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Federal Direct Loans

The U.S. Department of Education offers low-interest loans to eligible students to help assist with the cost of the student's education.  

The Federal Direct Loan amount in the financial aid award letter is an estimate based on enrollment status, demonstrated need from the FAFSA, and grade level.

Federal Direct Loan Application Process 

  1. Complete the FAFSA every year. 
  2. Sign a Master Promissory Note and complete loan Entrance Counseling online at www.studentloans.gov (a one-time requirement, not every year).

Students who do not wish to use federal loan funding are required to submit our request to decline federal loan funding form. The form must be hand signed by the student and turned in via Cabrini-E-mail, Fax or mail to the Financial Aid Office. This is effective for the 2019-20 academic year. 


Subsidized and Unsubsidized Loans

Subsidized and unsubsidized loans are federal student loans for eligible students to help assist with the cost of the student's education. In short, subsidized loans have slightly better terms to help out students who demonstrate financial need. 

  • Subsidized loans allow students to defer principal payments and have interest paid by the federal government while studying, for a six-month grace period upon leaving school, and during a period of deferement (a postponement of loan payments).
  • Unsubsidized loans allow for deferment of principal payments only; interest will accrue immediately and be added to the repayment total, due after the six-month grace period.
    • Students with unsubsidized loans are strongly encouraged to make monthly interest payments while in school.
    • Otherwise, the deferred interest will be capitalized, and this accrued amount will be added to the loan principal when repayment begins.
    • Contact your loan servicer to set up interest payments.

Federal law determines the interest rates each year based on current market rates. However, interest rates are fixed for the life of the loan.   

  • Subsidized Direct Loans carry a fixed interest rate of 4.45% on undergraduate loans for loans disbursed on or after July 1, 2017.

  • Subsidized Direct Loans carry a fixed interest rate of 5.05% on undergraduate loans for loans disbursed on or after July 1, 2018
  • Unsubsidized Direct Loans carry a fixed interest rate of 4.45% on undergraduate loans originated on or after July 1, 2017.

  • Unsubsidized Direct Loans carry a fixed interest rate of 5.05% on undergraduate loans originated on or after July 1, 2018.
  • Unsubsidized Direct loans for graduate or professional loans carry a fixed interest rate of 6% for loans disbursed on or after July 1, 2017.

  • Unsubsidized Direct loans for graduate or professional loans carry a fixed interest rate of 6.60% for loans disbursed on or after July 1, 2018.

Federal Direct Loans are charged a 1.062% origination and guarantee fee, deducted when funds are disbursed.


Sample Loan Repayment

Federal Direct Subsidized/Unsubsidized Loan Repayment

The Department of Education has a loan repayment calculator you can use to estimate the monthly repayment amount(s) for your federal student loans.

Subsidized/Unsubsidized Loan Repayment Example

Interest Rate: 3.9%

Amount Borrowed: $29,214 (Average loan balance for graduates of four-year private, not-for-profit institutions)

Total Principal + Interest: $35,327

Monthly Payment: $294 (Standard 10-year repayment plan option) 


Master Promissory Note

All federal Direct Loan borrowers must complete a Master Promissory Note prior to receiving the first disbursement of their loan at Cabrini University. This requirement is communicated to the student via standard mail, as well as through routine email communication. The Financial Aid Office will confirm that students have completed a Master Promissory Note before disbursing federal Direct Loan funds. 

The Master Promissory Note is a binding legal document borrowers must sign before receiving a federal Direct Loan. It lists the terms and conditions under which a student agrees to repay the loan and explains rights and responsibilities as a borrower. 

Federal Direct Loan borrowers complete a Master Promissory Note online at www.studentloans.gov

Entrance Counseling

All federal Direct Loan borrowers must complete an Entrance Counseling session prior to receiving the first disbursement of their loan. This requirement is communicated to the student via standard mail, as well as through routine email communication. The Financial Aid Office will confirm that students have completed an Entrance Counseling session before disbursing federal Direct Loan funds.

Entrance Counseling provides information about borrowing, including information about interest rates and fees, deferements, grace period, repayments, and your rights and responsibilities, etc. Entrance Counseling is offered in a quiz format; information is presented then questions must be answered.

Federal Direct Loan borrowers complete Entrance Counseling online at www.studentloans.gov


Exit Counseling

All federal Direct Loan borrowers must complete an Exit Counseling session before the borrower ceases at least half-time study at Cabrini University. This requirement is communicated to the student through routine email communication. The Financial Aid Office will confirm that students have completed an Exit Counseling session before the student is permitted to participate in any commencement activities. 

Exit Counseling provides information about interest rates, grace period, repayment information, what to do if you are having trouble repaying your loan, and your rights and responsibilities, etc. Exit Counseling is offered in a quiz format; information is presented then questions must be answered. 

Remember - repayment of your student loans is a serious responsibility. Failure to pay will adversely affect your credit and garnish employment wages and/or federal tax refunds for which you might be eligible. 

Federal Direct Loan borrowers complete Exit Counseling online at www.studentloans.gov

 

 

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