Graduate Direct Unsubsidized Loans
What are Direct Loans?
The Federal Direct Unsubsidized Loan is available through the the Federal Direct Loan Program to help both undergraduate and graduate students pay for their education. To receive federal loans for any term, a student must be enrolled at least half-time. Half-time enrollment is five hours for graduate or law students or six hours for professional Pharmacy students (PY2, PY3, and PY4).
The Direct Unsubsidized Loan
This loan is available to students regardless of income or need. With an unsubsidized loan, you are responsible for all interest that accrues during in-school, grace and deferment periods. You may choose to pay the interest portion only while in school, which would keep your loan balance at principal. If you choose to defer such payments, the interest will be capitalized, resulting in an increase in both total debt and the amount of monthly payments.
Advantages of the Direct Loan
- For loans with a first disbursement date prior to July 1, 2017, the interest rate is fixed at 5.31%. For loans with a first disbursement date on or after July 1, 2017, the interest rate is fixed at 6%.
- It carries low origination fees.
- Repayment of the loan does not begin until you graduate or drop below half-time status.
- In cases of economic hardship, payments may be deferred, extended, or reduced.
- The loan is forgiven in case of permanent disability or death
- Have online access to your Direct Loan account information via the federal servicer’s website.
- Can chose from several repayment plans and can switch repayment plans as desired.
Loans are usually issued for a single academic year, and both eligibility and amount are re-determined annually throughout your academic career.
Eligibility for the Direct Loan
Your Direct loan eligibility is determined by the Office of Financial Aid and is based on information you provided in the Free Application for Federal Student Aid (FAFSA).
Federal criteria include:
- Enrollment in an eligible school at least half-time in a degree program
- U.S. citizenship, permanent residency, or eligible noncitizen status
- Satisfactory academic progress (as determined by the Office of Financial Aid)
- No unresolved defaults or overpayments owed on Title IV educational loans and grants
- Satisfaction of all Selective Service Act requirements
How Much Can I Borrow?
Borrowing limits are based on your dependency status and year in school. You are considered independent if you will be working on a degree beyond a bachelor’s degree during the school year.
You can never borrow more than the cost of education, less other financial aid received (special rules apply for recipients of Americorps benefits). Below is the maximum amount you may borrow.
As a graduate student, your unsubsidized Direct loan annual eligibility is as follows:
The cumulative combined maximum for both undergraduate and graduate loans is $65,500 for subsidized only and $138,500 for unsubsidized and subsidized combined.
For loans with a first disbursement date prior to July 1, 2017, the interest rate is fixed at 5.31%. For loans with a first disbursement date on or after July 1, 2017, the interest rate is fixed at 6%.
For loans made on or after October 1, 2016, the origination fee is 1.069% of the principal loan amount.
The Application Process
Complete the Free Application for Federal Student Aid (FAFSA) online at www.fafsa.gov. Be sure to include the University of Mississippi’s school code 002440 on your application.
Disbursements of Funds
Before the Federal Direct Loan can disburse, the student must complete all of the following actions (in addition to maintaining eligibility for the award):
- Accept all or a part of the financial aid package by accessing their individual “Financial Aid Notification” online in the student’s MyOleMiss portal.
- Complete Loan Entrance Counseling (or request alternate counseling options from the OFA). Financial aid advisors are available during regular business hours to answer questions at the completion of the counseling session.
- Complete the Master Promissory Note.
Funds will credit first to your Bursar bill and any excess funds will be mailed to your permanent address or directly deposited to your personal account.
Section 479A(c) of the Higher Education Act, as amended (HEA), and the Direct Loan Program regulations give the OFA the authority to refuse to originate a Direct Loan or to reduce the amount of an individual borrower’s eligibility for a Direct Loan. Any such determination is made on a case-by-case basis. The decision will be provided to the student or parent borrower in writing and documentation supporting the determination and retained in the student’s file.
Per federal regulation, loans may be disbursed up to 10 days prior to the semester in which they are allotted. Generally, the OFA will disburse loan amounts 3-5 days prior to the beginning of the semester. During the semester, the OFA will disburse loan funds on a daily basis as eligible.
When a disbursement is made to the bursar account, students are notified by email. In that email, they are informed that borrowers have the right to cancel all or a portion of their Direct Loan(s) at any time within 14 days of disbursement. To exercise this right, the borrower must contact the OFA in writing. Although cancellation may be possible after 14 days, UM cannot process a loan cancellation if more than 120 days have lapsed since disbursement. In addition, unless the funds are paid back to UM by the borrower, the school is not required to return any portion of a loan that was delivered as a refund to the student or parent as a result of a credit balance.
Borrowers Rights and Responsibilities
Students who decide to accept a Federal Direct Loan have certain rights and responsibilities. To learn more, go to: https://finaid.olemiss.edu/borrowers-rights-and-responsibilities/.
National Student Loan Data System (NSLDS)
NSLDS is the Department Of Education’s (DOE) central database for Federal Title IV student aid (including Pell Grants, Iraq and Afghanistan Service Grants, TEACH Grants, Direct or Perkins Loans). If students receive funding under any of these programs, information related to those awards will be provided by UM to NSLDS and shall be accessible to eligible guaranty agencies, lenders, and colleges as authorized by DOE. Students may view their own data on NSLDS at nslds.ed.gov.