Please note that you cannot borrow any amount you wish, refer to your financial aid award letter or the chart below for the maximum amount you can borrow each year (the amount will be split evenly between the two semesters) for your student loan.
Students that wish to complete a loan for the 2020-21 academic year will need to complete three main steps:
- Complete Entrance Counseling (First-time Borrowers) https://studentaid.gov
- Complete a Loan Agreement/Master Promissory Note (MPN) for a Subsidized/Unsubsidized Loan (First-time Borrowers) https://studentaid.gov
- Complete and submit the Direct Loan Request Form (LRF) (All Borrowers)
Federal Direct Student Loan Program for the 2020-21 Academic Year
A federal direct loan is a government guaranteed loan offering low interest rates and deferred payment options. There are two types of these loans - subsidized and unsubsidized.
Eligibility for a Federal Direct Student Loan
To be eligible, you must:
- Be a U.S. citizen or eligible non-citizen
- Have a high school diploma or GED/Indiana High School Equivalency Diploma
- Not be in default on any other student loans
- Be enrolled at least half time in an accredited degree program
- Complete the FAFSA (Free Application for Federal Student Aid) each year
Subsidized Federal Direct Loans
Students that meet certain financial need criteria may qualify for a Subsidized Federal Stafford Loan. The federal government pays the interest on the subsidized loan while students are enrolled at least half time, during the six-month grace period, and when they qualify for an authorized deferment.
Unsubsidized Federal Direct Loans
Students who do not qualify for a Subsidized Direct Loan may be eligible for an Unsubsidized Direct Loan. The federal government does not pay the interest on an unsubsidized loan. Students have the option of paying the interest while they are in school or they can choose to have the interest added to their principal balance through a process called capitalization.
Federal Direct Student Loan Annual Limits for the 2020-21 Academic Year
|Dependent Students||Base||Additional Unsubsidized||PLUS Loan Denial Subsidy*||Annual Maximum Amount|
* Dependent students with a parent that has been denied a PLUS loan may be eligible for the unsubsidized PLUS loan denial subsidy. Please contact us for additional details.
|Independent Students||Base||Additional Unsubsidized||Annual Maximum Amount|
The interest rate under the Federal Direct Student Loan program for undergraduate loans disbursed on or after July 1, 2020 and before July 1, 2021 is 2.75% fixed for subsidized loans and unsubsidized loans. Interest rates are subject to change July 1 of each year.
Your loan payments may be deferred until six months after graduation or six months after you cease to be enrolled at least half time. You typically have 10 years to pay off your Federal Direct Student Loan. There are no prepayment penalties on a Federal Direct Student Loan.
For loans first disbursed prior to October 1, 2020 there will be a loan origination fee of 1.059% of the loan amount. Therefore, 1.059% is deducted from each loan disbursement. For loans first disbursed between October 1, 2020 and before October 1, 2021 the loan origination fee is 1.057%.
Disbursement of the Loan
For academic-year loans, the first disbursement will be paid at the beginning of Fall Term and the second disbursement at the beginning of Winter/Spring Term. For single-term loans, the disbursement will be paid at the beginning of the term.
Loan proceeds are provided directly from the federal government to Hanover College on behalf of the borrower. Proceeds will be applied to any outstanding educational charges including tuition, fees, room and board. The Office of Financial Aid will notify the borrower when the disbursement is received. If the loan proceeds create a credit balance, the borrower will need to contact the Business Office to receive a refund and/or a book voucher; the borrower should contact the Office of Financial Aid to use any credit balance to return loan funds to the federal government.
Your Federal Direct Student Loan Information
https://studentaid.gov - View your Federal Loan borrowing information.
Please note that you cannot borrow any amount you wish, refer to your financial aid award letter or the chart above for the maximum amount you can borrow each year (the amount will be split evenly between the two semesters) for your student loan.