Direct Loans for New Undergraduate Students
Federal Direct Loans are made directly from the U.S. Federal government to students through the Federal Direct Loan Program. There are two types of Direct Loans are Subsidized Loans and Unsubsidized Loans.
These loans are based on demonstrated need determined by the Office of Financial Aid. The government pays the interest on federally Subsidized loans during the student's full-time enrollment and in authorized deferment periods.
The student is responsible for all the interest that accrues on this loan, including interest that accrues while in school. Interest also accumulates during deferment and the grace period. Once the student enters repayment the interest becomes part of the loan principal in a process called capitalization.
Students without full eligibility for the Federal Subsidized Loan are eligible for this loan program.
|Maximum Loan Amount|
|First Year: $5,500 maximum of which up to $3,500 can be in the form of Subsidzed loan funds.|
|Second Year: $6,500 maximum of which up to $4,500 can be in the form of Subsidzed loan funds.|
|Third Year: $7,500 maximum of which up to $5,500 can be in the form of Subsidzed loan funds.|
|Fourth Year: $7,500 maximum of which up to $5,500 can be in the form of Subsidzed loan funds.|
Interest Rate for the 2015-2016 academic year
4.29% for Loans disbursed between 7/1/15 and 6/30/16
Direct loan fees are 1.072% for loans disbursed between 10/1/14 and 9/30/15. For loans disbursed between 10/1/15 and 09/30/16, the direct loan fees are 1.068%. Direct loan fees are deducted from the loan proceeds at disbursement. So for example a Direct loan disbursement of $2000 would have $21 in fees deducted from it so that the net proceeds of the disbursement would be $1979.
Please note: Direct loans are fixed rate loans. Undergraduate Direct loans taken out in the 2015-2016 academic year that are disbursed after 7/1/15 will have a fixed rate of 4.29% for the life of that loan. Each academic year the government will determine the interest rates for that year’s loans. The interest rate for undergraduate Direct Loans is based on an index + 2.05%. Under the law, the index rate is determined each year as the “high yield of the 10-year Treasury note” auctioned at the final auction held prior to the June 1 preceding the July 1 of the year for which the rate will be effective.
- Students must have a completed financial aid application for the applicable academic year.
- Students must be U.S. citizens or eligible non-citizens
- Students must be accepted in a degree-seeking program.
- Students must be registered at least half-time.
- Students must attend classes and maintain satisfactory academic progress to continue to be eligible for their loans.
- Direct loans are awarded as part of a student’s financial aid package. Once the loan is awarded the student will need to accept the Direct loan award(s) online via eCommon.
- First time Direct loan borrowers at Emerson College are required to complete Direct loan Entrance Counseling and a Direct Loan Master Promissory Note (MPN). These documents can be completed at any time at www.studentloans.gov
- All borrowers are required to participate in Exit Loan Counseling if they stop attending or drop below half-time standing. Exit Counseling can be completed online via www.studentloans.gov.
All students wishing to borrow a Direct Loan must accept the Direct loan award(s) online via eCommon. Emerson College will notify the Direct Lending Service that you are attending Emerson College and certify your eligibility for a Direct Loan. A fall semester applicant’s lender will be notified in late June. A spring semester applicant’s lender will be notified starting in December.
If you have not previously borrowed a Direct Loan at Emerson College:
- You must complete the Direct Loan Master Promissory Note (MPN). To complete the Direct Loan MPN, go to the Direct Loan Website. You only need to do the MPN once and it is valid for subsequent loans for up to 10 years.
- You must complete the federally required Entrance Interview. The Interview can be found on the Direct Loan Website. If you have borrowed a Direct Loan at Emerson College in the past, you do not need to complete another Entrance Interview.
View a chart on the Direct Loan process from application to disbursement »
Loans are disbursed in two equal installments split evenly between each semester, each portion disburses after the Add/Drop period each semester.
For Subsidized Loans, the interest is subsidized while the student is enrolled at least half time. Once a student is attending less than half time, leaves, or graduates, the student will enter their 6 month grace period. Loans that have disbursed after 7/1/2012 will begin to accrue interest during their 6 month grace period. Any accrued interest on the loan at the end of the grace period will become part of the loan principal of the loan in a process called capitalization. Repayment of principal and interest begins after the 6 month grace period
For Unsubsidized Loans, interest accrues each month after the funds are disbursed to the school. Unsubsidized loans have a 6 month grace period after the student drops below half-time status, leaves, or graduates; however, interest does accrue each month while the student is in school.
There are several repayment options available. Students will receive Exit Loan Counseling when they leave school. To review your repayment information now, visit the Federal Student Aid website. It also offers helpful interest and repayment calculators to help you better understand your repayment options.
You can also read our Loan Repayment fact sheet for more information about loan repayment assistance.
Emerson College’s two year cohort default rate on Direct Loans is 1.4% which is substantially lower than the national average of 9.1%.