Students seeking a loan under the William D. Ford Federal Direct Loan Program must complete a Free Application for Federal Student Aid (FAFSA) to determine their eligibility.
Eligibility for William D. Ford Federal Direct Loans
To be eligible for a Federal Direct Loan, a student must:
Maximum Annual Loan Amounts
Base Amount (may be subsidized or unsubsidized)
Additional Unsubsidized Amount
Total Subsidized and Unsubsidized Amount
1st year - fewer than 30 credits earned
up to $3,500 per year
up to $2,000 per year
up to $5,500 per year
2nd year –30 or more credits earned
up to $4,500 per year
up to $6,500 per year
undergraduate aggregate maximum
up to $23,000
up to $8,000
up to $31,000
Total Subsidized & Unsubsidized Amount
up to $6,000 per year
up to $9,500 per year
2nd year - 30 or more credits earned
up to $10,500 per year
up to $34,500
up to $57,500
There are two types of Federal Direct Student Loans
Subsidized Federal Direct Loan:
The interest on this type of loan is paid by the Federal government while a student is attending college. To be eligible for a Subsidized Federal Direct Loan, the applicant must:
MAXIMUM a student can borrow in SUBSIDIZED LOANS
Cost of attendance - expected family contribution = estimated financial assistance
Unsubsidized Federal Direct Loan:
The interest on this type of loan is paid by the student while attending school or the interest is accrued and added to the principal loan amount. To be eligible for an Unsubsidized Federal Direct Loan, the applicant must:
MAXIMUM a student can borrow in UNSUBSIDIZED AND PLUS LOANS
Cost of attendance - estimated financial assistance = maximum loan amount
Origination fees are fees which are a percentage of the total loan amount. The loan fee is deducted proportionately from each loan disbursement students receive. This means the money a student receives will be less than the amount actually borrowed. Students are responsible for repaying the entire loan amount borrowed and not just the amount received.
The chart below shows the loan fees for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed on or after Dec. 1, 2013.
First Disbursement Date
Direct Subsidized Loans and Direct Unsubsidized Loans
On or after 12/1/13 and before 10/1/14
On or after 10/1/14 and before 10/1/15
Direct PLUS Loans
Direct PLUS Loan
PLUS loans are federal loans that parents of dependent undergraduate students can use to help pay for college.
The annual limit on a PLUS Loan is equal to the student's cost of attendance minus any other financial aid the student receives. For example, if the cost of attendance is $6,000 and the student receives $4,000 in other financial aid, the student's parent can request up to $2,000 in a PLUS Loan.
In most cases, the loan will be disbursed in at least two installments, and no installment will be more than half the loan amount. The college will use the loan funds to pay the student's tuition, fees, room and board, and other school charges (in that order.) If any loan funds remain, the parent will receive the remaining amount as a check or other means. Any remaining loan funds must be used for the student's education expenses.
The interest rate is fixed at 7.21%. Interest is charged from the date of the first disbursement until the loan is paid in full. The parent will pay an origination fee of 4.292% of the loan amount, deducted proportionately each time a loan disbursement is made.
The repayment period for a Direct PLUS Loan begins at the time the PLUS loan is fully disbursed, and the first payment is due within 60 days after the final disbursement. However, for Direct PLUS Loans with a first disbursement date on or after July 1, 2008, the parent may defer repayment while the student for whom the PLUS Loan was borrowed is enrolled at least half-time, and for an additional six months after the student ceases to be enrolled at least half-time.
TO RECEIVE A PLUS LOAN:
Interest Rates for Direct Loans First Disbursed on or After July 1, 2013
Loans first disbursed on or after 7/1/13 and before 7/1/14
Loans first disbursed on or after 7/1/14 and before 7/1/15
Direct Subsidized Loans
Direct Unsubsidized Loans
Graduate or Professional
Parents and Graduate or Professional Students
How to Apply for a Federal Direct Student Loan:
Complete and submit an online Federal Direct Loan Request (follow the steps below as web guide)A paper application is also available under downloadable forms, which may be completed and submitted to the Financial Aid Office in Room U201.Increasing/Decreasing/Canceling a Direct Loan: Students who wish to increase, decrease or cancel a Direct Loan before the funds disburse must complete and submit a Direct Loan Adjustment Request, to the Financial Aid Office.How to Apply for a Federal Direct PLUS Loan:
What Happens Next:
Alternative loans, also called private loans, are used at KBCC Community College by students and their families when:
Students and parents who are eligible for Federal Direct Loan funds should always borrow through the Federal Direct Loan program before turning to alternative loans to finance their education.