What is a Federal Direct Loan?
An FDL is an educational loan provided through the federal government. They include subsidized and unsubsidized loans for students, and PLUS loans for parents and students.
What is the difference between a grant and a loan?
Loans are different from grants in that the student is required to pay back all loan money that is borrowed.
What is the difference between a subsidized and unsubsidized loan?
On all loans, there is an expense charged by the lender (interest) that the borrower pays for the use of borrowed money.
- For subsidized loans, you are not charged interest while in school at least half-time, or during grace or deferment periods. If at any point you do not meet one of these statuses and are in active repayment, interest charges will be applied.
- For unsubsidized loans, interest accumulates on the loan from the time it is disbursed. You have the option to pay on this interest while in school, and during grace, deferment, and forbearance periods, but it is not required. Any unpaid interest that accumulates during one of these periods will be capitalized and added to the total amount owed, also known as your loan principal.
Is there a time limit for borrowing loans?
For first-time borrowers on or after July 1, 2013, there is a limit on the maximum period of time the student can receive Direct Subsidized Loans. Students who fall under this rule may not receive Direct Subsidized Loans for more than 150 percent of the published length of their chosen program. Students enrolled in a two-year associate degree program may receive subsidized loans for up to three years (150 percent of 2 years = 3 years).
What if I fail to repay my loan?
Students who fail to repay their loans are considered to be in default of their loan payments and are not eligible to receive future aid until the default status is either rehabilitated or paid in full. For more information regarding the consequences of defaulting on a Direct Loan visit the FSA Collections website.
Students who are determined to have defaulted on loan payments obtained while at Alamo Colleges will be contacted by the Cennate i3 Group. Cennate i3 is the only organization affiliated with Alamo Colleges for loan default purposes.
Will I be charged an interest rate on my loan?
Borrowers are charged interest on the amount of funds disbursed. The interest rate is determined annually by the U.S. Department of Education, and is fixed for the life of the loan. Once the interest rate is set, it is effective for any Federal Direct Loans disbursed during the award period from July 1 to June 30. For current interest rates, click here.
How do I apply for a Federal Direct Loan?
Student loan borrowers can submit a loan request online through their ACES portal. All students who wish to borrow (including new and returning students) must complete the online request for student loan funds.
Can I apply for a Summer Loan?
Yes, summer loan requests may be submitted as soon as your summer financial aid request has been processed and eligibility determined. Please see the Priority Dates and Deadlines link below.
Completing the Federal Direct Loan Process:
1. All outstanding financial aid requirements, including verification, must be complete first.
2. Before applying, view the Direct Loan Eligibility page for all terms and conditions.
Completing the Federal Parent PLUS Loan Process:
Download the fillable PDF here and submit to your home campus.
Parents who borrow a Federal Parent Loan for Undergraduate Students (PLUS) are subject to the following regulations beginning July 1, 2015:
1. The Entrance Counseling Session is required for parents who are initially declined a PLUS Loan but eventually gain approval with a cosigner. Go to www.studentloans.gov
2. All searches for a cosigner for a PLUS Loan must be
exhausted before the dependent student may borrow additional Direct Loan
funds. The statement available here is required to be on file with the Student Financial Aid Office before the
dependent student is awarded additional loan funds.
3. Beginning with the 2015-2016 Academic Year, parents may use a completed Master Promissory Note (MPN) on www.studentloans.gov as the PLUS
Application. It is advisable, however, to confirm the arrival of the MPN with
the Student Financial Aid Office at your college.