Federal Direct Student Loan Program
Daytona State College participates in the William D. Ford Federal Direct Student Loan program, which offers long-term, low interest loans from the U.S. Department of Education. This is the largest federal aid program and the one you're most likely to find in your aid offer.
Note: Students must be enrolled at least half-time to be eligible for a direct loan disbursement.
Subsidized and Unsubsidized Loans
There are two types of Federal Direct Student Loans: subsidized and unsubsidized. The primary difference is the point at which interest begins to accrue. Your financial aid award may include a combination of subsidized and unsubsidized loans. For example, a freshman with a subsidized loan of $500 may also receive an offer of an unsubsidized loan for $3,000 to meet the annual limit for a freshman.
No interest will accrue on a subsidized loan, and no principal will be due until the end of the six-month grace period that will begin when you graduate, leave the university or drop below half-time enrollment (6 credits). Subsidized loans are awarded to undergraduate students who demonstrate financial need.
For first-time borrowers applying for Direct Subsidized Loans on or after July 1, 2013, there is a limit on the maximum period of time (measured in academic years) that you can receive such loans. If this limit applies to you, you may not receive Direct Subsidized Loans for more than 150 percent of the published length of your program. This is called your "maximum eligibility period." You can find the published length of any program of study in Daytona State College's course catalogs.
Interest on an unsubsidized loan begins on the day the loan is disbursed and continues
until the day that you repay the loan in full. You can pay the accumulating interest
while you are in school; during the grace period; during deferment; or you have the
option of capitalizing the interest (adding unpaid, accumulated interest to the total
unsubsidized amount borrowed when you begin repayment). Capitalizing the interest
may give you a way to postpone making interest payments, but it also increases the
total cost of your unsubsidized loan.
What is a Federal Direct Subsidized Loan?
Annual and Aggregate Loan Maximums
Direct Loan Annual Limits
The amount you can borrow annually depends on your grade level, as determined by your earned units.
|Grade Level||Earned Credits||Dependent Undergraduate Student||Independent Student|
|Freshman||0-29||$5,500--a maximum of $3,500 can be subsidized||$9,500--a maximum of $3,500 can be subsidized|
|Sophomore||30-59||$6,500--a maximum of $4,500 can be subsidized||$10,500--a maximum of $4,500 can be subsidized|
|Junior||60-89||$7,500--a maximum of $5,500 can be subsidized||$12,500--a maximum of $5,500 can be subsidized|
|Senior||90+||$7,500--a maximum of $5,500 can be subsidized||$12,500--a maximum of $5,500 can be subsidized|
|Subsidized and Unsubsidized Aggregate Loan Limit||N/A||$31,000--no more than $23,000 of this amount may be in subsidized loans||
$57,500 for undergraduates--no more than $23,000 of this amount may be subsidized loans.
$138,500 for graduate or professional students--no more than $65,000 of this amount may be in subsidized loans (the graduate aggregate limit includes all federal loans received for undergraduate study)
You are independent if you meet at least one of the following conditions:
- Are 24 years of age of older;
- Enrolled in a masters or doctorate program;
- Legally married at the time you sign your FAFSA application;
- Have children or other dependents who receive more than half of their support from you now and through June 30 of the year in which you receive financial aid;
- Have legal dependents other than a spouse or children who receive more than half their support from you;
- Are a foster child, or ward of the court after the age of 13;
- Are a legally emancipated minor with documentation of the court judgment (emancipated minor is a formal legal status that must be declared in a court of law. Simply moving out of your parents' household does not count. A judge must legally declare you emancipated. The court order must still be in effect when you file your FAFSA);
- Are in legal guardianship as determined by a court;
- Are homeless (Homeless is defined as lacking fixed, regular, adequate housing. This includes living in shelters, hotels, cars, etc.);
- Are a veteran of the Armed Forces;
- Are currently serving on active duty in the Armed Forces for other than training purposes.
The Cost of Borrowing
You will pay 1.066% of your Direct Loan proceeds to the U.S. Department of Education
as a loan origination fee for loans disbursed on or after October 1, 2017 and before
October 1, 2018. You will pay 1.062% of your Direct Loan proceeds as a loan origination
fee for loans disbursed on or after October 1, 2018 and before October 1, 2019. This
fee will be deducted from each disbursement before it is credited to your College
The Interest Rate
|Loan Type||Borrower Type||
Loans first disbursed on or after
July 1, 2017 and before July 1, 2018
Loans first disbursed on or after
July 1, 2018 and before July 1, 2019
|Direct Subsidized Loan||Undergraduate||4.45%||5.05%|
|Direct Unsubsidized Loan||Undergraduate||4.45%||5.05%|
Entrance Loan Counseling
When you are a new borrower of a Federal Direct Student Loan at Daytona State College, you must complete an entrance loan counseling session so that you will know your rights and responsibilities as a borrower. The online session will take you about 20 minutes to complete. You will only need to complete this information once.
