Loans unlike grants or work-study, are borrowed money that must be repaid, with interest. These are real loans - just like car loans and mortgages. You cannot have these loans canceled just because you didn't like the education you received or because you're having financial difficulty. These loans are a serious obligation, so think about the amount you'll have to repay over the years before you take out a loan.
Direct Loan Program (DL)
The Direct Loan Program is available to assist students and their parents with the costs associated with attending college by offering low-cost education loans.
[Part B of Title IV of the Higher Education Act of 1965, as amended]
Information contained on this page includes:
Types of Loans
Direct Subsidized Loan - This loan is available to students with demonstrated need (determined by the FAFSA). The federal government will pay the interest on this type of loan as long as the student is not in repayment status or until the student's deferment period ends.
Effective for loans made for periods of enrollment (loan periods) beginning on or after July 1, 2012, graduate and professional students are no longer eligible to receive Federal Direct Subsidized Loans. The terms and conditions of Direct Subsidized Loans received by any student for loan periods beginning before July 1, 2012, for either graduate or undergraduate study, are not affected by this change.
The annual loan limit for graduate and professional students remains unchanged at $20,500 ($35,777 for certain health professions students), but this amount will now be limited to Direct Unsubsidized Loans.
If you are a first-time borrower on or after July 1,2013, there is a limit on the maximum period of time(measured in academic years) that you receive Direct Subsidized Loans. Generally, a first-time borrower is one who did not have an outstanding balance of principal or interest on a Direct Loan or on a FEEL Program Loan on July 1, 2013. This time limit does not apply to Direct Unsubsidized Loans or Direct PLUS Loans. If this limit applies to you, you may not receive Direct Subsidized Loans for more than 150 percent of the published length of your program. This is called your "maximum eligibility period." Your maximum eligibility period is based on the published date of your current program. You can usually find the published length of any program of study in your school's catalog.
For example, if you are enrolled in a four-year bachelor's degree program, the maximum period for which you can receive Direct Subsidized Loans is six years (150 percent of 4 years = 6 years). If you are enrolled in a two-year associate degree program, the maximum period for which you can receive Direct Subsidized Loans is three years (150 percent of 2 years = 3 years).
Because your maximum eligibility period is based on the length of your current program of study, your maximum eligibility period can change if you change to a program that has a different length. Also, if you receive Direct Subsidized Loans for one program and then change to another program, the Direct Subsidized Loans you received for the earlier program will generally count toward your new maximum eligibility period.
Direct Unsubsidized Loan - This loan is available to students regardless of demonstrated need (determined by the FAFSA). For independent students, this loan may supplement the funds obtained through subsidized funds. Students receiving this type of loan are responsible for all interest payments, including the time that the student is in deferment. It is advisable that, if possible, the student should make interest payments while in school. The student does, however, have the option of capitalizing the interest. This means that the unpaid interest will be added to the principal amount of the loan at regular intervals, and the student will ultimately owe more money.
Direct Parent PLUS Loan - This loan is available for parents of eligible dependent students. The borrower will be subject to a credit check to determine eligibility. Like unsubsidized loans, the borrower is responsible for all interest payments; however, the repayment period for this loan is determined by your lender.
To apply for the Parent Plus Loan:
- Student’s FAFSA must be complete.
- The parent must log into studentloans.gov and complete the application process.
- If approved, the parent will need to complete the Master Promissory Note at studentloans.gov.
- Once ULM is notified of the Plus Loan, a form entitled Parent Plus Authorization Form will appear on the student’s Banner Self-Service Account under Unsatisfied Requirements.
NOTE: The Parent Plus Loan will NOT be disbursed until the MPN and Authorization Form are complete. If the parent is not approved, the student will automatically be awarded the maximum amount of the Direct Unsubsidized Loan.
Direct Graduate PLUS Loan - This loan is available for graduate or professional students. The terms and conditions applicable to the PLUS Loan for parents of dependent undergraduate students also apply to the Grad PLUS loan. Applicants for this loan are required to apply for the annual loan maximum they are eligible for under the Direct Subsidized and Unsubsidized loan program before applying for a Grad PLUS loan.
- be either a U.S. citizen or eligible non-citizen
- accepted for enrollment
- making Satisfactory Academic Progress
- be enrolled at least half-time
- not be in default on previous student loans
The actual amount you are awarded will depend on other financial aid you receive, your estimated family contribution (EFC), and other factors. Your total financial aid award package cannot exceed your cost of attendance budget. This means that you may not be eligible for the maximum amount specified below. The grade level for your yearly loan limits will be based upon the number of earned hours you have at the beginning of the Fall semester for each year. Example: If you have 29 hours earned at the beginning of the Fall 2012 term, your loan will be awarded at Freshman levels for the Fall, Spring, and Summer sessions of the 2012-2013 academic year. If your earned hours at the end of the fall semester put you above 29 to a sophomore level, or above 59 to a junior/senior level, then your loan amount can be increased by $500 for the spring semester. This also applies between spring and summer. However, if you are in a pre-program, such as pre-nursing, pre-social work, pre-pharmacy or pre-dental hygiene, etc., then you will not be allowed to receive above sophomore level loan limits until you are admitted into the program.
