Ford Federal Direct Loan Program
Direct loans are lent by the federal government, rather than commercial lending institutions. The University's Office of Student Finance (OSF) administers the loans; determines your loan eligibility; approves the loan; confirms the promissory note, when necessary; receives the funds from the federal government; and credits the loan amount directly to your University student account.
Four types of loans are included in this program:
- Ford Federal Direct Subsidized Loan
- Ford Federal Direct Unsubsidized Loan
- Ford Federal Direct Graduate PLUS Loan (for graduate and professional students)
- Ford Federal Direct Parent PLUS Loan
The four direct loan programs have these common criteria:
- Loan periods may not exceed a nine-month academic year.
- Loans can only cover consecutive terms of at least half-time enrollment.
- Loans are capped by annual and aggregate borrowing limits.
- Loan limits include summer term.
Direct Subsidized Loan
Borrowers who demonstrate financial need may qualify for a Direct Subsidized Loan. The interest on subsidized loans is paid by the government while you are in school or in deferment.
Visit the Direct Loan student gateway for complete terms and details of the Direct Subsidized Loan
Direct Unsubsidized Loan
Direct Unsubsidized Loans will accrue interest starting from the date of disbursement and continue to accrue interest throughout in-school status. You can choose to make interest payments while you are in school or have the interest capitalized (added to the loan balance). Capitalizing interest increases the amount of your loan.
Visit the Direct Loan student gateway for complete terms and details of the Direct Subsidized and Unsubsidized loans.
Direct Graduate PLUS Loan
If you need to borrow funds beyond the federal Direct Unsubsidized loan limits, you may be able to participate in the William D. Ford Federal Direct Graduate PLUS Loan program.
Visit the Direct Loan student gateway for complete terms and details of the Direct Graduate PLUS Loan.
Borrowers often compare Graduate PLUS Loan vs. private loans.
While credit checks are required to be eligible, credit criteria are less restrictive than those for most private student loans. If you do not meet the credit requirements, you may still qualify for the loan if you have someone who does meet the credit requirements endorse the loan. An endorser, unlike a co-signer, is not liable for your Graduate PLUS loan debt if you become permanently disabled or die.
Master promissory note
Before the loan can be disbursed, you must complete a separate master promissory note (MPN). Read carefully all of the terms and conditions of the Graduate PLUS Loan explained in the MPN. By signing the MPN, you promise to repay the loan. You can sign the required MPN electronically with your U. S. Department of Education-issued PIN. If you don't already have their PIN, you can request one on the official PIN site.
The Graduate PLUS MPN can be used for one or more loans in one or more academic years. This means that, in most cases, you may receive additional Direct PLUS loans for up to 10 years without completing a new PLUS MPN.
Direct Parent PLUS Loan
Parents of dependent students may be able to borrow from a non-need-based program, the Ford Federal Direct Parent PLUS Loan Program. The parent may borrow an amount up to the cost of attendance minus other financial aid. At disbursement, the funds will first be transferred into the student's University account to pay for on-campus charges, e.g., tuition and fees, room and board, and other school charges. If any money remains, the parent of the student will receive the balance, unless the parent designates that the student should be the recipient.
Visit the Federal Student Aid website for complete terms and details of the Direct Parent PLUS Loan.
For instructions on how to apply for a Parent PLUS loan, please see our Quick Guide here: z.umn.edu/faares.
Deferment and repayment
There is no grace period for a Parent PLUS Loan. Repayment begins 60 days after the last disbursement of the loan. Parent borrowers must call the Direct Loan Servicing Center (DLSC) at 1-8004-FED-AID to request a deferment based on the dependent student's enrollment status.