The William D. Ford Federal Directo Loan program is the largest federal student loan program. The Direct Loan program offers low-interest rate loans to help cover the costs of higher education.
Direct Stafford Loans include the following types of loans:
Federal Direct Subsidized Loans
Direct Subsidized Loans are awarded to students who demonstrate financial need based on the results of the Free Application for Federal Student Aid (FAFSA). The Federal Government pays the interest on this loan while a student is enrolled at least half-time (six credit hours). There is no penalty for early repayment.
Direct Unsubsidized Loans
Federal Direct Unsubsidized Loans are not based on financial need, but a student must be enrolled at least half-time and fill out the FAFSA each year. Interest begins to accrue when the loan is first disbursed. Students can pay the interest while still in-school; any unpaid interest will be added to the loan principal (capitalized) at the time of repayment. Loan capitalization can substantially increase the amount you repay. You can save money by paying the interst on an Unsubsidized loan while still in-school. There is no penalty for early repayment.
Current Interest Rates
Loans first disbursed from July 1, 2014 through June 30, 2015 – 4.66%
Loans first disbursed from July 1, 2013 through June 30, 2014 – 3.86%
Additional loan types provided under the Direct Loan Program include Direct PLUS Loans (Parent Loan for Undergraduate Students) and Direct Consolidation Loans (to combine federal education loan debts into a single loan).
How do I apply for a Federal Direct Loan?
- Complete the FAFSA*
- Accept all or a portion of the Direct Stafford Loans on your BRIDGE account
- Complete the Master Promissory Note (MPN)
- Complete the Student Loan Entrance Counseling
*FAFSA MUST be completed EACH academic year.
The Award Chart describes the yearly loan amounts that a student may be eligible to borrow. Actual awarding of student loans will depend on your Satisfactory Academic Progress, total loan indebtedness and number of credit hours enrolled each semester.
If your parent has applied for and been denied the Federal Direct PLUS Loan, a Dependent student may be eligible for Additional Federal Direct Unsubsidized Loan (Denied PLUS).
Blue Ridge CTC processes all student and parent loans through the William D. Ford Direct Loan Program. Blue Ridge CTC will also process alternative education loans from private lending sources up to the cost of attendance minus other financial aid.
If you are accepting loans for the first time, you will need to complete two additional steps required by the Department of Education:
- Entrance Counseling must be completed before your loan will be disbursed to your student account. This is available online at studentloans.gov and takes about 20 minutes to complete.
- Sign a Master Promissory Note (MPN) at studentloans.gov. You will need your FAFSA Pin Number to sign electronically and the names, addresses and phone numbers of two references.