Federal Direct Student Loans

You apply for the Federal Direct Stafford Loan by filing the Free Application for Federal Student Aid(FAFSA) for each aid year.The IU Kokomo school code is 001814. To maximize your consideration for all types of financial aid, you need to file the FAFSA each year by the March 10 Priority Application Receipt deadline.

Details

• Interest rates:
  • For loans first disbursed on or after July 1, 2008; fixed interest rate of 6.8%.
  • For subsidized loans to undergraduates disbursed on or after July 1, 2008; the interest rate is fixed at 6.0 percent.
• Origination fee of .5% assessed by the Direct Loan servicer.
• Two types of Federal Direct Stafford Loan:
  • Subsidized: a need-based loan with the U.S. Department of Education paying the interest while you are enrolled at least
    half-time.
  • Unsubsidized: a non-need based loan with interest accruing on the loan after disbursement.
• Repayment does not begin until six months after the student graduates or drops below half-time enrollment.
• Master promissory note (MPN) and Entrance Counseling:
  • After receipt of your Financial Aid Notification and acceptance of the loan via OneStart Self-Service, a signed Master Promissory Note for Federal Direct Stafford Loan and Entrance Counseling must be completed for funds to be disbursed.
  1.  
     1. The Master Promissory Note is valid for ten year so continuing students are only required to complete these step if they choose
        to change lenders or the ten year limit expires.
     2. A student must be enrolled at least half-time (undergraduate students: 6 semester hours / graduate students: 4 semester hours) to be eligible.
• Federal Direct Stafford Loan eligibility is limited by federal aggregates:
• Federal Direct Stafford Loans must be awarded before the final day of the semester. Students are responsible to complete the FAFSA and to resolve any issues to allow adequate time to determine financial aid eligibility and to award financial aid.  
• Problems repaying Federal Direct Stafford Student Loans?  Options available to you are deferment or forbearance

Entrance Counseling and Master Promissory Note

New Federal Direct Lending borrowers must complete Entrance Counseling and sign a Master Promissory Note.
You need to complete these steps online.

1. Federal Direct Lending Entrance Counseling
2. Federal Direct Loan Program electronic Master Promissory Note