Federal Direct Student Loans

Basic Information

A Federal Direct Student Loan is a government-issued loan, with beneficial terms, offered to eligible students in accredited American institutions of higher education. Direct Loans are available to undergraduate students as Direct Subsidized Loans and Direct Unsubsidized Loans.

If you qualify for a Direct Subsidized Loan, the federal government (U.S. taxpayers) will pay the interest while you remain in school at least half-time pursuing a degree. Subsidized loan eligibility is based on financial need as determined by the federal need analysis. (Thomas Aquinas College uses a different need analysis to determine your eligibility for institutional aid.) If you are not eligible for a Direct Subsidized Loan, you may always apply for a Direct Unsubsidized Loan. With an unsubsidized loan, interest begins to accrue while you are in school. Interest on an unsubsidized loan may be paid quarterly, or accrued until the borrower enters repayment. It is possible to receive both a Direct Subsidized Loan and a Direct Unsubsidized Loan for the same period. The total of your combined Direct Loans may not exceed the annual loan limits for your grade level.

The amount of the student loan that is included in your financial aid package each year is usually less than the amount you are actually eligible to borrow. The following table shows the amounts a dependent student is usually able to borrow through the federal Direct Student Loan program each year versus the amount the College's Financial Aid Office will include in your aid package. If you want to increase or decrease the amount of your Direct Student Loan, contact the Financial Aid Office and we will revise your financial aid package accordingly.

Maximum Annual Direct Loan Limits and Thomas Aquinas College’s Loan Expectations 2025-2026 Academic Year
	Total Subsidized and Unsubsidized Limits for a Dependent Student	The College’s Initial Loan Expectation
1st year	$5,500 total, with up to $3,500 subsidized	$4,500
2nd year	$6,500 total, with up to $4,500 subsidized	$5,500
3rd year	$7,500 total, with up to $5,500 subsidized	$6,500
4th year	$7,500 total, with up to $5,500 subsidized	$7,500

How to Apply

All first-time Direct Loan borrowers will need to complete the following three steps to apply for a Direct Subsidized or Unsubsidized Loan.

Important: To complete the first two steps, you will need your FSA ID (the same FSA ID used to complete your FAFSA). If you don't know whether you have an FSA ID, you can easily check at https://studentaid.gov.

Step One: Complete the Online Direct Loan Entrance Counseling

If this is the first time that you are applying for a Direct Loan at Thomas Aquinas College, you are required to complete Loan Entrance Counseling online. (If you had a Direct Loan in a prior year at Thomas Aquinas College you have already completed the Loan Entrance Counseling.)
Go to the Federal Student Aid website, sign in using your FSA ID, then click “Start”. Enter the necessary information and complete the exercises found there.

Step Two: Complete a Federal Direct Loan Master Promissory Note (MPN) Online

Additional information you will need to complete your Federal Direct Loan MPN includes:

Your driver's license number (if you have one) and
The full name, address, and telephone number of two personal references who have known you for at least three years. The first reference should be a parent or legal guardian. The other reference must have a different U.S. address.

Go to the Federal Student Aid website and sign in using your FSA ID. Click the first "Start" button ("MPN for a Subsidized/Unsubsidized Loans”). Fill in and submit the necessary information. (If you had a Direct Loan in the prior year at Thomas Aquinas College you have already completed the MPN. You do not have to complete another.)

Steps One and Two should take approximately 30 minutes each. Allow time to complete each step in a single session. If you decide to exit the website before completing a step, you will be required to begin that step again.

After each step is completed, the Financial Aid Office at Thomas Aquinas College will receive an electronic notification.

Step Three: Accept your Direct Loan

Review the Financial Aid Summary you received from Thomas Aquinas College. Sign and complete the Financial Aid Summary and return it to the Financial Aid Office to accept the dollar amount of the Direct Loan(s) reported there.
If you wish to increase the amount of your Direct Loan(s) to finance a portion of your student payment, your parent payment, or to pay for other education-related expenses, contact the Financial Aid Office. A revised Financial Aid Summary will be sent to you with the increased loan amount.
To protect you, federal regulations require the school to process the total amount of your Direct Subsidized Loan before processing any unsubsidized amount.

After all three steps are completed, the Financial Aid Office will be able to process your federal Direct Loan(s).

Additional Information

Disbursements
Disbursements are usually made in two installments, one each semester. The College will notify you when funds are received and deposited into your college account.

Advantages of the federal Direct Loan Program

Repayment is not required until six months after you leave school or drop below half-time status.
The interest rate is determined each June for new loans borrowed for the upcoming school year. Rates are fixed for the life of the loan. The 2024-25 interest rate is 6.53%.
Prepayment may be made at any time without penalty.
Payments may be deferred, extended, or reduced in cases of economic hardship.

Loan Fees
Direct Subsidized and Unsubsidized Loans have an origination fee of 1.057 percent that is retained by the lender to offset the cost of insuring the loan.

Loan Exit Information

Loan exit information is provided in the final semester of the school year to all graduating seniors with federal Direct Student Loans as well as to any student who has borrowed a Direct Student Loan and who withdraws before completing the program. Exiting students are asked to complete the on-line loan exit counseling session at https://studentaid.gov/. (Select Loan Repayment on the gray menu bar and click on “Loan Exit Counseling”.)

For more information, see the document entitled Direct Student Loan Entrance and Exit Counseling on our Regulatory Page.

Students are required to begin repaying their Direct Loan six months after they graduate, leave school, or drop below half-time attendance. Borrowers generally have 10 years to repay these loans. Under a level repayment plan, the monthly payment on $23,000 in Direct Loans with an interest rate of 6.53 percent would be $262. (See additional information about the Direct Loan Program.)