Federal Direct Subsidized Loan

The Federal Direct Subsidized Loan is a long-term loan with a fixed interest rate available to eligible undergraduate students based on information you provide on the Free Application for Federal Student Aid (FAFSA). The Department of Education is the lender. This loan does not accrue interest as long as you are enrolled at least half time; while students are enrolled the Department of Education pays the interest. There is an origination fee assessed. Federal student loan interest rates are tied to the ten-year Treasury note; this means that loan rates may vary from year to year. Once the loan has been disbursed, the loan rate will be fixed for the life of the given loan. More information regarding interest rates and origination fees.

First time borrowers of a Federal Direct Loan after July 1st, 2013, are subject to a new regulation that limits a first-time borrower's eligibility for the Federal Direct Subsidized Loan to not exceed 150 percent of the length of the borrower's educational program.

Federal Direct Subsidized Loans are available for undergraduate students who are enrolled at least half-time in degree seeking coursework and maintain Satisfactory Academic Progress (SAP). Six credits are considered half-time for undergraduate student. Non-degree seeking coursework will be considered if it is pre-requisite or preparatory coursework for a graduate program. Non-degree coursework will also be considered if it is a requirement for elementary or secondary teacher certification or recertification in the state where the student plans to teach. If you are enrolled in non-degree seeking coursework for graduate school, please contact Sandy Prudhomme at 701-231-7095 to discuss your eligibility.

Students who are in their final term of study should be aware that Federal Direct Subsidized Loans with a single semester loan period will be pro-rated based on their total number of enrolled credits for that semester.

More specific information regarding eligibility.

Yes. Repayment of both principal and interest will begin six months after graduation or if the student drops below half-time. Understanding the repayment process for your federal student loans can go a long way toward building a solid financial foundation. Remember, federal student loans are real loans, just like car loans or mortgages. You must repay a student loan even if your financial circumstances become difficult. Your student loan repayment cannot be canceled because you didn't get the education or job you expected, or because you didn't complete your education.

More detailed information on federal student loan repayment.

You will need to accept, decline or change your Federal Direct Subsidized Loan award on Campus Connection. If you are a new borrower of a Federal Direct Loan, you will need to sign a Master Promissory Note, complete Entrance Counseling and the Annual Student Loan Acknowledgment. You must sign the Master Promissory Note and complete the Entrance Counseling before your loan will be disbursed to your student account.

More detailed information about the Federal Direct Subsidized Loan program.

One Stop

Contact One Stop (701) 231-6200 Ask a Question Report a Problem