in conjunction with the student's grade level and dependency status.
  • An award notification will be sent to the student to inform them of their eligibility.
  • Students may choose to accept or decline all or part of the loan award.
  • The school may be required to adjust the loan amount if the student's FAFSA or enrollment changes.
  • The loan is disbursed in two equal payments per academic year; at the beginning of the fall semester and at the beginning of the spring semester.
  • Timely disbursement is dependent upon the student completing their financial aid file.