Yearly Loan Totals Based Upon Grade Level
Dependent Independent Subsidized Unsubsidized Subsidized Unsubsidized Total Combination Freshman $3,500 $2,000 $3,500 $6,000 $9,500 Sophomore $4,500 $2,000 $4,500 $6,000 $10,500 Junior $5,500 $2,000 $5,500 $7,000 $12,500 Senior $5,500 $2,000 $5,500 $7,000 $12,500 Graduate $8,500 $12,000 $20,500
Reminder: Effective for loans made for periods of enrollment (loan periods) beginning on or after July 1, 2012, graduate and professional students are no longer eligible to receive Federal Direct Subsidized Loans. The terms and conditions of Direct Subsidized Loans received by any student for loan periods beginning before July 1, 2012, for either graduate or undergraduate study, are not affected by this change.
The limits listed below apply to your entire academic career. These limits are established by the federal government, and you may not exceed them. It is extremely important that you be responsible with your borrowing habits. ALL LOANS MUST BE REPAID. Failure to repay your student loans will adversely affect your credit rating and purchasing power.
GRADUATES MUST BE ENROLLED IN AT LEAST 5 GRADUATE LEVEL HOURS AND BE ADMITTED TO A DEGREE-SEEKING GRADUATE PROGRAM TO MAINTAIN GRADUATE ELIGIBILITY. Pharmacy students must be enrolled in at least 6 pharmacy level hours during the fall/spring semesters and at least 5 pharmacy level hours for the summer to be eligible for student loans.
Aggregate Loan Limits
Dependent Independent Subsidized/Unsubsidized Subsidized Unsubsidized Total Combination Undergraduates $31,000 $23,000 $34,500 $57,500 Graduates $65,500* $72,500* $138,000*
*Includes undergraduate loans
The annual loan limit for graduate and professional students remains unchanged at $20,500 ($35,777 for certain health professions students), but this amount will now be limited to Direct Unsubsidized Loans
- The Direct Loan Master Promissory Note is the method for students to apply for their Direct Student Loans. It was created to reduce the paperwork burden for students and schools. The initial DLMPN application may be the one and only time a student is required to complete a loan application.
- Borrowing limits remain unchanged, but you do not designate a specific loan amount on the DLMPN.
- Your loan amounts will appear on your award letter; however, you can reduce your loan amount on your web award notification. It will be better for you to borrow what you think you will need with your initial loan request.
- Your DLMPN is similar to a line of credit. You will be responsible for repaying all amounts which are borrowed against that note. Be responsible. Keep good records of what you borrow.
- The Master Promissory Note can be completed at studentloans.gov
What other events invalidate my MPN?
- Ten years have passed since you signed the MPN.
- One year has passed since you signed a DLMPN, and no loans have been disbursed to you.
ULM will receive your funds electronically. Federal regulations require that loan funds be sent in two separate disbursements, one in the Fall and one in the Spring. If you have a Fall/Spring loan or a Summer I & II loan, you will receive funds within approximately the first two weeks of class.
You must, of course, maintain your eligibility to receive your loan disbursements. This includes, but is not limited to, maintaining Satisfactory Academic Progress, maintaining at least 1/2 time enrollment (Graduates MUST have at least 5 GRADUATE hours of enrollment and Pharmacy students at least 6 pharmacy hours of enrollment), and completing any requested documentation.
All first-time borrowers are required to complete an Entrance Counseling Session before your loan will be transmitted to the guarantor. If you have repaid all of your previous loans, you will be asked to complete another Entrance Session. To complete the Entrance Counseling Session, go to: studentloans.gov
If you call or receive a notice from the Department of Education with an anticipated disbursement date, please remember this date does NOT mean your refund from ULM will be available on that date. If you meet eligibility requirements, these disbursements are credited to your account, and the Controller’s Office then produces the appropriate refund for you. With the exception of the first scheduled refund date, Student Account Services, located on campus, transmits refunds to HigherOne weekly. How your refund is disbursed depends on how you have your refund set to come from HigherOne.
If you wish to cancel your loan prior to disbursement, contact the Financial Aid Office either in writing, in person or through Warhawks email.
The interest rate on both Direct Subsidized and Unsubsidized Loans are variable and adjusted annually on July 1st. The interest rate is not to exceed 8.25%. For Subsidized Loans, the undergraduate interest rate is 4.29%. The interest that accrues is paid by the Department of Education during periods of authorized deferment. For Unsubsidized Loans, the interest rate for undergraduate is 4.29% and 5.84% for graduate students. You are required to pay all interest, even during a period of authorized deferment. You have the option of capitalizing your interest while you are in school; however, please be aware that by doing so, you will ultimately owe more money when you graduate or leave school. Capitalized interest increases the principal balance of your loans and the total amount of interest costs you incur.
Deferment and forbearance are the terms used for postponing your student loan payments.
