About the Loan
Interest Rate and Fees
New Changes/Updates
Loan Amount
Application for Loans
Offer of Loans
Disbursement of Loans
Maintenance of Loans
Repayment of Loans

About the Loan

This William D. Ford Federal Direct Loan program allows eligible students to borrow loans from Federal Government, which provides low interest rates and beneficial repayment options. The Federal Direct Loan Program include Federal Direct Subsidized Loan, Federal Direct Unsubsidized Loan, Federal Parent PLUS Loan and Federal Graduate PLUS loans.

Interest Rate and Fees

Interest is money paid to the lender in exchange for borrowing money. Interest is calculated as a percentage of the unpaid principal amount (loan amount) borrowed. The interest rate varies depending on the loan type and (for most types of federal student loans) the first disbursement date of the loan. Please click here to view the current interest rates, or click here to view historical Federal Direct Loan interest rate information.

Most federal student loans have loan fees that are a percentage of the total loan amount. The loan fee is deducted proportionately from each loan disbursement you receive. This means the money you receive will be less than the amount you actually borrow. You're responsible for repaying the entire amount you borrowed and not just the amount you received.

Please click here to view the current loan fees for Federal Direct Subsidized Loans, Federal Direct Unsubsidized Loans and Federal Direct PLUS Loans.

New Changes/Updates

Subsidized Stafford Loan Interest Rate
College Cost Reduction and Access Act

Congress has passed and the President has signed the Bipartisan Student Loan Certainty Act of 2013, which ties federal student loan interest rates to financial markets. Under this Act, interest rates will be determined each June for new loans being made for the upcoming award year, which runs from July 1 to the following June 30. Each loan will have a fixed interest rate for the life of the loan.

These rates will apply to all new Federal Direct Loans made during indicated timeframe. Please click here to view the current interest rates, or click here to view historical Federal Direct Loan interest rate information.

Subsidized Stafford Loan Grace Period Interest Subsidy
Consolidated Appropriations Act, 2012

Stafford Loans (subsidized and unsubsidized) have a grace period during which repayment is not required until six months after the student graduates, withdraws or is enrolled in less than half-time. Previously, Federal Subsidized Stafford Loans maintained the interest subsidy during the grace period. The interest subsidy will no longer be provided during the grace period for first disbursements made on or after July 1, 2012, and before July 1, 2014.

New Limit on Eligibility for Subsidized Stafford Loans
Public Law 112 - 141

A new borrower on or after July 1, 2013, will not be eligible for new Federal Direct Subsidized Loans if the period during which the borrower has received such loans exceeds 150 percent of the published length of the borrower's educational program. The law also provides that a borrower who has reached the 150-percent limit is ineligible for interest subsidy benefits on all Federal Direct Subsidized Loans first disbursed to that borrower on or after July 1, 2013.

• Borrowers may receive Federal Subsidized Direct Loans for no more than150 percent of the length of the current academic program (i.e., six years for a four-year degree)
• Once a borrower has received Subsidized Loans for 150 percent of the length of their program, the borrower's future Federal Subsidized Direct Loan eligibility will end.
• A student who has received Federal Subsidized Direct Loans for 150 percent of the length of their program and continues enrollment beyond that point will lose all subsidies on previously received Federal Subsidized Direct Loans. The student also will be required to pay all accumulated interest.

Stafford and PLUS Loan Program Rebate
Budget Control Act of 2011

In Aug. 2, 2011, Congress passed the Budget Control Act of 2011, which put into place automatic federal budget cuts, known as a “sequester.” While the sequester does not otherwise change the amount, terms or conditions of Federal Direct Loans, the terms of the sequester affect the loan fees charged to Federal Direct Loan borrowers for Federal Direct Subsidized, Federal Direct Unsubsidized and Federal Direct PLUS loans. The amount of the loan origination fee for a loan is determined by the date of the first disbursement of the loan. Any subsequent disbursements, even if made on or after the relevant Oct. 1, have the same loan fee percentage that applied to the first disbursement of that loan. Please click here for more information about loan fees.

For latest announcements regarding the federal student aid programs, please visit the  Federal Student Aid website.

Loan Amount

For Federal Direct Subsidized and Federal Direct Unsubsidized Loans, these limits are:

 *Medical student annual loan limits dependent upon medical year level.

Application for Loans

Eligibility Requirements

- Federal Subsidized loans:
Applicants must,

• be an undergraduate student;
• be enrolled at least half-time with demonstrated financial need;
• be enrolled in an undergraduate degree program (certificate programs are not eligible for financial aid);
• have completed a FAFSA and be eligible to receive federal financial aid.

- Federal Unsubsidized loans:
Applicants must,

• be undergraduate or graduate student;
• be enrolled at least half-time, regardless of financial need;
• be enrolled in a graduate or undergraduate degree program (certificate programs are not eligible for financial aid);
• have completed a FAFSA and be eligible to receive federal financial aid.

Offer of Loans

All students planning to receive a Federal Direct Loan will need to complete a Master Promissory Note and Entrance Counseling at StudentAid.gov.  
                                                             
To complete these requirements, the following information will need to be provided: social security number, date of birth, Department of Education FSA ID (the same FSA ID 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 will begin during the first week of the term if all your classes have started. Federal Direct Loans require at least half-time enrollment (six credit hours for undergraduate/law/optometry/pharmacy/medical students, five credit hours for graduate students) to disburse. A valid Master Promissory Note (MPN) and completed entrance counseling is also required for disbursement.

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 according to the student's established refund preference. For more information on refunds, please click here.

Maintenance of Loans

In order to maintain eligibility, students must be enrolled at least half-time (six hours for undergraduate/law/optometry/pharmacy/medical students, and five hours for graduate students) at the time of disbursement and meet all Satisfactory Academic Progress requirements.

Repayment of Loans

For Federal 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 in at least a half-time basis. Loan Exit Counseling is required when these situations occur. Please click here to access the Federal Direct Loan Exit Counseling Guide, and visit StudentAid.gov to complete this requirement. We also encourage you to review our estimated Sample Loan Repayment Schedules as you determine whether to borrow Federal Student Loans.

Standard Repayment Plan:

• Eligible loans: Federal Direct Subsidized and Federal Unsubsidized Loans, Subsidized and Unsubsidized Federal Stafford Loans and all Federal PLUS Loans.
• Payments are a fixed amount of at least $50.00 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: Federal Direct Subsidized and Federal Direct Unsubsidized Loans, Subsidized and Unsubsidized Federal Stafford Loans and all Federal 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: Federal Direct Subsidized and Federal Direct Unsubsidized Loans, Subsidized and Unsubsidized Federal Stafford Loans and all Federal 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: Federal Direct Subsidized and Federal Direct Unsubsidized Loans, Subsidized and Unsubsidized Federal Stafford Loans, all Federal 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 percent of discretionary income between your adjusted gross income and 150 percent 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: Federal Direct Subsidized and Federal Direct Unsubsidized Loans, Subsidized and Unsubsidized Federal Stafford Loans, all Federal 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 percent of discretionary income between your adjusted gross income and 150 percent 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: Federal Direct Subsidized and Federal Direct Unsubsidized Loans, Federal Direct PLUS Loans made to the students and Federal Direct Consolidation Loans.
• Payments are calculated each year and are based on your adjusted gross income, family size and total amount of your Federal 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 Federal Direct Loan.
• Borrower must not be in default.
• Borrower must make 120 monthly payments on the loan.
• Payments must be made after Oct. 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 Federal Direct Subsidized and Federal Direct Unsubsidized Loans (including all Federal PLUS Loans).