Direct Loans

Important Information: Time limitation on direct subsidized loan eligibility for first-time student loan borrowers effective July 1, 2013. Find out more.

The William D. Ford Federal Direct Loan Program

Direct Loans are low-interest loans for students and parents to help pay for the cost of a student's education after high school. The lender is the U.S. Department of Education (the Department), though the entity you deal with, your loan servicer, can be a private business.

With Direct Loans, you:

  • Borrow directly from the federal government and have a single contact—your loan servicer—for everything related to repayment, even if you receive Direct Loans at different schools.
  • Have online access to your Direct Loan account information via your servicer's website.
  • Can choose from several repayment plans that are designed to meet the needs of almost any borrower, and you can switch repayment plans if your needs change.  Visit Federal Student Aid to learn about the available repayment plans.

The Direct Loan Program offers the following types of loans:

  • Subsidized: for students with demonstrated financial need, as determined by federal regulations. No interest is charged while a student is in school at least half-time, and during deferment periods.
  • Unsubsidized: not based on financial need; interest is charged during all periods, even during the time a student is in school and during grace and deferment periods.
  • PLUS: unsubsidized loans for the parents of dependent students.  PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest is charged during all periods.
  • Consolidation: eligible federal student loans can be combined into one Direct Consolidation Loan.

Student borrowers are not required to begin making payments until after they drop below half-time attendance. See When you graduate or leave school for more information.

Note: All Federal Direct loans originated after July 1, 2012 will have an increased Origination Fee. The Budget Control Act of 2011, signed into law on August 2, 2011, eliminated the upfront rebate for all federal direct loans. Beginning October 1, 2016 for Federal Direct Subsidized and Unsubsidized loan disbursements will have a 1.069% origination fee, and Federal Direct PLUS loans will have a 4.276% origination fee applied at disbursement.

Undergraduate borrowers will begin accruing interest on new loans during the six-month grace period.  The Consolidated Appropriations Act of 2012, dated December 14, 2011, initiated Federal Direct Subsidized loan interest to begin accruing during the six-month grace period for all loans originated from July 1, 2012 through June 30, 2014.

Applying for a Loan

We are required to inform you upon entering into an agreement with us regarding a Title IV, HEA loan that the loan will be submitted to the National Student Loan Data System (NSLDS), and will be accessible by guaranty agencies, lenders, and schools determined to be authorized users of the data system. Student online access to NSLDS.

If you have been offered a student loan and are a first-time borrower, you will be required to complete the following steps. First time borrowers must accept loans by returning the award letter or loan amount request form to the ECU Office of Financial Aid either by mail or in person.

Upon completion of these steps, your loan will be certified at the Office of Financial Aid. Students and Parents, please be aware that the loan will be submitted to the National Student Loan Data System (NSLDS), and will be accessible by guaranty agencies, lenders, and institutions determined to be authorized users of the data system.

How to Apply for the Parent PLUS Loan

Below are the appropriate steps needed to apply for the Parent PLUS Loan. A parent must go through the application process for you to be eligible for the Parent PLUS Loan. More information about this loan.

  1. Complete and submit the PLUS Loan Request Form.  The student and the parent must sign the form, and include a requested dollar amount.  The requested dollar amount cannot exceed the student's Cost of Attendance minus all other financial assistance.
  2. Have your parent visit They will need to login using THEIR personal information (FSA ID and password).  The parent applying for the PLUS loan must be the same parent who completed and signed the PLUS Loan Request Form.
  3. The parent must complete the PLUS MPN (master promissory note) while on the website.
  4. Upon completion of the Parent PLUS Loan Request Form, a credit check will take place. Your parent will be notified if he/she has been approved or declined.
    1. If your parent has been approved:
      • They will need to complete the Parent PLUS Loan Master Promissory Note under their name.
      • Have your parent watch for an email from East Central University confirming amounts and other important elements of the PLUS Loan. Please give the university at least 24 hours to contact your parent. Your parent will need to respond to this email confirming he/she wishes to accept the loan and any other questions the university may ask.
      • Loan monies can take up to two weeks to be applied to your student account.
    2. If your parent has been denied. Your parent will be prompted to choose one of the following actions:
      • Appeal – Follow the directions on the website.
        • If your parent's appeal is approved he/she will need to complete the PLUS Loan Counseling.
      • Endorse – Follow the directions of the website.
        • If your parent's endorser is approved he/she will need to complete the PLUS Loan Counseling.
      • Keep Denial – The student will be eligible for an additional $2000 in unsubsidized loans per semester. East Central University will send your parent an email or letter within 24 hours asking how they would like to proceed. Once your parent has responded to the university, an email will be sent to your student email. You will need to respond to this email to confirm the amounts you would like added to your account.  Your parent may also contact your Financial Aid Counselor to explore other funding options.

