Federal Direct Loan

There are two types of Federal Direct Loans, Subsidized or Unsubsidized.  Both subsidized and unsubsidized loans are guaranteed by the U.S. Department of Education.  Nearly all students are eligible to receive them (regardless of credit score or other financial issues.)  Both types offer a grace period of six months, which means that no payments are due until six months after graduation or three months after the borrower becomes a less-than-full-time student without graduating.

Subsidized federal student loans are offered to students with demonstrated financial need: generally requiring a low family income.  For these loans, the federal government makes interest payments while the student is in college.  For example, those who borrow $10,000 during college will owe $10,000 upon graduation.

Unsubsidized federal student loans are also guaranteed by the U.S. Government, but the government does not pay interest for the student, rather the interest accrues during college.  Those who borrow $10,000 during college will owe $10,000 plus interest upon graduation.  For example, those who have borrowed $10,000 and had $2000 accrue in interest will owe $12,000.  Interest will be accruing on the $12,000.  The accrued interest will be "capitalized" into the loan amount, and the borrower will begin making payments on the accumulated total.  Students can choose to pay the interest while still in college.

If you are a first-time Oklahoma Christian borrower, you must complete a loan entrance interview (LEI) and a master promissory note (MPN) before loans will be disbursed to your student account.

Both Subsidized and undergraduate student Unsubsidized Direct loans for 2013-2014 have a fixed interest rate of 3.86% for the life of the loan.  Graduate student unsubsidized Direct loans for 2013-2014 have a fixed interest rate of 5.41% for the life of the loan.  All Direct loans have a 1.072% default fee deducted from the total amount borrowed.

(The interest rate is reset each year for the life of the loan and is determined at a specific time each year based on the rate of the 10-year Treasury Bill plus 2.05% for undergraduates and 3.60% for graduate students.)

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