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College of Liberal Arts

Federal Direct Loans

A Federal Direct Loan is a low-interest-rate loan for students that can be used to help pay for your college education. Please note, if you are graduating at the end of fall semester, review information on loan proration as your loan amounts will be impacted.

The Basics

Subsidized Vs. Unsubsidized

Subsidized If you meet certain financial need criteria (based upon information supplied on your FAFSA), the federal government will pay the interest on your federal Direct Subsidized loan while you attend school at least half-time or during times when you qualify for an authorized deferment.

Unsubsidized If you do not meet the financial need criteria (based upon information supplied on your FAFSA) to qualify for a Subsidized loan, you still can receive a federal Direct Unsubsidized loan. You are responsible for paying the interest while you are in school. If you do not make the interest payments, the interest will be added to your principal balance through a process called capitalization.

Interest Rates

Direct Loans (Subsidized and Unsubsidized) for undergraduate borrowers first disbursed on or after July 1, 2021 will have a fixed interest rate of 3.73%

Loan Fees

Direct Loans (Subsidized and Unsubsidized) for undergraduate borrowers first disbursed on or after October 1, 2021 will have an origination loan fee of 1.057%. This fee covers administrative costs of the loan.

Borrowing Limits

The annual borrowing limit is determined by your degree status grade level and your dependency status (based upon information you supplied on your FAFSA). In addition to annual loan limits, there are also lifetime Direct loan borrowing limits, also known as the aggregate limit.

Annual Limits Dependent Student Independent Student
First Year Undergraduate (0-29 credit hours earned) $5,500 $9,500
Second Year Undergraduate (30-59 credit hours earned) $6,500 $10,500
Third Year and beyond Undergraduate (greater than 60 credit hours) $7,500 $12,500

In addition to the annual borrowing limits, there is also an aggregate, or cumulative, lifetime borrowing limit.

Aggregate Limits Subsidized Total
Dependent Undergraduate $23,000 $31,000
Independent Undergraduate $23,000 $57,500


With either the federal Direct Subsidized or Unsubsidized loans, repayment on the principal begins six months after graduation, leaving school, or dropping below half-time status. There are multiple repayment plans ranging from 10 years to 30 years.

Entrance and Exit Counseling

New federal Direct Loan recipients are required to complete entrance counseling. New federal Direct Loan borrowers are notified and typically complete entrance counseling online as they sign the Master Promissory Note (MPN). Visit to complete entrance counseling and to sign the Master Promissory Note.

Exit counseling is required for all students who have received a federal Direct Loan and who are expected to graduate or will not be attending Rollins at least half-time. An exit interview is your opportunity to review the amount of your loans and your rights and responsibilities in repaying these loans.

Borrower's Rights and Responsibilities

  • Remember that the MPN certifies your loans for the maximum amount you are eligible to borrow. Because you may accrue debt with each year of your education, you should be certain that you need the full amount of your education loan each year. You can decline or reduce your loan amount each year.
  • You are required to repay education loans, even if you do not finish your academic program or your academic program does not meet your expectations.
  • You are responsible for notifying your school and lender if you have received student loans from more than one lender.
  • You must use money received from education loans for education-related expenses only.
  • You must notify your lender in writing of:
    • Name or address changes.
    • Failure to enroll at Rollins.
    • Failure to enroll on at least a half-time basis or for the loan period certified.
    • Withdrawal from school or reduction of attendance to less than half time.
    • Transfer from one school to another.
    • Graduation.
If you meet the eligibility requirements, you have a right to repayment deferments, which suspend principal loan payments for specified periods of time.

Loan Proration

Federal regulations require Rollins to prorate a dependent or independent undergraduate student's annual federal Direct loan limits when you enroll in one semester and will graduate in the same academic year. Typically, this impacts students who will graduate at the end of the fall semester.

Loan Proration Formula

Number of enrolled credit hours
--------------------------------------- X Annual Stafford loan limit
Number of credit hours in an academic year (24)

Loan Proration Example for Full-Time Enrollment

12 credits enrolled
--------------------------------------- X $5,500 Subsidized Loan = $2,750
24 academic year credits

12 credits enrolled
--------------------------------------- X 2,000 Unsubsidized Loan = $1,000
24 academic year credits

Loan Proration Example for Half-Time Enrollment

8 credits enrolled
--------------------------------------- X $5,500 Subsidized Loan = $1,815
24 academic year credits

8 credits enrolled
--------------------------------------- X $2,000 Unsubsidized Loan = $660
24 academic year credits