Federal Direct Loans
Direct Loans are awarded as part of your financial aid package, along with any grants you are eligible to receive. IPFW students with Direct loans will borrow their funds from the federal government instead of from private banks and credit unions.
Unlike grants and scholarships, loans will not automatically be accepted for you. You will have to log into your myIPFW account and accept your loans. If you are a first time borrower, or if you have never taken Direct Loans at IPFW, you will have to complete the loan requirements below.
There is no actual application for Direct Loans. They are awarded to students who file a FAFSA, are not in default on prior student loans, and are not at the lifetime aggregate limit.
- There are 2 requirements that students must complete in order to receive Stafford Loan funds.
- The Direct Loan Master Promissory Note (MPN) is a promise to repay your loans once you are no longer enrolled in classes. It is completed online and IPFW is notified electronically in 1 to 2 business days when it is complete. You can check the status of your MPN at any time by logging back on to StudentLoans.gov and clicking on the View Completed MPNs button on the left hand side. You will need your FAFSA PIN to complete. If you don't know your PIN, you can request a duplicate PIN.
- The Direct Loan Entrance Counseling must also be completed to receive Stafford Loan funds. Entrance Counseling informs students of their rights and responsibilities, and is completed online and IPFW is notified electronically in 1 to 2 business days when it is complete. You will need your FAFSA PIN to complete. If you don't know your PIN, you can request a duplicate PIN.
You must designate IPFW (INDIANA PURDUE UNIVERSITY - Fort Wayne) as your school. IPFW will be notified that your requirements are complete and our system updated within 1 to 2 business days.
- Students who had Stafford Loans under the FFELP program (funds came from a lender) must still complete a Direct Loan Master Promissory Note (MPN)
- Signing a Direct Loan Master Promissory Note does not obligate you to take out a student loan. However, you cannot receive student loan funds unless an MPN is on file.
- You will still need to accept your loans on myIPFW once you have been awarded your financial aid package.
Read more about Stafford loans at The Department of Education's website and Federal Aid First.
Types of Direct Loans
There are two types of student loans; Subsidized and Unsubsidized. The difference between them is that the federal government will pay the interest on your Subsidized loan while you're in school. On an Unsubsidized loan, the interest will accrue while you're in school. You can either make payments on the interest while you're in school, or you can defer the interest until after you leave school and it will be added to your principal balance.
If you are unsure on how much you will need to borrow, we recommend visiting the Department of Education's website to learn about repayment options and costs.
Things to know about Direct Loans:
- If you are enrolled in an Associate's degree program, you may not receive more than a Sophomore loan amount, since it is a 2 year program.
- Eligibility for subsidized loans is determined by your financial need, which is figured when you fill out the FAFSA.
- If you do not demonstrate great financial need, you might only be eligible for an unsubsidized loan.
- Although an academic year is Fall, Spring and Summer semesters, aid is awarded for only the Fall and Spring semesters.
- If you plan on taking Summer classes, you must keep some of your loans from Fall and Spring to pay for Summer.
- If the parent of a dependent student is denied a PLUS loan, then that student can borrow up to an additional $4000 from the unsubsidized loan program during that academic year.The student must provide the bank issued letter of denial to Financial Aid along with a written request for the additional unsubsidized loan.
- Newly originated and disbursed Undergraduate Direct Subsidized loans are not eligible for an interest subsidy during the six-month grace period. All prior sub loans still carry this benefit.
- All Federal student loans, including PLUS loans will no longer have an upfront rebate incentive. There will still be a 1% origination fee on subsidized and unsubsidized student loans and a 4% origination fee for PLUS loans.
Stafford Loans from a lender or bank
As of July 1, 2010, Direct Loans are the only Stafford loans currently offered. However, some students may also have Federal Family Educational Loan Program (FFELP) Stafford loans from prior years. Students who have accepted student loans from a lender will continue to have those loans serviced by that lender as long as they hold the loan.
Some FFELP loans will be sold by the lender to the federal government. If so, they will be added to your Direct Loan balance and you will receive information from the government if information or payment is needed.