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Federal Direct Loan terms and conditions

 

Interest Rates

Undergraduate Student Borrowers:

  • 3.4% fixed interest rate for Federal Direct Subsidized Student Loans first disbursed on or after July 1, 2011 and before July 1, 2012
  • 6.8% fixed interest rate for Federal Direct Subsidized Student Loans first disbursed on or after July 1, 2012
  • 6.8% fixed interest rate for Federal Direct Unsubsidized Student Loans first disbursed on or after July 1, 2006

Graduate and Professional Student Borrowers:

  • 6.8% fixed interest rate for Federal Direct Subsidized Student Loans first disbursed on or after July 1, 2006
  • New: Effective for loans made for periods of enrollment beginning on or after July 1, 2012, graduate and professional students are no longer eligible to receive Federal Direct Subsidized Student Loans per the federal government’s Budget Control Act of 2011.
  • 6.8% fixed interest rate for Federal Direct Unsubsidized Student Loans first disbursed on or after July 1, 2006

Origination Fee

  • For both Federal Direct Subsidized and Unsubsidized Loans where the first disbursement occurs on or after July 1, 2010 a 1.0% Origination Fee is assessed, per the federal government's Higher Education Reconciliation Act of 2005.

Up-Front Interest Rebate

  • For both Federal Direct Subsidized Loans and Federal Direct Unsubsidized Loans where the first disbursement occurs on July 1, 2010 through June 30, 2012 the student loan borrower will receive a 0.5% Up-Front Interest Rebate, per the federal government’s Higher Education Reconciliation Act of 2005.
  • New: Effective for Federal Direct Subsidized Loans and Federal Direct Unsubsidized Loans first disbursed on or after July 1, 2012 student loan borrowers will no longer be eligible to receive an Up-Front Interest Rebate, per the federal government’s Budget Control Act of 2011.

Repayment

  • Repayment on a Federal Direct Loan begins the day after the student's six-month grace period has expired. The grace period begins when a student graduates, withdraws, or drops below half-time attendance during an academic term.
  • New: For Federal Direct Subsidized Loans disbursed on or after July 1, 2012 and before July 1, 2014, the interest subsidy is eliminated during the grace period. If the borrower does not pay interest during the grace period, the accrued interest will be capitalized (added to the principal balance of the loan).
  • Students can calculate repayments using a repayment calculator.

If a student borrows a Federal Direct Loan, he or she must contact the
K-State Office of Student Financial Assistance if he or she:

  • Drops below half-time attendance during an academic term.
  • Withdraws from Kansas State University.
  • Stops attending all scheduled courses.
  • Does not enroll for any academic term.
  • Changed his or her expected date of graduation.
  • Changed his or her name, local address, permanent address, or e-mail address.