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 responsibilities.
Please note that single semester loans will be split into two disbursements. This means that if you take a loan for the fall only, the spring only or the summer only, the first half of the disbursement will occur as normal and the second half of the disbursement will follow 24 hours later.
Subsidized Direct Loan Eligibility is Limited to 150% of an Academic Program
Effective for new Direct Stafford Loans for which the first disbursement is made on or after July 1, 2013: Subsidized Direct Loan eligibility is limited to a maximum of 150% of the student’s current academic program length.
- Borrowers may receive Subsidized Direct Loans for no more than 150% of the length of the current academic program (ex: 6 years for a 4 year degree)
- Once a borrower has received Subsidized Direct Loans for 150% of the length of their program, the borrower’s future Subsidized Loan eligibility will end.
- A student who has received Subsidized Direct Loans for 150% of the length of their program and continues enrollment beyond that point will lose all subsidies on previously received Subsidized Direct Loans and would be required to pay all accumulated interest.
This policy is in addition to, and not in place of, the lifetime aggregate loan limits currently in place.
For more information, please review the U.S. Department of Education Federal Student Aid announcement concerning this time limitation
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.
- Under the new legislation — for each academic year — the interest rate for all new Direct Loans first disbursed on or after July 1, 2013, will be a fixed rate set to the U.S. Treasury 10-year note, plus add-ons for each category of borrowers.
- 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 and the Grace Period. Repayment periods are not subsidized. The current interest rate for a Direct Subsidized Loan first disbursed between July 1, 2015, and June 30, 2016 is 4.29%.
- 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 first disbursed between July 1, 2015, and June 30, 2016 is 4.29%.
- 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.
- The current interest rate for a Direct Unsubsidized Loan for Graduate and Professional students first disbursed between July 1, 2015, and June 30, 2016 is 5.84%.
- 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 6.84%.
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 6.84%.