Federal Direct Student Loans
Federal Direct Student Loans are available to eligible students who file a valid FAFSA.
Federal rules limit student loans so that borrowing does not become overly burdensome. For more information on terms and interest rates, please visit the Federal Student Aid website.
Types of Loans
Dependent students who demonstrate financial need and who are enrolled at least half-time (six credits or more), may qualify for a Subsidized Student Loan of up to $3,500 for the freshman year, $4,500 for the sophomore year, and $5,500 for junior and senior years.
Independent students may borrow up to an additional $4,000 per year for the first and second years of undergraduate study and up to an additional $5,000 per year for subsequent undergraduate study through the Unsubsidized Direct Loan Program.
Direct Unsubsidized Loans are non-need based. Interest begins to accrue at the time the loan is disbursed. The Free Application for Federal Student Aid (FAFSA) is used to determine student eligibility. Students may borrow up to $2,000 per academic year.
Students whose parents are denied for the Parent PLUS loan are eligible for an additional $4,000 in Direct Unsubsidized Loan for the first and second years and $5,000 for the third and fourth years.
Master Promissory Note (MPN)
New borrowers must complete a Federal Direct Loan Master Promissory Note (MPN). The MPN is a legal contract between you and your loan servicer that sets the terms and conditions and other details of your federal loan. A Master Promissory Note is signed only once for all subsequent direct loans.
New borrowers at Washington College will need to complete Entrance Counseling. The purpose of entrance counseling is to ensure that you understand your rights and responsibilities as a new loan borrower and that you understand the regulations governing each loan program. Until you have completed this requirement, the funds will not disburse to your account.
As a borrower of a federal loan(s), you are required to complete Exit Counseling once you graduate, drop below part-time, or stop enrollment. Exit counseling covers all subjects that were covered in entrance counseling, with an emphasis on repayment strategies.
Parent Plus Loan
The Federal Direct PLUS Loan Program allows parents of undergraduate students to borrow up to the full cost of attendance minus other financial aid.
Parents are required to file a FAFSA to be eligible for a Parent PLUS loan. All PLUS loan decisions are credit-based, and parents must re-apply for a PLUS loan each academic year.
If the parent applies for a PLUS loan and it is denied by the Department of Education, the student is then eligible for an additional Unsubsidized Direct Loan.
There are two ways to apply for the Parent PLUS loan:
Apply on-line at the Federal Student Aid website.
Submit a Washington College’s PLUS Loan Request Form found on our Forms and Resources webpage.
Interest Rates for Direct Loans First Disbursed on or After July 1, 2021, and Before July 1, 2022
|Loan Type||Borrower Type||Fixed Interest Rate|
|Direct Subsidized Loans and Direct Unsubsidized Loans||Undergraduate||3.73%|
|Direct PLUS Loans||Parents and Graduate or Professional Students||
Most federal student loans have loan fees that are a percentage of the total loan amount. The loan fee is deducted proportionately from each loan disbursement you receive while enrolled in school. This means the money you receive will be less than the amount you actually borrow. You’re responsible for repaying the entire amount you borrowed and not just the amount you received.
Loan fees for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed on or after Oct. 1, 2019.
|Loan Type||First Disbursement Date||Loan Fee|
|Direct Subsidized Loans and Direct Unsubsidized Loans||On or after 10/1/20 and before 10/1/21||1.057%|
|On or after 10/1/19 and before 10/1/20||1.059%|
|Direct PLUS Loans||On or after 10/1/20 and before 10/1/21||4.228%|
|On or after 10/1/19 and before 10/1/20||4.236%|
Loans disbursed after October 1, 2021 will have different loan fees.
Alternative Loans (Private Education Loans) are offered through private lenders and are meant to provide additional educational funding. In most cases, it is advantageous for students to pursue Federal Direct Loans, and for parents to pursue a Federal Direct PLUS Loan, before seeking private educational loans.
A major advantage of the federal loan programs is that the federal government caps the interest rates on the loans. Additionally, private student loans typically do not offer the same benefits as federal loans, such as consolidation, service cancellations and military repayment.
Private loan borrowers will be required to complete Private Loan counseling about borrowing essentials. Loan funds will not be disbursed until counseling has been completed.
Complete Private Loan Counseling by clicking on the Borrowing Essentials link here.
Washington College does not partner with any lender. Any private loans displayed within our FastChoice Private Loan Counseling are random selections, based on a historical listing of lenders students at Washington College have used in the past 5 years. Students and families are encouraged to compare the terms and conditions of the various private loans before applying.
The Office of Student Financial Aid staff would be happy to answer questions you may have related to alternative/private loans.