Federal Stafford (Direct) Loans

Eligibility Requirements

In addition to program specific eligibility requirements students must also meet general eligibility requirements to be eligible for all federal grants and loans.  Contact your financial aid advisor if you have any questions regarding your eligibility for federal financial aid.

The University of Detroit Mercy participates in the Federal Direct Student Loan Programs. All Stafford, PLUS and Grad PLUS loans will be processed through the Federal Direct Loan Program. How to apply for Stafford loan

  • File the Free Application for Federal Student Aid (FAFSA). Most students who apply will qualify for a subsidized or unsubsidized Stafford Loan.
  • Summer semester Stafford loans require the FAFSA and a UDM summer aid application.
  • You must be enrolled at least half-time.
  • You must accept your loans in TitanConnect.
  • You must complete a Direct Stafford Loan Master Promissory Note (MPN). The Stafford MPN is good for ten years, provided at least one Stafford Loan is disbursed to you within the first 12 months after signing.
  • If you are a first time borrower, you must complete an Entrance Counseling.
  • Maintain Satisfactory Academic Progress for Financial Aid.

Difference between subsidized and unsubsidized Stafford

Subsidized Direct Stafford Unsubsidized Direct Stafford
Interest The federal government pays the interest on a subsidized loan while you are in school at least half-time, so the student has no interest payable or accruing while in school. Interest does accrue on an unsubsidized Stafford while you are in school. You may choose to pay interest while in school in order to avoid "paying interest on interest" (capitalizing interest).
Interest Rate for loans borrowed from July 1, 2016 to June 30, 2017 Interest rate fixed at 3.76%, once the loan goes into repayment. Interest rate fixed at 3.76, begins to accrue with final disbursement.  The interest rate for graduate students is 5.31%.
Interest Rate for loans borrowed from July 1, 2015 to June 30, 2016 Interest rate fixed at 4.29%, once the loan goes into repayment. Interest rate fixed at 4.29%, begins to accrue with final disbursement.  The interest rate for graduate students is 5.84%.
Loan Origination Fees Stafford Loans require a 1.068% origination fee. After October 1, 2016 the fee will be 1.069% Stafford Loans require a 1.068% origination fee. The loan origination fee for graduate students is 4.272%.  After October 1, 2016 the fee will be 1.069% for undergraduates and 4.276% for graduate students.
Repayment 10 to 25 years 10 to 25 years

Disbursement

Funds are generally disbursed to student accounts at the beginning of each semester. Once the student account is paid in full, any remaining funds are disbursed to the student.

Repayment and consolidation

When you near graduation (or drop below half-time) you will be given information on loan repayment and consolidation. This is referred to as Exit Counseling or Exit Interview.  Repayment information, including repayment plans and sample loan repayment schedules can be found on the Federal Student Aid web site.

Additional Information about U.S. Department of Education Loan Programs

Federal Student Aid, an office of the U.S. Department of Education is a great resource for federal loan programs and other types of financial assistance.