Federal Direct Loans

Subsidized and Unsubsidized Loans

Federal Direct Subsidized and Unsubsidized Loans are federal student loans for eligible students to help cover the cost of higher education, and are the department's major form of self-help aid. To receive Federal Direct Loans (also called Stafford Loans or Stafford Direct Loans) you must:

*Half-time is 6 credits for undergraduate students, or 5 credits for graduate students. Graduate students must be enrolled in graduate courses to be eligible for Federal Direct Loans. Undergraduate courses will not be covered by federal funds.

What is the difference between a Subsidized and Unsubsidized loan?

  • Direct Subsidized Loans: Interest is not charged while you are in school at least half-time, during your grace period, or during deferment periods. To receive a Direct Subsidized Loan, you must have financial need. Your school will determine if you are eligible after you complete the FAFSA.
  • Direct Unsubsidized Loans: Interest is charged during all periods, including while you are in school and during grace and deferment periods.

Parent / Graduate PLUS Loans

There are two types of PLUS Loans:

A request for either type of PLUS Loan is 4–step web form that is used in place of a paper process. To apply for the Parent PLUS Loan, the parent of the undergraduate student must sign in to StudentLoans.gov with his/her Federal Student Aid ID (FSA ID). A parent who does not have an FSA ID can request one via the Federal Student Aid ID web site (fsaid.ed.gov). The student for which the loan is being applied must be enrolled at least half-time (6 credits).

The process of applying for a Graduate PLUS Loan is the same, except for the fact that the student is the borrower. The graduate student must be enrolled at least half-time (5 graduate credits).

Accepting Your Federal Direct Loans

William Paterson University participates in the Active Acceptance of Direct Loans. This means that students must sign into WP Connect to accept or decline their Federal Direct Student Loans. You will be presented with three options: (1) accept the full award, (2) decline all awards, or (3) accept partial awards.

If you choose to accept any Federal Loans, there are additional steps required, to completed at studentloans.gov:

Step 1: Entrance Counseling

  • If you have not previously received a Direct Loan, the Federal Government requires you to complete entrance counseling to ensure that you understand the responsibilities and obligations you are assuming.
  • If you are an undergraduate student, entrance counseling will fulfill counseling requirements for Direct Subsidized Loans and Direct Unsubsidized Loans.
  • If you are a graduate or professional student, entrance counseling will fulfill counseling requirements for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans.

Step 2: Master Promissory Note (MPN)

  • The Subsidized/Unsubsidized Master Promissory Note (MPN) is a legal document in which you promise to repay your federal student loan(s) and any accrued interest and fees to your lender or loan holder. There is one MPN for Direct Subsidized/Unsubsidized Loans and a different MPN for Direct PLUS Loans. Most schools are authorized to make multiple federal student loans under one MPN for up to 10 years.

Loan Reinstatement and/or Cancellation

  • Loan Cancellation/Reduction Form (adjust or cancel your Federal Loans)
    • Please be advised if the above-requested reduction or cancellation produces a balance with the University, you are responsible and must submit your payment to Student Enrollment Services.
  • Loan Reinstatement Form (reinstate your Federal Loans)

Exit Counseling

Prior to graduating or leaving school, Stafford Loan borrowers and recipients must complete exit counseling at StudentLoans.gov. The Stafford Loan Exit Counseling will explain your rights and responsibilities as a Stafford Loan borrower. The session takes 30-40 minutes to complete.

Loan Limits & Interest Rates

Dependent Students Annual Loan Limits
Freshmen $5,500 ($3,500 subsidized/$2,000 unsubsidized)
Sophomores $6,500 ($4,500 subsidized/$2,000 unsubsidized)
Juniors & Seniors $7,500 ($5,500 subsidized/$2,000 unsubsidized)
Independent Students Annual Loan Limits
Freshmen $9,500 ($3,500 subsidized/$6,000 unsubsidized)
Sophomores $10,500 ($4,500 subsidized/$6,000 unsubsidized)
Juniors & Seniors $12,500 ($5,500 subsidized/$7,000 unsubsidized)
Graduate or Professional $20,500 (unsubsidized)
Lifetime Limits
Undergraduate Dependent $31,000 (Up to $23,000 may be subsidized)
Undergraduate Independent $57,500 (Up to $23,000 may be subsidized)
Graduate or Professional $138,500 or $224,000 (for Health Professionals)
Interest Rates for Loans Disbursed on or after July 1, 2018 and prior to July 1, 2019
Loan Type Borrower Type Fixed Interest Rate
Direct Subsidized Loans Undergraduate Students 5.05%
Direct Unsubsidized Loans Undergraduate Students 5.05%
Direct Unsubsidized Loans Graduate/Professional Students 6.60%
Direct PLUS Loans Graduate/Professional Students and Parents of Dependent Undergraduate Students 7.60%

Federal Student Loan Disclosure Statement:

HEOA Sec. 489 amended HEA Sec. 485B(d)(4) (20 U.S.C. 1092b)

Any student or parent wishing to borrow a Title IV loan (Federal Direct Stafford, Graduate Plus, or Parent Plus) should be aware that their loan information is reported to the National Student Loan Data System (NSLDS).  Authorized agencies, lenders, and post-secondary institutions may have viewable access to this information.