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Federal Direct Loans

Federal Direct Loans are available to graduate and undergraduate students. Students must be enrolled at least half time to receive a Direct Loan. Federal Direct Loans borrowed while enrolled at another institution may impact a student's loan eligibility at OLHCC.

Federal Direct Subsidized Loans are available to undergraduate students with financial need. Subsidized loans first disbursed on or after July 1, 2013, through June 30, 2014, have an interest rate is 3.86% with an interest rate cap of 8.25%. 

Federal Direct Unsubsidized Loans are available to undergraduate and graduate students. These loans require that the student pay the interest while enrolled, unless the student arranges to postpone the interest payment by checking the appropriate box on the Master Promissory Note. Students should be careful when choosing this option: It means that the interest will be capitalized (the accrued interest will be added to the principal amount), increasing the amount of the debt. For unsubsidized loans disbursed on or after July 1, 2013, through June 30, 2014, the interest rate is 3.86% with an interest rate cap of 8.25%. 

The Department of Education is authorized to charge the borrower loan fees that will be deducted from each disbursement. The fee amount for subsidized and unsubsidized loans disbursed on or after July 1, 2013 is 1.051%.

Students have a six-month repayment grace period after graduating, leaving school, or dropping below half-time status. For Direct Subsidized Loans that are disbursed between July 1, 2012, and July 1, 2014, the borrower will be responsible for paying any interest that accrues during the grace period. If you choose not to pay the interest that accrues during the grace period, the interest will be added to the principal balance.

Creditworthiness is not a requirement to obtain a Direct Loan. Under this program, students may borrow up to the maximum loan limit every award year. Loan funds can be used to cover direct education costs, such as tuition and fees, as well as indirect costs, such as food and housing, books and other education-related expenses.