What is a Federal Direct Loan?

UNI participates in the Direct Loan Program. This loan program allows students to borrow money through UNI directly from the federal government.

How does a student receive a Direct Loan?

First-time borrowers must complete the Master Promissory Note (MPN) online at http://dlenote.ed.gov or he/she may request a paper copy from the Financial Aid Office.

Students will sign only one promissory note that will be used for all of their Direct Loans at UNI. By using the MPN, students will not need to sign and submit a separate promissory note for each new loan. A student who borrows under the Direct Loan Program at UNI will be able to borrow under this one MPN for up to ten years.

What is the student agreeing to when he/she signs an MPN?

Students are agreeing to repay their lender (the U.S. Department of Education) all loans made to them under the terms of this MPN. They are also confirming that they understand multiple loans may be made to them under this note.

The MPN covers both the Federal Direct Subsidized Loan and the Federal Direct Unsubsidized Loan. The amount of subsidized and unsubsidized loans the student is eligible for is included on his/her Award Letter. The MPN does not show a specific loan amount because it also serves as the promissory note for future loans.

What is a subsidized loan?

This is a need-based loan. The government pays the interest for the borrower on this loan while he/she is enrolled at least half-time. Repayment of the principal and interest on the loan begins six months after the borrower ceases to be enrolled at least half-time. The federal government withholds an origination fee from each loan.

What is an unsubsidized loan?

If the student’s financial need limits his/her eligibility for the full grade-level maximum in the Federal Direct Subsidized Loan, he/she may borrow the remainder in the Federal Direct Unsubsidized Loan. This loan has a fixed interest rate of 6.8%, with the origination fee being the same as the subsidized loan. Interest begins to accrue the first day of disbursement, with the option for payments to be made quarterly or deferred until six months after the student ceases to be enrolled at least half-time. Direct Loans will contact the student to establish how he/she plans to pay the interest. If he/she defers the interest, it will be capitalized on the loan principal at the time repayment begins, which is six months after the student ceases to be enrolled at least half-time.

How much is the student eligible to borrow?

The student may qualify to borrow in one or both programs based upon his/her demonstrated “financial need” and the maximum loan limit per grade level.

Maximum Annual Combined Subsidized + Unsubsidized Loan Amounts (Includes fall, spring & summer)

NOTE: The loan amounts listed above cannot exceed the student’s cost of attendance minus other financial aid received.

Loan proceeds exceeding University charges are sent to the student in the form of a refund check.

Mid-year graduating students (December) may only borrow a portion of their loan limit.

How can the student cancel or reduce their loan(s)?

If the student wants to cancel or borrow less than what is stated on the Award Letter, he/she may change the amount by first drawing a straight line through the original loan amount approved and then printing the new reduced desired loan amount on the line provided OR the student may reduce the loan amount on MyUNIverse. A student may lower the amount of the loan, but may not increase the amount.