In addition to the online session, please read the Entrance Counseling Addendum regarding the Time Limitation on Direct Subsidized Loan
Eligibility for First-Time Borrowers on or after July 1, 2013.
What is a Master Promissory Note?
Borrowing from the Direct Loan program requires the completion of an Electronic Master Promissory Note. While attending Daytona State College you can use the E-MPN for multiple loans over one or more academic years. You will only need to complete this information once.
A student's eligibility for financial aid is partially based on the enrollment status as well as the start date of classes. Students should be aware that certain courses have staggered or irregular start dates (A and B sub-sessions) that are not the same as the beginning of the standard semester. Students enrolled in these courses are not eligible to receive the funds until the classes are in progress and enrollment can be verified. This means that funds will be held until enrollment is verified for B term or late start course(s). For example: Since a student must be enrolled at least half time (at least 6 credits) in order to receive loan funds, if you are enrolled for 3 credits in Term A and 3 credits for Term B, your loan funds will not be disbursed until after Term B begins and your enrollment is verified. If you are enrolled for 6 credits for Term B only, your loan funds will not be disbursed until after Term B begins and your enrollment is verified.
Important Information For First-Time Borrowers:
Beginning with the 2015-2016 academic year, the Moving Ahead for Progress in the 21st Century Act established a time limit on Direct Subsidized Loan eligibility for first-time borrowers. A first-time borrower is a student who has no outstanding balance of principal or interest on a Direct Loan or FFEL (Federal Family Education Loan) as of July 1, 2014, or the date the borrower obtains a Direct Loan after July 1, 2014.
First-time borrowers will no longer be eligible for a Direct Subsidized Loan once
the student has received the Direct Subsidized Loan for a period that is 150 percent
of the published length of the student's current educational program (as determined
by years). Below are examples of the 150-percent maximum eligibility periods for Daytona
State College degree and certificate programs:
|Program Length||Maximum Eligibility Period|
|4-year bachelor degrees||x 1.5||6.0 years|
|2-year associate degrees||x 1.5||4.0 years|
|1-year certificate program||x 1.5||1.5 years|
A first-time borrower who loses eligibility for additional subsidized loans as a result of reaching the maximum eligibility period also loses the interest subsidy on subsidized loans received on or after July 1, 2014 for all periods if the student did not complete the program and continues enrollment in the same program or enrolls in another program of the same or shorter length. The loss of the interest subsidy would be effective on the date of the continued or new enrollment.
Please Note: The determination of the 150-percent limit on Direct Subsidized Loan
eligibility is not the same as the financial aid standards of satisfactory academic
progress maximum time frame of 150 percent for completion of a degree or certificate
program. The financial aid standards of satisfactory academic progress maximum time
frame is based on 150 percent of the program length as determined by total attempted
You will begin to repay your loan at the end of a six-month grace period that begins when you graduate, leave school, or drop below half-time enrollment (6 credits). Learn more about loan repayment.
Federal Direct Parent PLUS Loan
Learn about this Federal loan program for parents to finance your student's education at Daytona State College.
Daytona State College participates in the William D. Ford Federal Direct Parent Loan for Undergraduate Students Program, known as the Direct Plus Loan. A Parent PLUS loan enables a parent to borrow for his or her dependent child. The U.S. Department of Education is the lender.
The interest rate for PLUS loans disbursed on or after July 1, 2017, and on or before June 30, 2018, is 7.00 percent. Loans disbursed on or after July 1, 2018 and on or before June 30, 2019, will have an interest rate of 7.60 percent. A 4.264 percent origination fee will be deducted by the U.S. Department of Education from the total of the Parent PLUS loan before it is disbursed to your student account for loans disbursed on or after October 1, 2017 and before October 1, 2018. A 4.248 percent origination fee will be deducted by the U.S. Department of Education from the total of the Parent PLUS loan for loans disbursed on or after October 1, 2018 and before October 1, 2019.
