Direct Subsidized Loan
The Ford Federal Direct Subsidized Loan is a need-based program subsidized by federal funds that allows you to borrow money interest-free while you are in school at least half time.
- The interest rate is fixed at 6.8 percent, effective July 1, 2006.
- For undergraduate students, the interest rate is fixed at 5.6% for loans disbursed between 7/1/09 though 6/30/10.
- For all other students, including graduate and professional students, the interest rate is fixed at 6.8% for loans disbursed between 7/1/09 and 6/30/10.
- As of July 1, 2009, the origination fee will drop to 1.5 percent with a 1 percent rebate added back to your disbursement.
- Repayment begins six months after you graduate, withdraw, or your enrollment drops below half-time status. Full details are provided on your promissory note.
Promissory note required:
If you accept a Federal Subsidized Direct Loan, you can sign the required Master Promissory Note (MPN) electronically at the U.S. Department of Education's MPN Web site. You will need to have your Department of Education (ED)-issued PIN to begin the process. If you do not have your PIN, please visit the official PIN site. After accepting your loan, you will be sent an e-mail directing you to complete your MPN. Your loan will not be disbursed until the University receives notification from ED that you have completed your MPN.
The electronic MPN can be used to make one or more loans for one or more academic years (up to 10 years). If you have completed a MPN since July 1, 1999, and you have not gone over 12 months between disbursements, you will not be required to complete an additional promissory note for your Direct Subsidized or Unsubsidized Loan.
Entrance counseling
First-time borrowers under this loan program are required to complete entrance counseling. Your loan(s) will not disburse until you have successfully completed the entire entrance counseling process.
Complete the session online at the U.S. Department of Education's student loan entrance counseling site.
Once at the site, make the selection corresponding to your loans:
- select the “Stafford Loan” option if you are a first time borrower of a Subsidized and/or Unsubsidized Federal Direct Loan.
- If you are new only to the Graduate PLUS loan program, select the middle option.
- If you are a first time borrower to both the Graduate PLUS loan program and the Ford Federal Direct Subsidized/Unsubsidized Loan program, select the third box and you will fulfill both entrance interviews.
After completing the tutorial and quiz, you will be guided through four required steps to notify the University of your successful completion. Please note in the third step you must add the University of Minnesota if not previously listed, and select "University of Minnesota – Twin Cities" when school selection is required. You must complete these steps to have your entrance counseling results sent to the University so your funds can disperse. You do not need to submit a paper copy to our office.
Make sure to print a copy of the Borrower's Rights and Responsibilities for your records.