In March, 2010, President Obama signed the Health Care and Education Affordability Reconceliation Act of 2010.  This bill eliminates the Federal Family Education Loan Program (FFEL) effective July 1, 2010.  All federally backed loans will now go through the Direct Loan Program. 

The primary difference between loan programs is the source of funding. All Federal Direct Loans are funded by the U.S. Department of Education, via the U.S. Treasury. Interest rates, fees and repayment options will be the same for all borrowers. In contrast, the FFEL program received funds from various banks and private lending institutions, creating multiple points of contact and, at times, varying interest rates, fees and repayment options.

The Federal Direct Loan Program offers:
• Stable funding. Because the program is backed by the U.S. Treasury, it is shielded from the volatility of the credit markets or from banks potentially withdrawing their participation.
• A lower interest rate for PLUS loans. Through Direct Lending, the interest rate drops from 8.5 to 7.9 percent.
• An Upfront Origination Fee Rebate that encourages responsible borrowing and repayment. Upon repayment, you must make your first 12 monthly payments on time for the rebate to become permanent.
• A simpler, streamlined process in which you are no longer required to select a lender or servicer.
• No loan sales. Your loan(s) will never be sold.
• A Public Service Loan Forgiveness program for students working full-time in low-income government and not-for-profit public service jobs.

No.  You are only able to borrow a Stafford, Parent PLUS or Grad PLUS loan through the Direct Loan Program.

 No.  The limits are as follows:




Unsubsidized Dependent*

Unsubsidized Independent

First Year




Second Year




Third Year and beyond





*A dependent student as defined by the Department of Education is a student who is under 24,single, no dependents, and not serving in the active military. A student who meets any of these criteria will be considered Independent.


To cover the remaining costs, a Dependent student can be awarded the Direct Parent PLUS loan. The parent can borrow up to the cost of attendance to pay for any remaining tuition balance and living expenses. An Independent student will only be able to apply for a Private loan.



Graduate students can only borrow the Unsubsidized Stafford Loan and cannot borrow more than $20,500 per award year. To cover the remaining costs, a Graduate student will be able to apply for a Direct Grad PLUS loan.

  • 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, during the grace period, 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 or for graduate /professional students. PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest is charged d uring all periods.
For Undergraduates, the lifetime maximum limit is
   $23,000   Subsizided Stafford loan
   $57,500   Total Stafford loan including Subsidized Stafford
For Graduates, the lifetime maximum limit is
   $  138,500   Unsubsidized Stafford loan

Interest rates for Federal Direct Unsubsidized Stafford Loans are the following:

Undergraduate Subsidized Loan


Undergraduate Unsubsidized Loan


Graduate Unsubsidized Loans


The interest rate for Federal Direct Parent PLUS and Graduate PLUS Loans is 6.84 percent.

Federal Direct Loan Programs Fee Schedule
(for loans disbursed after 07/01/2012)

Direct Loans

Loan Type

Origination Fee


Federal Direct Subsidized Stafford Loans



Federal Direct Unsubsidized Stafford Loans



Federal Direct Parent PLUS Loans and Graduate PLUS Loans



I've already done this once. Do I have to complete it again?


Even if you had a Direct Loan from a previously attended college or a FFELP loan for a previous academic year at SCI-Arc, SCI-Arc is requiring a new Entrance Counseling completion to comply with federal requirements.  
Please NOTE:  Loans will not be disbursed until the Entrance Counseling is completed.

Credit check & endorser alternative

When you apply for a Direct PLUS Loan (either Parent PLUS or Graduate PLUS), the Department will check your credit history. To be eligible to receive a PLUS loan, you must not have an adverse credit history. If you are determined to have an adverse credit history, you may still receive a Direct PLUS Loan if you obtain an endorser who does not have an adverse credit history. An endorser is someone who agrees to repay the Direct PLUS Loan if you do not repay the loan. If you are a parent borrowing on behalf of your dependent student, the endorser may not be the student on whose behalf a parent obtains a Direct PLUS Loan. In some cases, you may also be able to obtain a Direct PLUS Loan if you document to our satisfaction that there are extenuating circumstances related to your adverse credit history.