Direct Subsidized Stafford Loan (must be repaid with interest)
Students enrolled in a FAFSA-eligible program at MUD may apply for a Direct Subsidized Stafford Loan. The Subsidized Stafford Loan is a need-based loan. The U.S. Department of Education generally pays interest while student is in school and during certain other periods. The interest rate is fixed for the life of the loan at 2.75% for loans first disbursed July 1, 2020 through June 30, 2021. A loan origination fee of 1.057% will be assessed. Repayment begins following a six month grace period. The grace period will begin after enrollment ceases or the student drops below half-time enrollment. Minimum monthly payment is $50 per month. Standard repayment period is ten years. Borrowers may not receive this type of loan for more than 150 percent of the length of their program of study; the U.S. Department of Education may stop paying interest if the student who received Direct Subsidized Loans for the maximum period continues enrollment.
To apply for a Direct Subsidized Stafford Loan, the student must first complete a Free Application for Federal Student Aid (FAFSA) which will be used to determine borrower eligibility. The student must also complete a Master Promissory Note. First-time Stafford Loan borrowers must complete entrance counseling. All students who borrow a Stafford Loan are required to attend exit counseling.