Federal Student Loans
The Federal Direct Student Loan program enables students to borrow funds to assist with educational expenses. Interest rates and origination fees are established on an annual basis by congressional legislation. Half of the Direct Loan is disbursed in the fall semester with the other half disbursed in the spring semester. Students are required to begin repayment on the loan 6 months after they graduate or are no longer enrolled at least half-time.
Direct Loan Interest Rates for 2021-2022
The anticipated interest rate for Federal Direct Loans disbursed between July 1st 2021 and before July 1st 2022 are as follows:
Direct Loan Interest Rates for 2020-2021
The assigned interest rate for Federal Direct Loans disbursed between July 1st 2020 and before July 1st 2021 are as follows:
Direct Loan Interest Rates for 2019-2020
The assigned interest rate for Federal Direct Loans disbursed between July 1st 2019 and before July 1st 2020 are as follows:
Direct Loan Interest Rates for 2018-2019
The assigned interest rate for Federal Direct Loans disbursed between July 1st 2018 and before July 1st 2019 are as follows:
Application Instructions
After completing a Free Application for Federal Student Aid or FAFSA, all first-time Direct Loan student borrowers will be required to sign a Master Promissory Note (MPN). The MPN is a legal document where a student promises to repay his / her loan(s) and any accrued interest and fees to the U.S. Department of Education. The MPN will also explain the terms and conditions of the loan, which we advise you read and understand prior to signing.
If you haven't previously received a Federal Stafford Loan or Federal Direct Loan, you must also complete Entrance Counseling before the first disbursement of your loan can be made to Elizabethtown College. This helps you understand your rights and responsibilities regarding your loan.
Both requirements can be completed online at www.studentaid.gov by signing in with your FSA ID from the FAFSA application. You will also receive instructions and reminders from the Financial Aid Office on the steps needed to complete these two requirements. Students can use the Student Aid Portal on our website to keep track of any outstanding requirements for financial aid. If you have any questions please do not hesitate to contact our office at (717) 361-1404 or finaid@etown.edu.
What is the Difference Between Subsidized and Unsubsidized loans?
Subsidized loans are available to undergraduate students with financial need. The interest does not accrue on the Subsidized loan until the student graduates or leaves the school for any reason. With Unsubsidized loans, the interest will accrue on the loan upon disbursement. If you choose not to pay the interest while you are in school and during grace periods and deferment or forbearance periods, your interest will accrue (accumulate) and be capitalized (that is, your interest will be added to the principal amount of your loan). However, no principal payments are due until the loan enters official repayment (6 months after graduating or leaving school).
Annual Federal Loan Limits
When looking at loan financing options, students should always start with the Federal Direct Loan program. The Direct Loan Program is the federal government's primary loan program and accounts for more financial aid dollars in our nation than any other source. Maximum annual loan limits are determined by the federal government and apply to all colleges equally. For Dependent students who borrow the annual maximum Federal Direct Loan each year and graduate in four years, their cumulative Direct Loan borrowing will equal $27,000.
Dependent Students:
First-Year: $3,500 and $2,000 additional unsubsidized
Sophomore: $4,500 and $2,000 additional unsubsidized
Junior: $5,500 and $2,000 additional unsubsidized
Senior: $5,500 and $2,000 additional unsubsidized
Independent Students and Dependent undergraduate students whose parents are unable to obtain Parent PLUS Loans:
First-Year: $3,500 and $6,000 additional unsubsidized
Sophomore: $4,500 and $6,000 additional unsubsidized
Junior: $5,500 and $7,000 additional unsubsidized
Senior: $5,500 and $7,000 additional unsubsidized
Graduate: $20,500 unsubsidized
Dependent students may borrow a maximum of $31,000 through the Direct Loan program towards their undergraduate degree (no more than $23,000 can be subsidized).
Independent students may borrow a maximum of $57,500 through the Direct Loan program towards their undergraduate degree (no more than $23,000 can be subsidized).
Graduate students may borrow a maximum of $138,500 through the Direct Loan program. The graduate aggregate loan limit includes all federal loans received for undergraduate study. For additional assistance, Graduate students can reference our 2021-2022 Graduate Financial Aid Tip Sheet here.
Loan Qualification Formula
The type of Direct Loan a student qualifies to receive is calculated by a federal formula that takes into account the student's financial need and the cost of the college they are attending. The formula a school must adhere to is as follows:
Cost of Attendance minus Expected Family Contribution minus Other Financial Aid = Maximum Subsidized Loan, not to exceed annual subsidized limit
Cost of Attendance minus Other Financial Aid = Maximum Unsubsidized Loan, not to exceed annual loan limit
Student Loan Interest Rates & Fees
2021-2022 academic year interest rates for both the Undergraduate Subsidized and the Unsubsidized Direct Student Loans are fixed at 3.73% for the lifetime of the loan.
Learn more about how interest is calculated and the fees associated with federal student loans from the U.S. Department of Education.
|
Loan Type |
First Disbursement Date |
Loan Fee |
|---|---|---|
|
Direct Subsidized Loans and Direct Unsubsidized Loans |
On or after 10/1/20 and before 10/1/22 |
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 10/1/22 |
4.228% |
|
On or after 10/1/19 and before 10/1/20 |
4.236% |
Loans first disbursed prior to Oct. 1, 2019, have different loan fees.
Tax Benefits for Higher Education
Interest paid on a Direct Loan may qualify as a student loan interest deduction on a student's federal tax return. Use the Interactive Tax Assistant to help determine if you can deduct the interest you paid on a student or educational loan. IRS Publication 970 is another resource that students can refer to about other tax benefits for education such as the American Opportunity Credit or Lifetime Learning Credit.
Elizabethtown College Business Office resources - Access your 1098-T and learn more about Tax Benefits for Education.
Financial Awareness Counseling
Financial Awareness Counseling provides tools and information to help you understand your financial aid and assist you in budgeting and managing your finances. Most people complete counseling in 20 - 30 minutes.
Public Service Loan Forgiveness (PSLF) Help Tool
The Public Service Loan Forgiveness Program forgives the remaining balance on your Direct Loans after you have made 120 (10 years) of qualifying payments under a qualified repayment plan. Use the PSLF Help Tool to understand more about the PSLF Program, assess whether your employer qualifies for PSLF, and to find help in understanding which forms to submit in order to qualify.
View a Federal Student Aid Webinar on Understanding the Basics of Public Service Loan Forgiveness.
Exit Counseling
Every student who receives a Federal Direct Loan is required to complete Exit Counseling upon graduation, dropping below half-time enrollment, or when they leave school. This is a mandatory federal requirement. Students must complete this requirement online at www.studentaid.gov and log in using the FSA ID from their FAFSA application.
Need help with finding the right repayment plan? Use this guide to learn how to make payments, what to do if you can't afford your monthly payments, or seeing what circumstances might result in a loan being forgiven, canceled or discharged visit the Federal Student Aid Guide to Repaying Your Federal Student Loans.
For more information about federal student loans and repayment obligations, along with information regarding deferments, forbearances, and consolidation, students are encouraged to visit the Student Loan Repayment website at www.studentaid.gov.
Students can also access a detailed summary about all of the federal student loans they have received and finding contact information for their assigned loan servicers.
If you have any questions or concerns regarding the Direct Loan Program or exit counseling process, please contact the our office for assistance at (717) 361-1404 or finaid@etown.edu.