How to Apply
If you are interested in borrowing a Parent PLUS loan, you must first complete the Free Application for Federal Student Aid (FAFSA). Then, the Federal Direct Parent PLUS Loan application must be completed through studentloans.gov. You will need to sign in using your FSA ID, which is the same account used to complete your FAFSA. You can create or manage your FSA ID through Federal Student Aid.
The studentloans.gov website gives you the option of applying to up to three institutions per dependent child and for multiple children during one application process. The site will also securely store your information to help streamline the process for future applications.
After you have completed the online application, the Department of Education will process the application and credit approval. Daytona State College typically receives this information within two business days.
As the parent of a dependent student, you may use a PLUS loan to assist your student with their educational expenses.
Through the application process, the U.S. Department of Education will determine if you are a credit-eligible borrower. Once a determination of your eligibility is made, you will be informed if you have been approved or denied for a PLUS loan.
Applicants with adverse credit history may be eligible for a PLUS loan if they have extenuating circumstances or are able to obtain an endorser for the loan. These applicants will be required to complete PLUS Credit Counseling. UMUC cannot disburse loan monies to students with this requirement until we have received confirmation of its completion.
Should the U.S. Department of Education deny your application, Daytona State College will be notified by the Department of Education, and your son or daughter may be eligible for an additional Federal Direct Unsubsidized Loan. Eligibility for the additional unsubsidized loan is reviewed automatically upon receipt of the PLUS denial and your son or daughter can choose to accept or decline the loan through MyDaytonaState.
To be eligible for disbursement, the student for whom you borrow must meet all general eligibility requirements, including being enrolled in at least half-time status (6 credit hours).
You do not have to demonstrate financial need to borrow a PLUS Loan. The maximum amount you can borrow through the PLUS program equals the cost of attendance (COA) minus any other financial aid awarded to your son or daughter for the current academic year. If you are approved for a PLUS loan, Daytona State College will offer a loan in the amount of $10,000 or the difference between the COA and all other awarded financial aid, whichever is lower.
Note: You do not have to borrow the full amount of the PLUS Loan offered. If you would like to decrease the amount of the loan, your son or daughter can do so through MyDaytonaState.
Master Promissory Note
First-time PLUS borrowers are required to complete an MPN. You will only need to complete this once, unless your loan is approved with an endorser. Endorsed loan borrowers must complete a new MPN for each new endorsed loan. Complete your MPN here.
The Office of Student Accounts will credit loan proceeds to the student's account to pay tuition and other college charges. Remaining funds will refund to you or (with your permission) directly to the student. If you would like to allow the refund to go directly to your son or daughter, you can indicate your preference at the time you complete the PLUS loan application.
The repayment period for principal and interest begins after the loan has been fully disbursed. For example, a loan covering the fall and spring terms will enter repayment after the disbursement for the spring term. The first payment becomes due within 60 days after the final loan disbursement of loan proceeds for an academic year.
You will have three repayment options:
- The standard repayment plan requires even monthly payments of at least $50 over a fixed period of up to 10 years. This plan usually results in the lowest total interest paid because the repayment period is shorter than under the other plans.
- The extended repayment plan allows loan repayment over a period of up to 25 years, depending on the total amount borrowed. You still pay a fixed amount each month (at least $50), but the monthly payments usually will be less than under the standard repayment plan. This may make the repayment more manageable; however, usually you will pay more interest because the repayment period is longer.
- The graduated repayment plan allows payments to start out low and increase every two years. Your monthly payments must be at least half of what you would pay under standard repayment. The repayment period is up to 10 years, depending on the total amount borrowed. Again, you may find it easier to manage the lower monthly payments; however, you will pay more interest because the repayment period will be longer.
Note: You can prepay all or a portion of your loan at any time without penalty.
If your Direct PLUS loan was first disbursed on or after July 1, 2008, you may defer payment on the loan while the student for whom you obtained it is enrolled at least half time, and for an additional six months after the student graduates or drops below half-time enrollment. You must request each deferment period separately.
If you're a parent PLUS borrower who is also a student, you can defer repayment while
you're enrolled in school at least half time for an additional six months after you
graduate or drop below half-time enrollment for Direct PLUS Loans first disbursed
on or after July 1, 2008.
Additional Information on Borrowing
You can estimate your monthly payments with various repayment plans using repayment calculators available online from the U.S. Department of Education. The site also contains information on consolidating your PLUS loan(s) with other personal loans or discharging your loan under specific circumstances.
For more information on the cost of borrowing or repayment, call the Federal Student Aid Information Center at 800-4FEDAID.