Federal Direct Stafford Loan
The Direct Loan Program is one of the Federal Student Aid programs of the U.S. Department of Education. Generally known as Stafford Loans, the loans can provide you with a simple, convenient, and flexible way to borrow money to pay for your education.
If you take out a Federal Direct Loan, you or your family will not be borrowing money from a bank. Direct Loans are loans made with federal capital and owned by the federal government. Loan repayments are made to the government, and Direct Loans are never sold.
How to Get Started
The process is simple for borrowers. Direct Loan borrowers first need to complete the Free Application for Federal Student Aid (FAFSA). Based on the information provided on the FAFSA, our office will determine the type and amount of financial aid you are eligible to receive.
There are two kinds of federal Direct Loans:
- Direct Stafford Subsidized Loan (undergraduate only): With a subsidized loan, the government pays the interest on this loan while you are attending school at least half-time and for loans first disbursed on or after July 1, 2014, during the six month grace period, which begins after you graduate or stop attending at least half-time.
- Direct Stafford Unsubsidized Loan: You can get this loan regardless of your family's income. This loan is a non-need-based loan, and you must pay the interest on a semiannual basis while you are enrolled in school and during the grace period or the interest will be added to the principal (original amount) of your loan at the time of repayment. To estimate monthly loan payments, use this online loan calculator.
You must accept the loan(s) at http://my.bsu.edu to indicate the type and amount of loan you wish to borrow: subsidized and/or unsubsidized. Subsequent loan requests may require submission of a paper form. It is possible to have both a subsidized and an unsubsidized loan at the same time. You must be enrolled for at least 6 credit hours undergraduate or 5 credit hours graduate.
The interest rate for Direct Stafford Loans first disbursed between July 1, 2013, and June 30, 2014 is fixed at 3.86% for undergraduate students, and 5.41% for graduate students. The interest rate for Direct Stafford Loans first disbursed between July 1, 2014, and June 30, 2015 is fixed at 4.66% for undergraduate students, and 6.21% for graduate students.
A 1.072% (1.073% for loans with a first disbursement on or after October 1, 2014) loan fee will be deducted from each loan disbursement . This fee helps reduce the government's cost of the loan.
Loan Limits for an Academic Year
Loan limits for undergraduate students vary depending on your class level and your dependency status as determined by the information provided on your FAFSA.
Limits for dependent students are:
- $5,500 for a freshman (no more than $3,500 of this amount can be in subsidized loans).
- $6,500 for a sophomore (mo more than $4,500 of this amount can be in subsidized loans).
- $7,500 for a junior or senior (no more than $5,500 of this amount can be in subsidized loans).
Limits for independent undergraduate students are:
- $9,500 for a freshman (no more than $3,500 of this amount may be in subsidized loans).
- $10,500 for a sophomore (no more than $4,500 of this amount may be in subsidized loans).
- $12,500 for a junior or senior (no more than $5,500 of this amount may be in subsidized loans).
Students who have earned fewer than 30 semester credits are freshmen. Students who have earned between 30 and 59 credits are sophomores. Students who have earned between 60 and 89 credits are juniors. Students who have earned 90 credits or more are seniors.
Limit for Graduate or Post-baccalaureate students are:
Students seeking a second undergraduate degree may borrow only at the undergraduate level. Students seeking instructional licensure may borrow up to $12,500 ($7,000 must be unsubsidized loans).
Total Loan Debt
The total Federal Stafford Loan debt you can acquire is:
- $31,000 as a dependent undergraduate student. No more than $23,000 of this amount may be in subsidized loans.
- $57,500 as an independent undergraduate student. No more than $23,000 of this amount may be in subsidized loans.
- $138,500 as a graduate student (this includes undergraduate loans).
Method of Payment
Loan proceeds will be credited directly to your eBill account. Tuition and room and board charges will be paid. If the amount of your loan is greater than the amount of these charges or if these charges have already been paid, a refund will be issued to you.
Electronic Master Promissory Note (MPN)
Federal regulations require that first-time borrowers complete a Master Promissory Note. Loan proceeds will not be disbursed until the MPN has been completed.
Entrance and Exit Counseling
If you are a first-time borrower, you must complete an online loan counseling session. Loan proceeds will not be disbursed until the loan counseling requirement has been met.
In addition, if you graduate, drop below half-time, or withdraw from Ball State, you are required to complete an online exit interview with the U.S. Department of Education.
During this session you will receive general information on expected monthly repayments, repayment options, and debt management planning to facilitate repayment.
Repayment of your loan(s) begins six months after you cease to be enrolled at least half-time. Minimum monthly payments are $40.
You have seven repayment plans to select from:
- Standard (10 years)
- Extended (not to exceed 25 years)
- Graduated (not to exceed 10 years)
- Income Contingent
- Pay As You Earn