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Federal Direct Student Loan Programs

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What is the FDSLP?

Congress established the William D. Ford Federal Direct Student Loan Program (FDSLP) to reduce complexity within the financial aid process. FDSLP is a federal loan program that includes the William D. Ford Federal Direct Stafford Loans both subsidized and unsubsidized.

The difference between the FDSLP and the traditional Federal Family Education Loan Program is that the FDSLP does not involve the use of a private lender such as a bank. You are borrowing from the federal government and the money is disbursed directly to your Mercer County Community College student account.

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Applying for a Federal Direct Loan

When you complete the Free Application for Federal Student Aid or the Renewal Free Application for Federal Student Aid, you are applying for all of the aid programs for which you may be eligible and taking the first step toward your direct loan application.

To request a student loan, you must file your fafsa, wait for a response, register for minimum of 6 credits and then go to your ‘my mercer portal” on our web site at www.mccc.edu/mymercer and click on “web advisor for students”. You may then apply online. Be sure that your electronic entrance quiz and promissory note are completed at www.studentloans.gov

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Federal Direct Student Loan Limits

For Direct Subsidized Loans and Direct Unsubsidized Loans, there are limits on the maximum amount you may borrow for the academic year (annual loan limits) and the maximum amount you may borrow in total for undergraduate and graduate study (aggregate loan limits).

Annual Loan Limits for Direct Subsidized and Direct Unsubsidized Loans
spacer Dependent Students
(except for students whose parents cannot borrow PLUS loans)
Independent Students
(and dependent students whose parents cannot borrow PLUS loans)
1st-year undergraduate $5,500
(maximum $3,500 subsidized)
$9,500
(maximum $3,500 subsidized)
2nd-year undergraduate $6,500
(maximum $4,500 subsidized)
$10,500
(maximum $4,500 subsidized)

The actual loan amount you are eligible to receive will be determined by your school, and it is based on your academic level, whether you are dependent or independent, and other factors such as:

  • The length of your term and program
  • Your cost of attendance
  • Your Expected Family Contribution (EFC)
  • Other financial aid you receive; and
  • Your remaining eligibility under the annual and aggregate loan limits.

The actual amount you receive for an academic year may be less than the maximum annual amount shown in the chart above.

The annual loan limits include both Direct Subsidized and Direct Unsubsidized Loans, and any subsidized or unsubsidized Federal Stafford Loans you received through the Federal Family Education Program (FFEL) for the same academic year period.

Consistent with federal regulations, Federal Direct Student Loans have an origination fee currently of 1.073 percent that is deducted from the amount borrowed. This is called the origination fee.

For any loan disbursment for a loan where the first disbursment is/will be... The original fee percentage for Direct Subsidized and Direct Unsubsidized Loans is...
On or after 7/1/2013 and before 12/1/2013 1.051%
On or after 12/1/2013 and before 10/1/2014 1.072%
On or after 10/1/2014 and before 10/1/2015 1.073%
On or after 10/1/2015 and before 10/1/2016 1.068%

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Interest Rates

The interest rate on Stafford loans first disbursed beginning July 1, 2014 is fixed at 4.66%

Interest rates on subsidized Stafford loans for undergraduate students will continue to adjust downward according to the following schedule:

  • 3.4 percent for loans first distributed July 1, 2011 to July 1, 2012
  • 3.4 percent for loans first distributed July 1, 2012 to July 1, 2013
  • 3.86 percent for loans first distributed July 1, 2013 to July 1, 2014
  • 4.66 percent for loans first distributed July1, 2014 to July 1, 2015
  • 4.29 percent for loans first distributed July1, 2015 to July 1, 2016

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General Requirements

Once you are awarded a Federal Direct Student Loan, you must fulfill certain conditions before loan dollars can be credited to your account. These include, but may not be limited to:

Loan Entrance Counseling Quiz An Entrance Interview is actually an electronic counseling session which is designed to help you better understand your obligation as a borrower and provides other useful information on the loan process. Entrance Interviews are usually required of first time borrowers, and you will be notified if you are required to attend one. The Entrance Interview can be completed online at www.studentloans.gov.

