Frequently Asked Questions About Direct Student Loans
Browse our FAQ categories to get more information about applying for, receiving, and paying back direct student loans.
Direct Stafford Loan FAQs
The Federal Direct Subsidized Stafford Loan is a need-based student loan that does not require a credit check. As long as you are enrolled at least half-time, the interest is paid by the Federal Government. For Subsidized Loans first disbursed prior to July 1, 2012, the government also pays the interest during the six-month grace period. Repayment of the loan begins six months after you cease half-time enrollment.
The Federal Direct Unsubsidized Stafford loan is not need-based and does not require a credit check. It is intended to help students who do not qualify for need-based aid or for whom need-based aid is not sufficient to meet their educational expenses. For this loan, the interest begins to accrue immediately upon disbursement. You are able to delay making payments on the loan as long as you are enrolled at least half-time. Repayment on the loan begins six months after you cease half-time enrollment.
| Year | Dependent Undergraduate Student (except students whose parents are unable to obtain PLUS Loans) | Independent Undergraduate Student (and dependent students whose parents are unable to obtain PLUS Loans) | Graduate and Professional Degree Student |
|---|---|---|---|
| Freshman | $5,500 - No more than $3,500 of this amount may be in subsidized loans. | $9,500 - No more than $3,500 of this amount may be in subsidized loans. | $20,500 |
| Sophmore | $6,500 - No more than $4,500 of this amount may be in subsidized loans. | $10,500 - No more than $4,500 of this amount may be in subsidized loans. | $20,500 |
| Junior/Senior | $7,500 - No more than $5,500 of this amount may be in subsidized loans. | $12,500 - No more than $5,500 of this amount may be in subsidized loans. | $20,500 |
| Maximum total debt from Stafford Loans when you graduate (aggregate loan limits) | $31,000 - No more than $23,000 of this amount may be in subsidized loans. | $57,500 - No more than $23,000 of this amount may be in subsidized loans. | $138,500 - No more than $65,500 of this amount may be in subsidized loans. The graduate debt limit includes Stafford Loans received for undergraduate study. |
Yes, there is a loan origination fee that is deducted from Subsidized/Unsubsidized loans before they are disbursed. The fee is 1.059% for loans first disbursed between 10/1/19 and 9/30/20, and 1.057% for loans first disbursed between 10/1/20 and 9/30/22.
You can find up-to-date interest rates and other information on federal loans at https://studentaid.gov/understand-aid/types/loans/interest-rates
Applying for Direct Stafford Loans FAQ
The first step is applying for financial aid.
- The first step is to complete the Free Application for Federal Student Aid (FAFSA) at FAFSA.ed.gov for the current aid year. This must be done annually as long as you intend to receive financial aid.
- You must list the NLU school code 001733 for NLU to receive your FAFSA results.
- If you need help completing any of these steps above please call 888.658.8632 x5350.
- Social Security Number
- Driver's License Information
- Alien registration number if you are not a U.S. Citizen
- Tax returns from the previous year
- W-2's from previous year
Yes, you must complete the FAFSA for the Student Finance Office to determine your financial aid eligibility.
Students who are fully admitted to a degree-seeking program and are taking classes that are required for the degree. Students must be enrolled at least half-time to be eligible for most financial aid programs including student loans.
You will be sent an Award Notification Letter that includes the offer of student loans. Award letters are emailed to your NLU student email address. The award letter will include a Loan Acceptance Form. Please follow all the instructions on the loan acceptance form and return it to the Student Finance Office.
There are two types of Federal Direct Student Loans, Stafford and PLUS loans.
No. You will be offered your maximum loan eligibility. You have the option to accept all of the offered loans or a partial amount.
Yes, you have to complete Entrance Counseling and a Master Promissory Note (MPN) in order for the Student Finance Office to disburse the loans to your account. These can be completed online at studentloans.gov.
This is a federal requirement that helps students understand their rights and responsibilities regarding their loans.
All first time borrowers must complete Entrance Counseling. You can complete it here: https://studentloans.gov. We will receive electronic notification that you have completed entrance counseling 1-2 business days after you have done so online.
Your loans will not disburse until Entrance Counseling has been completed.
A Master Promissory Note (MPN) is a contract/legal agreement between you and your lender that you will repay the loan.
Yes, unless you have already completed a Federal Direct Loan Master Promissory Note (MPN) that hasn't expired. When you complete an MPN and have a loan disbursement within one year, the MPN is active for ten years. You are able to complete the MPN here: https://studentloans.gov.
Your loans will not disburse until the MPN has been completed.
As of July 1, 2010, all loans are Federal Direct and you are required to complete a new Federal Direct Loan Master Promissory Note.
