New Mexico State University participates in the William D. Ford Federal Direct Loan Program. Loans made through this program, and the program itself, are referred to as Direct Loans. Eligible students and parents borrow directly from the U.S. Department of Education at participating schools. Direct Loans include Subsidized and Unsubsidized Direct Loans (also known as Direct Subsidized Loans and Direct Unsubsidized Loans), Direct PLUS Loans, and Direct Consolidation Loans. You repay these loans directly to the US Department of Education.
Student loans, unlike grants and work-study, are borrowed money that must be repaid, with interest, just like car loans and home mortgages. You cannot have these loans canceled because you didn’t like the education you received, didn’t get a job in your field of study or because you’re having financial difficulty. Loans are legal obligations, so before you take out a student loan, think about the amount you’ll have to repay over the years and review your borrower rights and responsibilites.
About your Direct Subsidized/Unsubsidized Loan
- Direct Loans (Subsidized and Unsubsidized) are made to students attending school at least half time.
- The U.S. Department of Education is the lender, and you receive the loan money through your school.
- You may receive a Direct Subsidized Loan, a Direct Unsubsidized Loan, or both for the same academic year.
- A student qualifies for a Direct Subsidized Loan based on financial need, as determined under federal regulations.
- A student’s need is not a factor in determining eligibility for a Direct Unsubsidized Loan. Students may qualify for a Direct Unsubsidized Loan regardless of their financial need.
- A Direct Subsidized Loan is a loan on which the interest is paid by the Federal Government. Currently, Subsidized Direct Loans have the interest paid during the student’s In School Deferment period. Grace periods and repayment periods are not subsidized. Current interest rates for a Direct Subsidized Loan are 3.4%.
- A Direct Unsubsidized Loan is a loan on which interest is compounded during the In School Deferment period, the grace period and the repayment period. The current interest rate for a Direct Unsubsidized Loan is 6.8%.
- As it stands now, first bachelor’s degree seeking students may receive both Subsidized and Unsubsidized Direct Loans for a single academic year, if eligible. Second bachelor’s degree seeking students may also receive both Subsidized and Unsubsidized Direct Loans, if eligible. Graduate students may only receive Unsubsidized Direct Loans.
- Branch Campus students will only receive Subsidized Direct Loans up to the sophomore level. To receive an Unsubsidized Direct Loan, a branch student must make a specific request to their Branch Financial Aid Office.
To apply for a Federal Direct Subsidized or Unsubsidized Loan please complete the
Free Application For Federal Student Aid, FAFSA.
About your Federal Direct Parent PLUS and Graduate PLUS Loans
Federal Direct Parent PLUS Loan
The Federal Direct Parent PLUS Loan is an Unsubsidized Direct Loan for parents of dependent students. A Federal Direct Parent PLUS Loan enables parents with good credit histories to borrow money. The Federal Direct Parent PLUS Loan does not require demonstrated financial need. Repayment begins 60 days after the last loan disbursement. To apply, parents must complete a separate Federal Direct Parent PLUS Loan Application provided on the Department of Education’s website. The Parent PLUS Loan is a fixed interest rate of 7.9%.
Apply for a Federal Direct Parent PLUS Loan
Federal Direct Graduate PLUS Loan
Students pursuing a graduate or professional degree can borrow from the Federal Direct Graduate PLUS Loan Program. The terms and conditions applicable to Federal Direct Parent PLUS Loans (made to parents of dependent students) also apply to PLUS Loans made to graduate and professional degree students. Unlike Parent PLUS applicants, graduate and professional degree student PLUS applicants must file a Free Application for Federal Student Aid (FAFSA).
In addition, graduate and professional degree students must have their annual loan maximum eligibility under the Federal Direct Loan program determined by the school before they apply for a PLUS Loan. A requirement is that the applicant not have an adverse credit history. The Graduate PLUS Loan is a fixed interest rate of 7.9%.