William D. Ford Federal Direct Student Loan Program

UMD participates in the William D. Ford Federal Direct Student Loan Program, often referred to as Direct Stafford Loans or Direct Loans. The loan program offers low-interest loans that are either subsidized and/or unsubsidized. The program also offers the Ford Federal Direct PLUS loan for parents to borrow from on behalf of their dependent student(s).

The program allows students to borrow directly from the federal government, rather than through lending institutions. This eliminates the need for a third party lender or guarantee agency, and allows the school to be the student's primary contact for federal loans. The UMD Office of Financial Aid and Registrar administers and pays these loans to the students.

To be eligible for these federal student loans at UMD, you must meet the following requirements:

• Be enrolled in a degree-seeking program through one of the following collegiate units:
  • Swenson College of Science and Engineering (SCSE)
  • College of Liberal Arts (CLA)
  • College of Education and Human Service Professions (CEHSP)
  • Labovitz School of Business and Economics (LSBE)
  • School of Fine Arts (SFA)
  • UMD Graduate School
• Have a FAFSA on file for the current academic year
• Be enrolled at least half-time
• Be meeting all Satisfactory Academic Progress standards
• Meet all of the General Eligibility Requirements for financial aid recipients

Ford Federal Direct Subsidized Loan

This is a need-based student loan taken out in your name that allows you to borrow money interest-free while you are in school at least half time. The loan must be repaid, and you must begin repayment six months after you graduate, withdraw from school, or drop below half-time status. Full details are provided on your promissory note.

Your eligibility for this loan is based on the Expected Family Contribution (EFC) that is calculated on your FAFSA, your grade level in school, your cost of attendance, and the effect of any other financial aid that you receive. An origination fee equal to .5 % of your loan amount is deducted from your loan before it is disbursed.

If you have accepted a Ford Federal Direct Subsidized loan, you will need to complete Entrance Counseling for first-time borrowers and a Master Promissory Note (MPN) before the loan funds will be paid to your account.

Ford Federal Direct Unsubsidized Loan

The Ford Federal Direct Unsubsidized loan is a non-need-based loan. This is a student loan, taken out in your name, that must be repaid. The loan must be repaid, and you must begin repayment six months after you graduate, withdraw from school, or drop below half-time status. Full details are provided on your promissory note.

Interest accrues on this loan from the time of disbursement; however, you have the option to defer the interest while you are in school at least half-time. You will receive quarterly interest statements from Direct Loans giving you the opportunity to pay off the accumulated interest. If you choose to defer the interest that has accumulated, it will be added to your loan amount (capitalized) and will increase the amount that you will need to repay.

Your eligibility for this loan is based on your grade level in school, your cost of attendance, and other aid that you received. An origination fee equal to .5% of your loan amount is deducted from your loan before it is disbursed.

If you have accepted a Ford Federal Direct Unsubsidized loan, you will need to complete Entrance Counseling for first-time borrowers and a Master Promissory Note (MPN) before the loan funds will be paid to your account.

Interest Rates

Ford Federal Direct Subsidized Loans that are taken out July 1, 2006–June 30, 2008 will have a fixed interest rate of 6.8%.

Ford Federal Direct Subsidized loans thare are taken out on or after July 1, 2008 will have a fixed interest rate of 6.0%.

Ford Federal Direct Unsubsidized loans thare are taken out on or after July 1, 2006 will have a fixed interest rate of 6.8%.

Interest rates on these loans taken out prior to July 1, 2006, have a variable rate structure. The rates are adjusted annually on July 1 and will not exceed 8.25%.

Additional Information on these federal loan programs can be accessed online at: http://www.studentaid.ed.gov.

Grade Levels and Loan Limits

The following chart illustrates the maximum amounts you are eligible to receive in Ford Federal Direct loans based on your grade level in school and your dependency status.

The 'Annual Limit' is the amount you can receive per academic year (fall semester, spring semester, and May/Summer Term). The 'Aggregate Limit' is the maximum amount you can borrow from the Ford Direct Loan Program during your academic career.

Note: For more information on deferments and forbearance, see Funding Education Beyond High School: The Guide to Federal Student Aid | 2008–09 ( 1.70 MB); U.S. Department of Education, Federal Student Aid.