College of Prospective Students: Costs & Financial Aid: Direct Loans

Federal Direct Student Loans

Indiana Tech participates in the William D. Ford Federal Direct Student Loan program. A Federal Direct Loan is funded through the Federal government and requires the student to have a completed FAFSA on file. Students must achieve satisfactory academic progress at Indiana Tech and be enrolled at least half-time (six credit hours per semester). Students with loans currently in repayment, and not in default, may defer their payments while enrolled at least half-time.

Loan limits

The amount of loan funds received will be limited by the student's personal cost of attendance and aggregate loan limits. Please see below for a chart of loan limits based upon grade level for both dependent and independent students.

William D. Ford Federal Direct Student Loan Program

Borrowing limits based upon grade level.

Dependent Students

Grade Level

Subsidized Loan Eligibility**

Unsubsidized Loan Eligibility***

Freshman (1-30)

$3,500

$2,000*

Sophomore (31-60)

$4,500

$2,000

Junior (61-90)

$5,500

$2,000

Senior (91 or more)

$5,500

$2,000

Independent Students

Grade Level

Subsidized Loan Eligibility**

Unsubsidized Loan Eligibility***

Freshman (1-30)

$3,500

$6,000

Sophomore (31-60)

$4,500

$6,000

Junior (61-90)

$5,500

$7,000

Senior (91 or more)

$5,500

$7,000

Graduate (MBA, PhD)

N/A

$20,500

*In some cases, this amount may be increased if a parent applies for, and is denied, a ParentPLUS Loan.

** Subsidized loans are based upon financial need, as determined by the Department of Education and the student's FAFSA.

*** Unsubsidized loans are based upon the student's cost of attendance minus aid already awarded.

Understanding Responsibilities

Before accepting any loan offer, students should understand the difference between subsidized loans and unsubsidized loans, as well as the responsibilities of accepting a student Federal Direct Loan. Subsidized loans do not accrue interest while a student is enrolled at least half-time or during grace periods (grace periods are typically the six month time period after the last date of attendance). Financial need must be demonstrated in order to qualify for a subsidized loan. Unsubsidized loans do accrue interest, even while a student is enrolled and during grace periods. Students have the choice to pay interest costs as they accrue, or defer payment of the interest and add it to the loan principle. Financial need is not required to obtain an unsubsidized loan.

It is important that students understand the responsibilities of accepting a student Federal Direct Loan. If a loan offer is accepted, the student is borrowing money from the U.S. Department of Education and therefore agrees to repay it under the terms and condition of the loan. Loan information is sent to the National Student Loan Database System (NSLDS) and may be accessed by future schools, loan guarantee agencies and lenders. Students are not obligated to accept a loan offer, and may decline their loans at any time. Students accepting loans are encouraged to borrow responsibly and only borrow what they need.

Borrower Requirements

First time borrowers are required to complete both a Federal Direct Master Promissory Note (MPN) and Entrance Counseling before any funds may be posted to the student’s account. Borrowers who have previously taken out student loans and have completed an MPN within the last ten years through Federal Direct Loans are not required to complete a new MPN during this period. Both requirements may be completed by all borrowers online at www.studentloans.gov using the individual’s Department of Education PIN. (This is the four digit number used to sign and complete the FAFSA.) If you have forgotten you PIN, you may view this PIN by going to www.pin.ed.gov. Although this information is sent electronically to Indiana Tech, please be sure to print a copy for personal records.

Posting of Loan Funds

For students enrolled in the Traditional Day Program, funds are posted to student accounts shortly after their account is billed for the current semester's classes.

For students enrolled in the College of Professional Studies (CPS), funds are posted to student accounts shortly after their account is billed for the current session's classes. The billing of accounts happens during the third week of classes and aid pays out over the next few weeks. At the time a class has been completed, 25% of the student's semester loan funds are posted to the student's account. If a student is enrolled in more than one three-credit hour class in each session, loan funds are prorated accordingly.

Repaying Student Loans

Repayment of both subsidized and unsubsidized student loans begins six months after the student graduates, leaves school or drops below half-time enrollment in a degree seeking program. Students may access information on previous student loans, as well as an overall balance by visiting the National Student Loan Database System web site.

Students must also complete Federal Direct Loan exit counseling upon graduation or leaving school. Exit counseling will stress the importance of repaying student loans, but also give options for repayment plans and what a student can do if payments cannot be made on time. It is very important that payments are made on time as making late or no payments will negatively impact the student’s credit. Loans will go into a defaulted status once payments are behind by 270 days or more. Defaulted loans have very serious consequences on several levels for the student. There are always options before defaulting on a student loan. Students should not hesitate to contact their loan servicer or our office for help in finding what option is right for them.

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