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2018-2019 Federal Direct Loan Information Form

Student Name______Student ID (if known)______

LastFirstMiddle

Permanent Address______

Street AddressCityStateZip

I request to borrow the following loan amounts (found on your financial assistance award letter for the academic year):

$______Subsidized Direct Loan amount

$______Unsubsidized Direct Loan amount

Your signature authorizesfinancial assistance to process Federal Direct loans in your name
Student Signature______Date______

First-time Federal Direct Loan borrowers MUST complete two steps onlineat funds will be credited to the student account. Check the boxes below indicating you have completed the following:

Complete

  • Direct Loan Master Promissory Note
  • Direct Loan Entrance Counseling

Federal regulations require that Simpson College collect your signature if you wish to allow your federal financial aid funds to cover miscellaneous charges on your student account. Miscellaneous charges may include any minor prior year balance, parking fees, bookstore charges, library fines or other related charges. By signing below, you authorize the use of your federal financial aid funds to cover miscellaneous charges. This authorization is rescindable at any time by submitting written notice to the office of financial assistance.

Miscellaneous Authorization
Student Signature______Date______

Return this completed form by any of the following methods:

MailEmailFax

Simpson 0

Office of Financial Assistance

701 N C Street

Indianola, IA 50125

Contact Karla Gilson, Loan Coordinator and Financial Assistance Counselor, at 515-961-1664 if you have any questions about your rights and responsibilities or the terms and conditions of federal student loans.

Important Terms to Know and Understand:

BorrowerThe borrowerfor Federal Direct Loans is the student.

DisbursementFunds will be received by electronic funds transfer for the loan disbursement to the school. Disbursements are scheduled for distribution on the basis of the loan period.

EntranceEntrance counselingis an online tutorial that teaches students about their Federal Direct Loans. This requirement

Counseling may be met online at .

GraceThe six-month grace period begins when the borrower ceases enrollment on at least a half-time basis. Federal Direct Subsidized borrowers will begin to accrue interest charges at the end of the grace period. Full interest and principal repayment begins at the end of the six-month grace period.

InterestInterest is the charge you will pay for the privilege of borrowing student loans. Federal Direct Subsidized and Unsubsidized Loan interest rates are set annually by the federal government. The interest rate for Subsidized and Unsubsidized Loans is 4.45% fixed.*

MasterThe standard promissory note for Federal Direct Loans, referred to as an MPN. The Federal Direct

Promissory Loan Master Promissory Note may be completed online at.

Note

OriginationAn originationfee is charged by the U.S. Department of Education for Federal Direct Loans. The origination fee is

Feededucted from the loan proceeds delivered to Simpson College. Loan origination fees are set by the federal government and were 1.066% for Stafford Loans at the time of publication.

ServicerLenders will often work with another organization to service student loans or may sell the loan to a servicer. The servicer may disburse the loan, collect the loan in repayment, provide interest billing to the borrower, and provide deferment forms. There are several different servicers performing these duties on behalf of the federal government in the Federal Direct Loan program.

SubsidizedThe federal government pays the interest onFederal Direct Subsidized Loanswhile the student is enrolled at least

Loanshalf-time. Interest accrual begins when the student enters repayment.

UnsubsidizedFederal Direct Unsubsidized Loansbegin accruing interest at disbursement. The borrower may make interest

Loanspayments or allow interest to accrue during the in-school period. Unpaid interest will capitalize at repayment.

Estimated Repayment Information for Federal Direct Loans:

4.45% Fixed Interest Rate
Balance at Repayment / Number of Payments / Estimated Payment Amount
$1,000 / 21 / $50
$5,500 / 120 / $57
$10,000 / 120 / $104
$15,000 / 120 / $155
$20,000 / 120 / $207
$25,000 / 120 / $259
$30,000 / 120 / $311

The interest rate for Federal Direct Subsidized Loans and Unsubsidized Direct Loans is 4.45% fixed.* The minimum monthly payment amount is $50 under the 10-year Standard Repayment Plan, but may be more depending on how much you borrow.

On average, undergraduate students at Simpson College borrow $24,422 in Federal Direct Loans with an estimated $253 monthly payment. The chart above provides estimated monthly payment amounts based on levels of Federal Direct Loan indebtedness at a 4.45% fixed interest rate.

*Interest rates and origination fees are set annually by the federal government. The interest rates and fees listed above were accurate at the time of publication.