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Federal Direct Loans

The William D. Ford Direct Loan program is a low, fixed-interest rate educational loan program. Students must complete the Free Application for Student Aid (FAFSA) to determine eligibility for either the Federal Direct Subsidized or Federal Direct Unsubsidized Loan. Subsidized loans do not accrue interest while the student is in school. Unsubsidized loans do accrue interest from the time the loan is disbursed; however, borrowers may choose to defer payments while they are enrolled.

  • Federal Direct Loan amounts awarded by Colgate are less than the national average. 
  • The interest rate is set annually on July 1st, and borrowers lock in a fixed interest rate for the life of the loan.
  • A variety of loan repayment options are available. Repayment begins six months after the student is no longer enrolled at least half time.
  • Calculate loan repayment amounts by using the Federal Repayment Estimator.
This Federal Direct Parent Plus Loan enables parents to borrow directly from the federal government up to the cost of attendance, minus any financial aid already awarded. Only one master promissory note (MPN) is needed throughout the students' enrollment at Colgate. It is a credit-based loan and requires a parent to submit an electronic application to the Department of Education. The department will review your credit report for adverse credit history and notify you of their decision to approve or deny your application. In the event an application is denied, families can review alternative options, such as using an endorser or appealing, on the federal student aid website.

Current Borrowing Limits, Interest Rates, and Origination Fees

Federal Direct Loans are available to undergraduate students, regardless of family income, for up to $5,500 for the first year of school, $6,500 for the second year, and $7,500 for the third and fourth years.

Depending on a student’s financial need determined by the FAFSA, a portion of a student’s annual loan limit may be awarded in a Federal Direct Subsidized Loan. The Federal Direct Subsidized Loan limit for freshman is $3,500, for sophomores is $4,500, and for juniors and seniors is $5,500. After a student is awarded their Federal Direct Subsidized Loan eligibility, the remainder of their annual loan limit can be awarded in a Federal Direct Unsubsidized Loan. In some cases, a student is eligible for a Federal Direct Unsubsidized Loan only.

If a parent’s application for a Federal Direct PLUS Loan is denied, depending on their grade level, a student may be eligible for an additional $4,000 (freshmen and sophomores) or $5,000 (juniors and seniors) in a Federal Direct Unsubsidized Loan.

Graduate students may borrow up to $20,500 in a Federal Direct Unsubsidized Loan in an academic year.

The 2018-19 interest rate is fixed at 5.05% for both subsidized and unsubsidized loans for undergraduate students. The 2018-19 interest rate for unsubsidized loans for graduate students is fixed at 6.6%. In both portions of the program borrowers pay an origination fee of roughly 1%. 

The 2018-19 interest rate for the Federal Direct Parent PLUS Loan is 7.6% and borrowers pay an origination fee of roughly 4%.

A summary of this information can be found in our Federal Direct Loan Information Table and on the federal aid website

How to Apply for a Federal Direct Student Loan

Federal Direct Subsidized/Unsubsidized Loans

  • Complete the Free Application for Federal Student Aid (FAFSA).
  • E-mail finaid@colgate.edu with your Colgate ID number specifying the amount you intend to borrow in accordance with the loan limits described above.
  • First-time borrowers must log onto StudentLoans.gov to complete required Entrance Counseling and the Master Promissory Note (MPN).

Federal Direct Parent PLUS Loan

  • Complete the Free Application for Federal Student Aid (FAFSA).
  • Log-in to www.studentloans.gov with your parent FSAID and password and complete the Direct PLUS Loan application for parents. If approved, you must also complete a Master Promissory Note (MPN) online at studentloans.gov in order for the loan to disburse. We will automatically receive your application automatically within a few business days. 

Loans are disbursed evenly between the fall and spring semesters after the drop/add period has ended. If a credit balance results from a loan or other financial aid disbursement a refund will be made automatically.