Program Description

The Direct Loan Program is the best financing option for a student to pursue and should be considered before any private educational loan options.  The loan is available to students regardless of the level of financial need. Direct Loans are funded by the U.S. Department of Education through Villanova University and are managed by federal loan servicers, under the supervision of the Department of Education. 

Subsidized Loan

This federal education loan is available to students who demonstrate financial need. It is available to students accepted/enrolled on at least a half time basis in an undergraduate or graduate degree program.

Unsubsidized Loan

This federal education loan was established by the federal government for students who are not eligible or have limited eligibility for the Subsidized Direct Loan. Students may borrow under the same terms as the Subsidized Direct Loan program with one exception: the government does not pay the interest on an Unsubsidized Loan (note: see difference in interest rate below).  The student either pays all interest that accrues on this loan during the time of enrollment, grace period and repayment, or may capitalize the interest during the period of enrollment.

Loan Amounts

There is a $31,000 total borrowing limit for dependent undergraduate students excluding those whose parents are unable to borrow a Direct PLUS Loan and a $57,500 limit for independent undergraduate students and dependent undergraduates whose parents are unable to borrow a Direct PLUS Loan of which no more than $23,000 may be in Subsidized Loans. Graduate students may borrow a total of $138,500, however, no more than $65,500 of this amount may be in Subsidized loans; includes loans for undergraduate students.

Lender

Direct Loans are funded by the U.S. Department of Education through Villanova University. Under the supervision of the Department of Education, the following servicers are assigned to manage all Direct Loans:

• NelNet
• Sallie Mae
• Great Lakes
• ACS
• FedLoan Servicing (PHEAA)

One to two weeks after the first disbursement, students will receive a mailing notifying them of their selected loan servicer.

Disbursements

Direct loans are equally disbursed, usually at the beginning of each term for loans that will be disbursed over two terms (academic year). Disbursements will be made directly to the student's account . All first time Direct  loan borrowers at Villanova University must complete an entrance interview and an MPN (Master Promissory Note) prior to the disbursement of any funds. You may complete the interview at www.studentloans.gov. All borrowers also need to complete a Direct Loan MPN at www.studentloans.gov.

Fees

Fees are deducted from the loan funds at the time of disbursement and are included in the amount a student will pay back.  For Direct Loans that are first disbursed between July 1, 2011 and June 30, 2012, there is a fee of 1 percent of the loan, deducted proportionately from each loan disbursement. For a Direct Loan, the entire fee goes to the government to help reduce the cost of the loans. Also, if you don't make your loan payments when scheduled, you may be charged collection costs and late fees.

Interest

The accruing interest while in school is paid by the Federal government during your in-school, deferment and grace periods for subsidized borrowers. The interest during these periods is the responsibility of the borrower for unsubsidized loans. Interest will be billed quarterly and it is recommended that unsubsidized borrowers pay the interest at this time. Otherwise unpaid interest will be capitalized for unsubsidized borrowers at the end of the grace period.

Interest Rates

The interest rate on Subsidized Loans will be:

* Current interest rate on Direct Unsubsidized Loan 6.8%.

Grace Period

Six months after graduating, withdrawing or dropping below half-time enrollment.

Repayment

Begins after the grace period. May be delayed by deferment options available to borrowers. Repayment may extend up to 10 years, or may be extended up to 25 years depending on the amount owed and type of repayment plan selected. A minimum payment of $50 per month is required while in repayment. Consolidation is also available. For more information visit the Direct Consolidation Loan site.

Deadlines

If you wish to apply for a loan for the 2011-2012 academic year, you need to complete the 2011-2012 application instructions for aid.  Applying for the loan late may delay your funds and possibly cause you to incur University late fees, if your bills are not paid timely.

If you wish to apply for a loan for the 2012-2013 academic year, you need to complete the 2012-2013 application instructions for aid.  Applying for the loan late may delay your funds and possibly cause you to incur University late fees, if your bills are not paid timely.

Notes

The Direct Loan is an educational loan available to students accepted/enrolled on at least a half time basis in an undergraduate or graduate degree program. Students must complete a Master Promissory Note from the U.S. Department of Education. They must also file an initial FAFSA or the Renewal FAFSA.

Eligibility for a Direct Loan is based on cost of education, amount of other financial aid being received, as well as an expected family contribution towards educational costs.

Direct Loan Process for Students

1. Student completes the aid application process.  This includes: submitting the FAFSA, the College Board PROFILE (if applicable) or the VU Financial Aid Application (if applicable), signed tax returns schedules, and W-2's/1099 or 1099R. Deadlines for the aid process available here.
2. The Office of Financial Assistance will review the results of the aid application and determine the amount of Direct Loan Eligibility.
3. Each aid applicant will receive a notice of aid eligibility from the Office of Financial Assistance.
4. Students should go to www.studentloans.gov and complete the Master Promissory Note (MPN).
5. First time borrowers at Villanova University (Freshmen/Transfers/Graduate Students) must complete Entrance Counseling.  If you have not already done so, log on to www.studentloans.gov and complete Entrance Counseling.
6. Direct Loan proceeds will be credited to the student account at the beginning of the academic year as long as all necessary requirements are complete.
7. Students interested in loan assistance for the summer term must contact the Office of Financial Assistance.