UW Colleges Financial Aid
Direct Loans Glossary
- Direct Loan Program
- Direct Loan Entrance Counseling
- Direct Loan Master Promissory Note (MPN)
- Direct Subsidized Loan
- Direct Unsubsidized Loan
- Direct Parent PLUS Loan
Direct Loan Program
The William D. Ford Federal Direct Loan Program, also known as Direct Loans, provides loans to student and parent borrowers directly through the U.S. Department of Education rather than through a bank or other lender.
Direct Loan Entrance Counseling
Before receiving a student loan, all borrowers must complete a Loan Entrance Counseling session. This quick and easy interactive counseling session provides useful tips and tools to help students develop a budget for managing educational expenses and understand loan responsibilities.
Direct Loan Master Promissory Note (MPN)
A legally binding contract between the borrower and the U.S. Department of Education. The promissory note contains the terms and conditions of the loan, including how and when the loan must be repaid.
Direct Subsidized Loan
Also referred to as Federal Direct Subsidized Loan. It is a loan from the U.S. Department of Education made on the basis of the student's financial need and other specific eligibility requirements. The federal government does not charge interest on these loans while borrowers are enrolled at least half-time (6 credits), during a six-month grace period, or during authorized periods of deferment.
Direct Unsubsidized Loan
Also referred to as Federal Direct Unsubsidized Loan. It is a federally financed student loan made to students meeting specific eligibility requirements. Interest is charged throughout the life of the loan. The borrower may pay the interest on the loan while in school or allow the interest to be capitalized (added to the loan principal). Capitalizing the interest will increase the amount that you will repay over the life of the loan.
Direct Parent PLUS Loan
A Direct Parent PLUS Loan is available to the parent of a dependent student. The parent is the borrower and is responsible for repaying the loan. These loans are available regardless of financial need and the amount of eligibility depends on the total cost of education and other aid received. The parent applicant will be subjected to a credit check as part of the application process.