Deferment is when you are postponing your payments for a specific period time for a specific reason. Deferment is not automatic; you must apply for deferment through your lender. Here are some reasons you might be granted a deferment:
- Enrollment in school at least half time
- Graduate fellowship
- Rehabilitation training
- Economic hardship
Forbearance is another way to postpone your student loan payments if you are not eligible for a deferment. There are four specific reasons why you can be granted forbearance:
- Discretionary: Can be granted for any reason agreed upon between you and your lender (e.g., returning to school less than half time and not eligible for deferment).
- Administrative: Can be granted by your lender for specific reasons without your written authorization (e.g., loan payments were behind at the time a deferment was granted).
- Mandatory: Must be granted by your lender for specific reasons if you request, for a specific length of time (e.g., your loan payments equal more than 20 percent of your monthly gross income). A mandatory forbearance can be granted for no more than 12 months.
- Mandatory Administrative: Must be granted by your lender for specific reasons (e.g., you are not able to repay using an income-sensitive repayment schedule within 10 years because of changes in the variable interest rate). A mandatory administrative forbearance can be granted for no more than 36 months.
To be granted forbearance, you must speak to your lender regarding the above options. If you do not know who your lender is, you can call the Federal Student Aid Information Center at 1-800-433-3243 or go to www.nslds.ed.gov with your PIN.
Repaying Your Student Loan Debt
After you graduate, leave school, or drop below half-time enrollment, you will need to complete a Perkins Exit Interview and/or Direct Loan Exit Interview. You will then receive information about repayment and your loan provider will notify you of the date your loan repayment begins. For detailed questions concerning repayment of Federal Perkins Loans and Health Professions Loans, contact ECSI at www.heartlandecsi.com or call 318-342-5121. The office is located in Coenen Hall.
We cannot emphasize enough the importance of making your full loan payment on time either monthly (which is the usual pay cycle) or according to your repayment schedule. If you do not make your regular payments, you could end up in default, which has serious consequences.
Each type of loan has its own requirements regarding grace periods (amount of time until your first payment), repayment options, and repayment periods:
Federal Perkins Loans
- You have a grace period of nine months until your first payment must be received for your Federal Perkins Loans.
- Perkins Loans generally must be paid in 10 years.
- Your monthly payment will depend on the total you have borrowed from the Perkins Loan program.
Health Professions Loan
- You have a grace period of twelve months until your first payment must be received for your Health Professions Loans.
- HPL Loans generally must be paid in 10 years
- Your monthly payment will depend on the total you have borrowed from the HPL program.
Federal Direct Loans
- You have a grace period of six months until your first payment must be received for your Federal DirectLoan. The grace period begins the day after you ceased to be enrolled at least half time. Your first payment will be due within 45 days after your grace period begins.
- The Department of Education explains available repayment options for Federal Direct Loans; it includes examples of monthly payments for different loan amounts, and covers other topics you need to consider when managing your student loans. Visit studentloans.gov or http://studentaid.ed.gov/PORTALSWebApp/students/english/OtherFormsOfRepay.jsp for repayment option.
Federal PLUS Loans
- The repayment period for all PLUS loans begins on the date the loan is fully disbursed, and the first payment is due within 60 days of the final disbursement.
- However, a graduate student PLUS loan borrower (as well as a parent PLUS borrower who is also a student) can defer repayment while the borrower is enrolled at least half time, and, for PLUS loans first disbursed on or after July 1, 2008, for an additional six months after the borrower is no longer enrolled at least half-time. Interest that accrues during these periods will be capitalized if not paid by the borrower.
- Parent PLUS loan borrowers whose loans were first disbursed on or after July 1, 2008, may choose to have repayment deferred while the student for whom the parent borrowed is enrolled at least half-time and for an additional six months after that student is no longer enrolled at least half-time. Interest that accrues during these periods will be capitalized if not paid by the borrower.
Default is defined as the failure of the borrower to fulfill the contract or agreement by not making installment payments when due or by not complying with other terms of his/her Promissory Note. Payments are due after your 6 month grace period has ended following your graduation or your departure from school. You must make payments on your loan even if you do not receive a bill or repayment notice. It is important for you to know who holds the rights to your loan, as well as where all payments should be made. A few consequences of default:
- Loss of federal and state income tax refunds
- Loss of other federal or state payments
- Legal action against you
- Collection charges (including attorney fees) may be assessed against you
- An increase in your interest rate
- Loss of eligibility for other student aid and assistance under most federal benefit programs
- Loss of eligibility for loan deferments
- Negative credit reports
- Garnishment of your wages
This link will take you to the Department of Education's site which contains important default and repayment information.
Federal regulations require all students must complete a Direct Loan Entrance Counseling Session. This is an attempt to make you a better informed and responsible borrower. ULM requires that, if you are applying for a loan for the first time, you must complete this session before your loan will be disbursed. If you have previously attended a Direct Loan School, our office must have documentation of this information.
link: entrance loan counseling
Federal regulations require all students who have received Direct Loan funds at any time during their academic career to complete an Exit Counseling Session. This is required after graduation, resignation, or falling below less than half-time status. You will be notified through your email and will receive the results on-line. This session will help you make better decisions as you enter the repayment period of your loan.
link: exit loan counseling