Federal Direct Loans

Who Is Eligible?

Federal Direct Loans are low-interest loans awarded to all students who are either U.S. Citizens or permanent residents. In addition, the student must be enrolled at least half-time and not in default or overpayment on other federal financial aid.

Amount of Eligibility

The amount you are eligible to receive is based on your grade level. The total net amount paid from Federal Direct Loans is 1% less than the gross amount due to the U.S. Department of Education Loan Fee. Dependent students can borrow the following for the academic year:

  • Freshman (0-29 units) - $3,500 + $2,000 in Direct Unsubsidized loans
  • Sophomores (30-59 units) - $4,500 + $2,000 in Direct Unsubsidized loans
  • Juniors and Seniors (60 units or more) - $5,500 + $2,000 in Direct Unsubsidized loans.  Actual amounts awarded may vary depending on other aid awarded to the student.

Interest Rate

Disbursement made on or after Disbursement made before  Interest Rate
July 1, 2008 July 1, 2009 6.0 percent
July 1, 2009  July 1, 2010 5.6 percent
July 1, 2010 July 1, 2011 4.5 percent
July 1, 2011  July 1, 2012  3.4 percent

The interest rates above are only for the Undergraduate Federal Direct Subsidized Loan.  Undergraduate Federal Direct Unsubsidized Loans are fixed at 6.8 percent and all Federal Direct Subsidized and Unsubsidized Loans for Graduate students are at 6.8 percent.

This interest rate is applicable while you are in school, during the grace period, during repayment and if you are in deferment or forbearance. The interest for Federal Direct Subsidized Loans is paid by the federal government while you are in school and during your grace period. The grace period is 6 months after you graduate or cease to be enrolled less than half-time.

If you are awarded the Federal Direct Unsubsidized Loan, interest accrues while in school and you are responsible for paying the interest while you are in school. You may elect to defer the interest payments; however, Whittier College encourages students to make monthly payments to avoid capitalization. Capitalization is the adding of accrued interest to the principal balance at repayment.


Your Federal Direct Loan funds will be sent in via EFT (Electronic Funds Transfer) and will be applied directly to your Whittier College student account. The first disbursement will arrive in the fall semester and the second disbursement in the spring. Entrance Counseling, a completed Master Promissory Note (MPN) and a completed Financial Aid Conditions and Authorization form are required before funds are allowed to disburse. Provided that the all financial aid requirements are complete, your Federal Direct Loan funds will be applied to your Whittier College student account seven days prior to the first day of class.


Repayment on the Federal Direct Loan will begin 6 months after you have graduated or cease to be enrolled at least half-time. There is no prepayment penalty. Standard repayment may take 10 years. There are many loan forgiveness programs which may forgive all of part of the Federal Direct loan.

How To Apply for the Federal Direct Loan

  1. Students must have completed the Free Application for Federal Student Aid (FAFSA) for the appropriate year to be considered for this loan.
  2. Accept your Federal Direct loan on your Whittier College financial aid award letter or accept the award at my.whittier.edu 'My Info.'
  3. Complete Entrance Counseling online. This information explains your rights and responsibilities as a Federal Loan borrower and is a federal requirement. New students and students who have not borrowed through a Federal Loan program are required to complete the Entrance Counseling online. Simply click on "Complete Entrance Counseling" once you complete the "Sign In" process. To sign in, you will need:

    Your PIN Code (used to sign the FAFSA)
    Your Social Security Number
    Your Date of Birth
    A valid email address

  4. Complete the Federal Direct Loan Master Promissory Note (MPN) online.