Federal Stafford (Direct) Loans

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.
  • 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 Interview.
  • 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, 2013 to June 30, 2014 Interest rate fixed at 3.86%, once the loan goes into repayment. The interest rate for graduate students is 5.41%. Interest rate fixed at 3.86%, begins to accrue with final disbursement.
Interest Rate for loans borrowed from July 1, 2014 to June 30, 2015 TBD TBD
Loan Fees Stafford Loans require a 1.072% origination fee. Stafford Loans require a 1.072% origination fee.
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 Exit Counseling or Exit Interview.