Federal Direct Unsubsidized Stafford Student Loans

A Federal Direct Unsubsidized Loan is not based on your financial need. It is available to you through the William D. Ford Federal Direct Loan Program, if your Estimated Cost of Attendance (COA) is greater than your financial aid and you have not reached your annual maximum loan limit through the Federal Direct Subsidized Loan. The interest rate for Federal Direct Unsubsidized loans disbursed on or after July 1, 2006 is fixed at 6.8%. You are charged interest on this loan from the time the loan is disbursed until it is paid in full. If the interest is allowed to accumulate, the interest will be added to the principal amount of the loan and increase the amount to be repaid. 

Comparing Fees - FFELP/Direct Loans

0.5% fees will be deducted from the gross amount of loan borrowed, so parents need to take that into consideration when determining the amount to borrow. By law, the total origination fee is 2%; however, Direct Loans currently offer a 1.5% rebate on this origination fee. If you fail to make 12 on-time monthly payments, a charge for the difference between the 0.5% origination fee and the 2.0% origination fee will be added to the outstanding balance of the loan.

Please note: As you can see, students in the DL Program will have a 0.5 fee deducted from their loan amount. (Example: If you borrow $4,500, you will actually receive $4,477.50 or $22.50 less). Another 1.5% fee will be deferred until you go into repayment. After you make your first 12 loan payments, the 1.5% will not be applied to your loan balance. There may be a few lenders in the FFEL Program who are still able to offer a zero-fee loan, but not likely for longer than the next year. Many banks will start charging the full 2% fee. Congress is phasing out the loan origination fee, so by the year 2010-11 no federal loans will have this fee. Banks are allowed to charge up to 1% in a default fee and that will likely continue. The DL Program will not charge more than the 0.5% default fee. We know that many students who borrowed with the FFEL Program over the past few years have been accustomed to a loan with no fees. It is important to know that the current crisis in the financial market will limit the ability of lenders to offer these discounted fees. Thus, the fees in both programs will become comparable in the next two years.

Receiving Federal Direct Stafford Loan Funds

It is important to know that loan funds will automatically credit to your student account if the Direct Loan Processor has a valid MPN on file for you and you have completed "Loan Entrance Counseling".

Customer Service

For general information about the Federal Direct Stafford Loan, please call the Enrollment Services Center at 719-502-3000 for more information.

Stafford Loan Limits 

*Maximum amount that may be subsidized.

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