Federal Direct Loan Program (FDLP)

Loans are awarded based on a student’s dependency status, financial need, cost of attendance, and grade level. Subsidized Loans are based on need and the federal government will pay the interest while the student remains enrolled at least half-time. Unsubsidized Loans are based on the student’s cost of attendance and other financial aid. These loans require the student to pay or accrue the interest while enrolled, although the principal amount of the loan is deferred. Repaymentperiod begins when you totally withdraw, drop below half-time, graduate or fail to enroll in at least six credit hours. Effective July 1, 2009, the interest rate for undergraduate students is a fixed 5.6% for Subsidized Federal Loans and a fixed 6.8% for Unsubsidized Federal Loans. For information on repaying student loans or deferments/forbearance visit www.studentaid.ed.gov. Students participating in the program are eligible for federal interest benefits. This means that the federal government will pay the interest due prior to the beginning of the repayment period.

To determine eligibility and financial need, students must complete, sign, and submit the FAFSA. A Loan Information Worksheet must be submitted to the financial aid office as early as possible, but not later than one month prior to the start of the period in which you intend to borrow. The Financial Aid Office will electronically transmit the loan request to the lender. Students requesting a loan are required to complete, sign, and submit a Master Promissory Note (MPN), complete the Entrance Counseling, and must be enrolled at least half-time (6 credit hours) before loan funds will be disbursed.

Federal Direct Loan Disbursements

Students entering their first year of undergraduate study who have not previously received a Direct Loan must have satisfactorily completed 30 regular (college-level, not remedial) semester hours or wait 30 days after classes begin before the first Direct Loan check can be disbursed. The 30 required semester hours may be completed at Northeast State, transferred from another institution, or a combination of both. Once your loan is processed and money received by Northeast State your money will be released after the census date of the term. Attendance must be confirmed in all of your classes. Each loan will be disbursed in two separate checks; one at the beginning and one at the midpoint of the loan period. Example: If you request a loan for one semester, you will receive two checks; one at the beginning of the semester, and one at the midpoint of the semester. If you request a loan for two semesters, you will receive one disbursement at the beginning of each semester.

Federal Parent PLUS Direct Loan Program

Federal Plus Loans are available to parents of undergraduate dependent students. This non-need-based federal loan program enables credit worthy parents to borrow up to the cost of education less any student financial assistance awarded for each child enrolled at least half-time in a postsecondary institution. The variable interest rate is established each July 1st. An origination fee of up to a maximum of 3% will be deducted from the loan disbursement. Loan proceeds are issued in multiple disbursements. Northeast State will issue a check for the remaining balance and the check will be mailed to the parent’s address as noted on the loan application after tuition charges are satisfied. Repayment begins 60 days after the loan is fully disbursed, and continues while the student is enrolled. The maximum repayment period is ten years. The interest rate is a fixed 7.9%.

Repayment of loans begins six months after the date the student ceases enrollment of at least a half-time basis. Three are various repayment plans offered by lenders. The standard repayment plan requires a fixed amount of a minimum of $50 per month for a period not to exceed 10 years; however, payment amounts will be based on the total loan amount. The interest rate may vary each year with an interest cap of 8.25%. For information on repaying student loans or deferments/forbearance click the topic, or visit www.studentaid.ed.gov. Students participating in the program are eligible for federal interest benefits. This means that the federal government will pay the interest due prior to the beginning of the repayment period. Contact the Financial Aid Office for more information.

For loan disbursement information go to Payment of Awards, Section 11-B. All borrowers must participate in entrance and exit loan counseling activities when notified by the Financial Aid Office at www.StudentLoans.gov 

Federal Direct Consolidation Loan Program

You may be able to combine your existing Federal education loans into one new consolidated loan that offers several advantages. For more information, visit the Direct Consolidation Loan Program-Borrower Services. 

Additional Information

Information about loan deferments, cancellations, payments, schedules, entrance/exit interviews, etc., may be obtained at www.StudentLoans.gov or by contacting the Northeast State Financial Aid Office.

The Federal Student Aid Ombudsman of the Department of Education works with borrowers to resolve loan disputes and solve other problems on an informal basis. The Ombudsman Office assists borrowers with:

• Direct Loans Subsidized and Unsubsidized Direct Student Loans, Direct PLUS Loans (for parents) and Direct Consolidation Loans;
• Federal Family Education Loans (FFEL) Subsidized and Unsubsidized Stafford Loans, PLUS Loans (for parents) and Consolidation Loans;
• Guaranteed Student Loans, SLS Loans and
• Perkins Loans. 

The Ombudsman Customer Service Line is: 1-877-557-2575