What if I do NOT want this loan, but it has been awarded to me?
Just contact the ECU Financial Aid Office to decline the loan.

Student Loan Information


  • To be informed about financial aid application procedures, cost of attendance, aid available and renewal requirements.
  • To have confidential protection of your financial aid records. The contents of your financial aid file are maintained in accordance with the Family Educational Rights and Privacy Act (FERPA).
  • To appeal decisions made by the financial aid staff at East Central University. A written appeal must be submitted to the Office of Financial Aid.


  • To complete applications correctly and on time.
  • To read and understand all materials sent to you from the Office of Financial Aid and other financial aid agencies.
  • To keep copies of all forms and materials submitted.
  • To comply with the rules governing your aid programs.
  • To comply with the provisions of any promissory note and all other agreements you sign.
  • To enroll for the number of credit hours required (6 for Undergraduate and 5 for Graduate students) and maintain satisfactory academic progress.
  • To request personal assistance if you have questions or don't understand the information provided to you.

Amount You May Borrow

The amount you are eligible to receive is determined by many factors including the number of hours enrolled for the term. This amount will be outlined in your award letter. Consult with the financial aid office for additional information.

Loan limits:

The maximum amount you can borrow each year in Direct Subsidized and Unsubsidized Loans depends on your grade level and on whether you are a dependent student or an independent student. The following table shows the maximum amount of money you may borrow each academic year in Direct Subsidized and Unsubsidized Loans as well as the total or aggregate amount you may borrow:

Direct Stafford Loan Limits (Subsidized and Unsubsidized)
  Undergraduate students Graduate students
Dependent1 Independent2  
1st-year $5,500 ($3,500) $9,500 ($3,500) $20,500 ($8,500) for each year
2nd-year $6,500 ($4,500) $10,500 ($4,500)
3rd- and 4th-year $7,500 ($5,500) $12,500 ($5,500)


$31,000 ($23,000) $57,500 ($23,000) $138,500 ($65,500)
  1. Except those whose parents are unable to borrow a PLUS loan.
  2. These limits also apply to dependent students whose parents are unable to borrow a PLUS loan.
  3. The numbers in parentheses represent the maximum amount that may be subsidized.
  4. Graduate and professional students are not eligible to receive Direct Subsidized Loans for loan periods beginning on or after July 1, 2012.
  5. The aggregate amounts for graduate students include loans for undergraduate study.

The actual loan amount you are eligible to receive for an academic year is determined by your school and may be less than the maximum annual amounts shown in the chart above. The aggregate limits include both Direct Subsidized and Unsubsidized Loans and any subsidized and unsubsidized Stafford Loans received through the Federal Family Education Loan (FFEL) Program.
With a Direct PLUS Loan, the parent of a dependent student can borrow up to the cost of the student's attendance minus other financial aid the student receives.

Exit Counseling

Before you leave school or graduate, you are required to complete Exit Counseling.

The purpose of Exit Counseling is to:

  • select a repayment plan
  • review deferment, forbearance, and cancelation provisions
  • review loan consolidation
  • review serious consequences of delinquency and default

You will receive a notice when it is time for you to complete the Exit Counseling requirement. If the Exit Counseling requirement is not met within the designated time frame--typically one semester, you may experience a delay in the disbursement of your financial aid. Also, a hold will be placed on your account and no transcripts will be released.