Federal Direct Loan Programs
Subsidized vs. Unsubsidized Loans
Direct Subsidized Loans are only available to undergraduate students with financial need. The Department of Education pays the interest on a subsidized loan while you are enrolled at least half-time, during your grace period, and during periods of loan deferment.
Direct Unsubsidized Loans are not need-based and are available to both undergraduate and graduate students. Direct Unsubsidized Loans accrue interest from the date of disbursement. If you do not pay the interest while you are enrolled in school or during your grace period, accrued interest will be added to your loan’s principal.
As an example, let’s say you spent four continuous years in college, plus two years in graduate school. You have a subsidized loan from your first semester for $1,000 with a 5.50% interest rate. After completing your schooling, you would only owe the original $1,000, thanks to the subsidized nature of the loan. If your loan was unsubsidized, you would owe your loan balance, plus any accrued interest.
Per federal regulations you must be accepted and enrolled at least half-time per term in order for your Federal Direct Loan(s) to disburse (three credits for graduate students and six credits for undergraduate students). If you fail to maintain at least half-time enrollment your loan disbursements will be canceled. Students can not be in default on a federal student loan and not owe a refund on a federal student grant or loan. Students must also Maintain satisfactory academic progress (minimum cumulative GPA of 2.0 or above for undergraduates and 3.0 for graduates).
Borrowing Limits
If you plan to borrow student loans, it is recommended that you borrow conservatively. You are not required to borrow the entire amount offered. Only borrow what you need. Refer to your award notification or view SHU Awards for your eligible loan amount. You are also advised to review your Financial Aid Disclosure in SHU Awards. You may only use your loan to pay for education-related expenses. Direct Loan borrowers are restricted to annual loan limits per academic year as well as aggregate lifetime loan limits for undergraduate and graduate study.
The aggregate limit for undergraduate dependent students is a total of $31,000 (up to $23,000 may be subsidized). The aggregate limit for undergraduate independent students and dependent students whose parents cannot borrow a Parent PLUS Loan is a total of $57,500 (up to $23,000 may be subsidized). The aggregate limit for graduate/professional students is $138,500 (up to $65,500 may be subsidized from undergraduate borrowing).
Interest Rates & Fees
| Program | 2024-2025 Interest Rate | 2024-2025 Origination Fee | 2025-2026 Interest Rate | 2025-2026 Origination Fee | |
|---|---|---|---|---|---|
| Undergraduate | Subsidized & Unsubsidized | 6.53% | 1.057% | 6.39% | 1.057% |
| Graduate | Unsubsidized | 8.08% | 1.057% | 7.94% | 1.057% |
Applying for a Federal Direct Loan
Before you begin: You will need your FSA ID and the name, address and phone numbers of two adult references (living in the U.S.) with different addresses. You must also have completed a Free Application for Federal Student Aid (FAFSA) and added Sacred Heart to the FAFSA (School Code 001403).
Attention MAC Users: you must use Internet Explorer or Firefox for your browser in order to complete your Federal Sub/Unsub Loan Agreement Master Promissory Note (MPN) and Loan Entrance Counseling-Direct. Safari is not compatible with the Department of Education's website.
- Electronically sign the Federal Sub/Unsub Loan Agreement (MPN)
The MPN is your promise to repay your loans and any accrued interest and fees to the U.S. Department of Education. It also explains the terms and conditions of your loans. - Complete the Loan Entrance Counseling-Direct
This counseling is a federal requirement and will inform you of your rights and responsibilities as a borrower under the Federal Direct Loan program. - Accept/Reduce/Decline your Direct Loan(s)
Direct Loan(s) Accept/Reduce/Decline your loans through SHU Awards under Menu > Accept Awards - Complete the Annual Student Loan Acknowledgment (optional)
The Annual Student Loan Acknowledgment is an optional online session that allows students to see how much they have borrowed in Federal loans, preview what their monthly payments might be, and explain concepts such as capitalization and the difference between federal and private loans. This optional task cannot be completed until after April 15 for the upcoming academic year which begins each fall.
What will you gain from the Annual Student Loan Acknowledgment?
- Knowing how much you owe in Federal student debt will allow you to make informed choices before agreeing to borrow more money to pay for higher education.
- Calculating the monthly payments and the median salary you can expect to receive after graduating from college will give you a better understanding of your obligation.
- Breaking down basic loan concepts such as interest accrual, capitalization, and the difference between private and federal student loans will help you better understand the balance for repayment.
Disbursement
Direct Loans are typically divided into equal disbursements for each semester. You may review SHU Awards for the semester installment amounts of your loans. After the start of your classes (typically after the add/drop period), your loans will post to your Student Account. To be eligible for federal loan disbursement, you must initiate attendance, be enrolled at least half-time, and be meeting satisfactory academic progress. At least half-time is defined as 6 or more credits for undergraduate students and 3 or more credits for graduate students. All outstanding financial aid requests related to eligibility must be received as indicated in SHU Awards. When your loans disburse, you will receive a disbursement notification from the Office of Student Accounts, so it is important to stay connected and keep your contact information current.
Refunds
If your federal aid exceeds your billed charges for the term, you will receive a refund of your credit balance within 14 days of aid disbursement. For more information, refer to the Student Accounts Credit Balance Processing webpage. Alternatively, you may elect to have the credit held for future academic year charges.
Modify, Cancel or Return (a portion of your loan)
To increase a loan amount, you may submit an additional Direct Loan Certification form. You may also request a modification, cancellation, or a loan decrease to a future term by emailing SFA@sacredheart.edu from your Sacred Heart email account. For returns back to the lender, send your written request to either SFA or to Student Accounts within 120 days of your disbursement date.
Enrollment
Changes in your enrollment status may impact your financial aid. If you drop below half-time enrollment, you may be ineligible for federal loan disbursement. It is important to keep your Financial Aid Counselor informed so that you can be advised concerning any changes to your aid eligibility. Before you make any decisions about dropping or withdrawing, read our Financial Assistance Withdrawal Policy and go over the changes with your Financial Aid Counselor. Failed attendance (unofficial withdrawals) and official course withdrawals affect your satisfactory academic progress, which may also impact your aid eligibility.
When you graduate or cease at least half-time enrollment, you will complete Exit Counseling, during which you will receive important information regarding repayment of your Direct Loans. Our Registrar will report your enrollment change to your loan servicer. Direct Subsidized and Unsubsidized loans have a 180-day grace period before repayment. During this grace period, you are not required to make payments though interest will continue to accrue.
Repayment
After your loans disburse, you will be assigned a federal loan servicer who will manage the repayment of your student loans. Direct loan borrowers are automatically assigned to the 10-year standard repayment plan. However, there are several repayment plans available to Direct Loan borrowers. You may contact your loan servicer for information on the different repayment strategies and request an alternate repayment option.
How much have I borrowed?
Visit the National Student Loan Data System by logging in with your FSA ID. This website will display your loan history for federal student loans. Private loans are not included.