Applying for Federal Direct PLUS or Grad PLUS Loans FAQs
You should contact Financial Aid to discuss your needs. Parent PLUS and Grad PLUS loans may be the solution.
The Federal Direct PLUS (Parent Loan for Undergraduate Students) is a loan for the parents of dependent undergraduate students. The loan is not based on financial need and can be awarded up to the cost of attendance minus other aid the student is receiving. Parents determine the amount they wish to borrow. This loan is subject to credit approval policies set by the Department of Education as the lender.
Your parent needs to complete the PLUS Loan Acceptance Form that was included with your Award Notification Letter. Your parent also needs to apply through the Department of Education: https://studentloans.gov.
If your parents are denied a Parent PLUS loan and you have a credit worthy endorser, your endorser can apply.
Graduate and professional students can apply for a Federal Direct Graduate PLUS Loan. Students who have exhausted their Federal Stafford Loans or who seek additional funding may apply for this loan. This loan may be better than alternative/private loans which have variable interest rates. Eligible credit-worthy students can borrow up to the full cost of attendance, minus any other financial aid they are receiving.
You have to apply through the Department of Education website: https://studentloans.gov.
If you are denied a Grad PLUS loan and you have a credit worthy endorser, your endorser can apply.
The loan MUST be originated by the school before your last day of class for the term. Loans cannot be originated after the last day of the term due to federal regulations. You should submit the Loan Acceptance Form to our office at least a week before your term ends to ensure that it will be processed in time.
If you are not able to obtain a private loan for past due balances, you must work out a payment arrangement with the Student Finance Office. You will not be permitted to register with a past-due balance.
Disbursing Direct Student Loans FAQs
Your loans will disburse according to the disbursement schedule which typically begins during the second week after the add/drop period has ended.
There are several reasons why your loan funds have not yet disbursed. Among the possible reasons are:
- You may not have completed your FAFSA
- You may not have provided our office with additional documentation
- Your Loan Acceptance Form has not been received
- You may not have completed Entrance Counseling for Direct Loans
- You may not have completed Master Promissory Note for Direct Loans
Tuition and fees are paid and any excess funds will result in a refund to you or your parent in the case of a Parent PLUS Loan. To view your NLU account information, check your NLU portal.
National Louis University offers two methods of refund delivery. Paper check is the default option for receiving your refund. We also offer direct deposit to your checking or savings account.
If your enrollment status changes, NLU will review your financial aid package and adjustments may occur. If you drop below half-time student status, you are not eligible for any loans.
Information from the Department of Education regarding your Direct Loan is available at: https://studentloans.gov.
A written statement needs to be either faxed to: 847-465-5894 or emailed to: studentfinance@nl.edu. The email must be sent directly from the student's NLU email address.
Servicing of My Direct Loan FAQs
The Department of Education is your actual lender although they have contracted with several servicers to actually service your loan.
You cannot keep your previous lender for new loans after July 1, 2010. The lender for all new loans is the Department of Education.
The servicers listed are contracted by the Department of Education to manage the Direct Loans. They are responsible for the billing, collection and processing of all deferments, forbearances and cancellations.
You will be notified which company will be servicing your loan. You are also able to view your loan information here.
Within sixty days of the loan disbursement, the servicer will contact you.
Exit Counseling will explain your rights and responsibilities as a Direct Loan borrower. Direct Loan Exit Counseling is required when you cease half-time enrollment.
Yes, it is required by law. You can complete Exit Counseling here: https://studentloans.gov
To find out who your previous lenders were, go to the National Student Loan Database System (NSLDS) at https://nslds.ed.gov.
Managing My Student Loans FAQs
The first place to start is https://studentloans.gov. This site provides information on your loan as well as information on loan consolidation, loan forgiveness, optional payment plans as well as deferment and forbearance information.
Direct Loan Consolidation is available through the Department of Education. You are able to consolidate your Direct and FFELP loans, if you have borrowed in the past, into a single loan. By consolidating your loans, you may be able to extend the term of your loan which may lower your monthly payment. You can always prepay the loan as well so you can take advantage of lower scheduled monthly payments while paying the loan off as quickly as you are able.
There are several opportunities for loan forgiveness. Teachers may qualify for forgiveness of up to $17,500.00 or if you are a Public Service employee and make 120 consecutive payments, your remaining loan balance may be canceled. Your loan servicer will be able to assist you with loan forgiveness options.
All student loans offer deferments and forbearance if you are struggling with your loan payments. Servicers can also offer you a variety of payment plans that may better fit your income. It is best to contact your servicer directly to determine what options are available to you. If you are not sure who your servicer is, contact our office or go to https://nslds.ed.gov.