Signing the Master Promissory Note The Direct Loan Master Promissory Note is to be completed online at www.studentloans.gov. If you accept the loan, complete the note in full and submit online. This is usually a one-time requirement.

Finally, you must meet all other criteria applicable to the federal aid programs in general, such as enrollment (6 credits or above), good standing, citizenship or permanent residency, financial aid transcripts on file, and supply any other relevant documentation requested by the aid office.

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Using Your Loan to Pay Your Term Bill

Your Federal Direct Student Loan will show as a financial aid credit on your schedule once your signed promissory note is received by the Financial Aid Office. Term bills are sent out in July for the Fall term, and in November for the Spring term. This credit, as well as any other financial aid credits, can be applied against the charges itemized on the bill.

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Refund Checks

If a student has a late start classes and at the time of the disbursement the enrollment is less than 6 credits the loan may be held until 14 days after the beginning of the late start classes.

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Exit Counseling

Students that received Federal Student Loans and are now planning to:

  • graduate
  • leave school
  • or drop below half-time (6 credits)

must complete Exit Counseling at studentloans.gov.

An exit counseling session is a loan counseling session that provides loan repayment, grace period, billing options information and collects updated borrower information. These online exit counseling sessions provide the borrower with the rights and responsibilities of a Federal loan recipient. If you received a Federal Direct Subsidized loan and/or Federal Direct Unsubsidized loan you must complete an Exit counseling session online at studentloans.gov website. Exit Counseling information is available also at the Financial Aid office in the Student Center room 2013 or email us at finaid@mccc.edu.

Important note: Students completing Exit Counseling are encouraged to access the National Student Loan Data System or nslds.ed.gov in order to retrieve and review loan information, especially if the student believes they have multiple lenders or grant awards. The National Student Loan Data System is the U.S. Department of Education’s central database for student aid. NSLDS receives data from schools, guaranty agencies, the Direct Loan Program, and other Department of Education programs. NSLDS provides a centralized, integrated view of Title IV loans and grants so that recipients of Title IV Aid can access and inquire about their Title IV loans and/or grant data.

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Loan Repayment

Students who borrow a Federal Direct Student Loan and have borrowed a Federal Stafford Loan in the past, can have their loans consolidated so that they will be making only one payment. Loan consolidation will be made at the request of the student when entering repayment. The college will provide more information to you regarding this option during the semester or visit www.studentloans.gov or www.nslds.ed.gov/nslds_SA for account information.

Loan repayment begins six months after you leave school or cease to be enrolled on at least a half-time basis. These six months are referred to as a grace period.

The federal government offers various loan repayment options listed below.

  • The standard loan repayment plan requires fixed monthly repayment amount paid over a fixed period of time.
  • The extended repayment plan assumes a fixed annual repayment amount paid over an extended period of time.
  • The graduated repayment plan establishes annual repayment amounts at two or more levels. Repayments are paid over a fixed or extended period of time.
  • The income contingent repayment plan calls for varying annual repayment amounts based on the Adjusted Gross Income (AGI) of the borrower over an extended period of time, as determined by the U.S. Department of Education.

While you are enrolled in school (6 credits or above), no payments are due on the subsidized Federal Direct Student Loan, and no interest accrues (unless you are repaying a previous loan and are enrolled less than part time).

The grace period for the unsubsidized Federal Direct Student Loan is the same as the subsidized, but you must continue to pay the interest on the loan while in school and in the the grace period.

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Additional Information

The information in this fact sheet is subject to change without notice. The information was accurate at the time it was printed. Further changes to laws or regulations may make some of the information incomplete or inaccurate.

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FATV Answers on Demand

Loan Overview

Know Your Loans

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