Federal Direct Student Loans
If you plan on borrowing for college, federal student loans are the most common – and usually the best – loan options.
A Federal Direct Loan (subsidized and unsubsidized) is a fixed interest loan made to students by the U.S. Department of Education. Federal Direct Loans are based on the cost of attendance (as determined by St. Thomas) minus any other financial aid, such as scholarships, grants and work-study funds the student is receiving.
All students who are interested in receiving Federal Loans must submit the Free Application for Federal Student Aid (FAFSA) annually.
Processing Requirements
If you do accept a federal student loan, there are a couple things you have to do before you can receive the funds. See Loan Processing Requirements for more information.
Direct Loan Details
Eligibility Requirements
Generally, students are eligible if they:
- Are a U.S. citizen or eligible noncitizen.
- Have a valid Social Security number.
- Are registered with Selective Service.
- Are enrolled or accepted for enrolment in a degree or certificate program.
- Are enrolled at least half-time in your program of study.
- Maintain satisfactory academic progress.
- Have filed a Free Application for Federal Student Aid (FAFSA) for the academic year.
- Are not in default on a federal student loan or owe money on a federal student grant.
Subsidized & Unsubsidized
Federal Direct Subsidized Loans are need-based with interest paid by the federal government while the student is enrolled at least half-time (minimum of 6 credits). The amount of your Federal Direct Loan that is subsidized depends upon the results of your FAFSA and other financial aid that you may be offered.
For new Subsidized Direct Loans, disbursed on or after July 1, 2014, the federal government will also pay the interest through the six-month grace period.
Interest on unsubsidized loans accrues prior to repayment. The student has the option to make interest-only payments while they attend college or to defer payment (capitalization rules may apply).
Interest Rates & Fees
- Interest Rate: 5.50% (This fixed rate is effective July 1, 2023 through June 30, 2024.)
- The federal loan origination fee is 1.057%. This fee is deducted from each disbursement.
Annual Borrowing Limits
- First-Year → $5,500 - no more than $3,500 will be subsidized plus additional $4,000 unsubsidized if student is independent
- Sophomore → $6,500 - no more than $4,500 will be subsidized plus additional $4,000 unsubsidized if student is independent
- Junior → $7,500 - no more than $5,500 will be subsidized plus additional $5,000 unsubsidized if student is independent
- Senior → $7,500 - no more than $5,500 will be subsidized plus additional $5,000 unsubsidized if student is independent
Eligibility
Eligibility Requirements
Generally, students are eligible if they:
- Are a U.S. citizen or eligible noncitizen.
- Have a valid Social Security number.
- Are registered with Selective Service.
- Are enrolled or accepted for enrolment in a degree or certificate program.
- Are enrolled at least half-time in your program of study.
- Maintain satisfactory academic progress.
- Have filed a Free Application for Federal Student Aid (FAFSA) for the academic year.
- Are not in default on a federal student loan or owe money on a federal student grant.
Subsidized & Unsubsidized
Subsidized & Unsubsidized
Federal Direct Subsidized Loans are need-based with interest paid by the federal government while the student is enrolled at least half-time (minimum of 6 credits). The amount of your Federal Direct Loan that is subsidized depends upon the results of your FAFSA and other financial aid that you may be offered.
For new Subsidized Direct Loans, disbursed on or after July 1, 2014, the federal government will also pay the interest through the six-month grace period.
Interest on unsubsidized loans accrues prior to repayment. The student has the option to make interest-only payments while they attend college or to defer payment (capitalization rules may apply).
Interest Rates & Fees
Interest Rates & Fees
- Interest Rate: 5.50% (This fixed rate is effective July 1, 2023 through June 30, 2024.)
- The federal loan origination fee is 1.057%. This fee is deducted from each disbursement.
Borrowing Limits
Annual Borrowing Limits
- First-Year → $5,500 - no more than $3,500 will be subsidized plus additional $4,000 unsubsidized if student is independent
- Sophomore → $6,500 - no more than $4,500 will be subsidized plus additional $4,000 unsubsidized if student is independent
- Junior → $7,500 - no more than $5,500 will be subsidized plus additional $5,000 unsubsidized if student is independent
- Senior → $7,500 - no more than $5,500 will be subsidized plus additional $5,000 unsubsidized if student is independent
Frequently Asked Questions
Log in to Murphy Online using your username and password and do the following:
- Select "Financial Aid"
- Select "Award Offer"
- Confirm the correct "Award Year" is selected
- Scroll to the "Loan" section and accept, decline or modify each offered loan in the "Take Action" column
- Click "Submit" to confirm your decision
Please review the disbursement schedule for the appropriate term of enrollment.
A promissory note is a binding legal document that lists the conditions of your loan and the terms of repayment. Instead of completing a promissory note every year, a Master Promissory Note (MPN) is a multi-year promissory note that only has to be completed once while attending St. Thomas. The MPN will simplify the processing of your loan(s).
The student borrower must complete the MPN for a Federal Direct Subsidized/Unsubsidized Loan online via the Federal Student Aid website. Log in using your FSA ID username and password. Open the “Loans and Grants” drop-down menu in the toolbar and select “Master Promissory Note (MPN)” and click the “Start” button next to the “I’m an Undergraduate Student” section to begin.
The FSA ID consists of a username (or verified email address) and password that gives you access to Federal Student Aid’s online systems and serves as your legal signature when completing electronic documents.
Visit Federal Student Aid and click "Create an Account" to learn what your FSA ID can be used for and how to apply.
Entrance counseling provides an overview of the Direct Loan Program, including information needed to successfully repay the loans that you’ll be receiving to help pay the cost of college. Topics include:
- Understand your loans
- Manage your spending
- Plan to repay
- Avoid default
- Make finances a priority
First-time borrowers are required to complete entrance counseling prior to receiving a loan to ensure that you understand your responsibilities and obligations.
How to Complete Entrance Counseling
To complete entrance counseling, log in to Federal Student Aid, open the "Loans and Grants” drop-down menu in the toolbar and select “Loan Entrance Counseling.”
Exit counseling provides important information needed to repay your federal student loans successfully. Topics include:
- Understand your loans
- Plan to repay
- Avoid default
- Make finances a priority
How to Complete Exit Counseling
To complete exit counseling, log in to Federal Student Aid, open the “Loan Repayment” drop-down menu in the toolbar and select “Loan Exit Counseling.”