A Federal Direct Loan is a low-interest loan available to students who are enrolled at least half-time in a degree-granting program and must:
be a U.S. citizen or a permanent resident, a U.S. national (includes natives of American Samoa or Swain's Island), a U.S. permanent resident who has an I-151, I-551 or I-551C Alien Registration Receipt Card
file the Free Application for Federal Student Aid (FAFSA).
maintain satisfactory academic progress as defined by College policy.
not owe a refund on a federal grant or be in default on a federal educational loan.
The Federal Direct Loan can be subsidized or unsubsidized but cannot exceed the annual limits provided under Program Requirements. The subsidized Federal Direct Loan is awarded on the basis of financial need as determined through the Free Application for Federal Student Aid (FAFSA). The Federal government pays interest on the loan while the student is enrolled at least half-time, through the grace period, and authorized deferment periods. An unsubsidized student loan does not qualify for a federal interest subsidy and therefore the interest will start to accrue on the loan immediately following disbursement.
If you choose to not pay the accruing interest, it will be added to the principal amount of your loan and will increase the amount you have to repay.
If you pay the interest as it accumulates, you'll repay less in the long run.
Payment of principal is deferred while students are enrolled in school at least half-time. After you graduate, withdraw, or drop to less than half-time enrollment, you will have a six-month grace period - during which time no payment on principal will be due. Repayment on the principal amount begins at the conclusion of the grace period. At repayment, the minimum monthly payment is $50. The maximum monthly payment is that amount that will repay your loans in 10 years. There is no penalty for early repayment.
The interest rate for the subsidized and unsubsidized Direct Loan, with a first disbursement on or after July 1, 2023 – June 30, 2024, is a fixed 5.50%.
Loan funds are disbursed via EFT (electronic funds transfer) to Hampden-Sydney in two disbursements, one at the beginning of each semester, and are credited directly to the tuition account.
For loans where the first disbursement is made on or after October 1, 2020, the federal loan fee is 1.057%.
How to Apply
for Federal Direct Loans
(Student Borrowers)
A first time Federal Direct Loan borrower must complete the on-line Federal Direct Loan Request Form, on-line Entrance Counseling, and the on-line Master Promissory Note (MPN). Use your FSA ID (or Username/Password) to complete entrance counseling and electronically sign the MPN at studentloans.gov. If you do not have an FSA ID, go to https://fsaid.ed.gov/npas/index.htm and click on "Create An FSA ID".
Click on the LOG IN button andenter your FSA ID (or Username/Password)Be sure to SIGN & SUBMIT so your master promissory note will be recorded.
Under COMPLETE AID PROCESS on the dashboard, select Complete A Master Promissory Note, then select I'm an Undergraduate Student - MPN for Subsidized/Unsubsidized Loans, and provide all information requested. After you open the html file to view your completed promissory note, be sure to click CONTINUE so your promissory note will be recorded.
Be sure to SIGN & SUBMIT so your master promissory note will be recorded.
Complete the Federal Direct Loan Request Form in TigerWeb.
Federal Direct Loan Request Form link will redirect you to the TigerWeb. With a successful login, you will be able to complete the Request Form as instructed
Refer to your financial aid award letter (not your billing statement) for the TOTAL (last column) amount of the subsidized and unsubsidized Federal Direct Loans you are eligible to borrow.
If you are a first-time borrower, Federal regulations require that loan counseling be completed before loan funds can be applied to your tuition account in the Business Office.
To help you understand your rights and responsibilities as you borrow federal loans for the first time, Federal Regulations mandate that you complete entrance counseling. The entrance counseling requirement must be met before the first disbursement of your loan(s) can be made to Hampden-Sydney. Some key points of entrance counseling are:
understanding the terms and conditions of your loan
understanding loan types and loan limits
tips for borrowing responsibly
avoiding default
deferment and payment plan options
Additional Eligibility
for Unsubsidized Federal Loan for:
independent undergraduates,
graduate students,
and dependent students whose parents are not eligible to borrow the Direct PLUS Loan:
$4,000 per year for first & second years of undergraduate study
$5,000 per year for remaining years of undergraduate study
$10,000 per year for graduate/professional
Program Requirements
Find information and program requirements for Federal Direct Loans here.
As you prepare to graduate from Hampden-Sydney, transfer to another school, attend graduate school, or enter the workforce, Federal Regulations mandate that you complete exit counseling. Exit counseling is intended to reinforce your understanding of the terms and conditions of your federal loan, as well as your rights and responsibilities regarding repayment, deferment, loan consolidation, and avoiding default.
Financial Literacy
The financial literacy links that follow offer information on valuable life skills, such as budgeting, borrowing, saving, using credit cards, opening bank accounts, managing debt, etc.
Federal Loan Servicers
Your loan servicer is assigned by the Department of Education following the origination and disbursement of your first Federal loan. Your servicer will contact you after the first disbursement on your loan is made and will continue to communicate with you throughout your college years and repayment. Find a list of loan servicers and contact information here.
National Student Loan Data System (NSLDS) provides information on all federal loans you have borrowed, i.e. Direct subsidized, Direct unsubsidized, and Perkins and the outstanding amount for each loan. Find here a step-by-step guide to using the NSLDS.
