Direct Lending & PLUS Loans

Saint Mary-of-the-Woods College participates fully in the William D. Ford Direct Loan Program. These low-interest loan programs are designed to provide students and parents with additional funds for college. This type of financial aid (federal loans) must be repaid.

Entrance Interview

An entrance interview must be completed before a loan can be set up.

Exit Interview

An exit interview must be completed upon graduation or withdrawal.

Quick Links

Loan details and eligibility

Borrowing limits and interest

Receiving loan money / repayment

Subsidized Loans

Federal subsidized loans are based on financial need. The Federal government pays the interest during in-school, grace, and deferment periods. Need for subsidized Stafford loans is determined by the Expected Family Contribution (EFC) as determined by the FAFSA data.

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Unsubsidized Loans

Federal Unsubsidized Loans are not based on financial need. The federal government does NOT pay the interest for Federal Unsubsidized Loans. Students may choose to defer interest payments until repayment begins; however, the student is responsible for all interest that has accrued. The accrued interest automatically capitalizes to the loan principal.

Federal PLUS Loans are not based on financial need. The federal government does not pay the interest on the Federal PLUS loans. Parents begin repaying the loan, principal and interest, 60 days after the final loan disbursement is made. Interest on the PLUS loans begins to accumulate at the time the first disbursement is made.

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Direct Lending Loan Eligibility

The following factors affect Federal (Direct Lending) Loan eligibility:

* Gradute students with provisional admission status may receive loans for one 12 month period before being granted full admission.

Non-degree seeking and special students are ineligible for the Federal Loan Program.

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PLUS Loan Eligibility

A parent may borrow on behalf of a dependent undergraduate student who is enrolled full-time or half-time. The parent borrower will be required to pass a credit check. The PLUS Loan program is limited to U.S. citizens and permanent residents. The student must be enrolled in a degree-granting program.

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Yearly Borrowing Limits

Note: the amounts listed are the maximum yearly limits, however a student may not borrow more than the cost of education minus any other financial aid received.  Like all credit, student loans should be used responsibily; failure to repay loans will have a negative impact on your credit score.

Graduate Students - may borrow up to the total cost of school or a maximum of $20,500 each academic year (of which all will be in unsubsidized loans).

Dependent Undergraduate Students

  • $5,500 - Freshman year*
  • $6,500 - Sophmore year*
  • $7,500 - Junior, Senior, and 5th year undergraduate*
* of which at least $2,000 will be an unsubsidized loan

Independent Undergraduate Students (or dependent undergraduate students whose parent is unable to borrow a PLUS Loan)

* of which at least $6,000 will be an unsubsidized loan

** of which at least $7,000 will be an unsubsidized loan.

Parents (PLUS Loans) - The yearly limit on a PLUS Loan is the student's cost of attendance minus any other financial aid received. For example, if the student's cost of attendance is $12,000 and the student is receiving financial aid in the amount of $7,000, the parent could borrow up to $5,000 to apply towards the students education.

Students seeking a second bachelor's degree - Students in a second bachelor's degree program may borrow at undergraduate maximum loan limits (shown above).

* Enrolled in a program of study that is at least a full academic year. For periods of undergraduate study less than a full academic year, the loan amount a student may borrow will be less than the amounts listed above.

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Cumulative Borrowing Caps

The total cumulative subsidized Stafford and unsubsidized loans amounts are:

  • $31,000 as a dependent undergraduate student.
  • $57,500 as a independent undergraduate student (with a maximum of $23,000 in subsidized Stafford loans)
  • $138,500 as a graduate or professional student. Note: graduate debt limit includes outstanding loans from undergraduate programs.

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Interest Rates

Direct Loans - Direct Subsidized Loans for undergraduates with a first disbursement date between July 1, 2012, and July 1, 2013: 3.4%. Direct Unsubsidized Loans for all students: 6.8%.

PLUS Loans - The interest rate for PLUS direct loans is 7.9%.

Please visit for more information on educational loan interest rates.

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Fees and Charges for Federal Loans

The Federal loan program deducts a default fee from each disbursement of 1% for all loans. This fee goes to the Federal government to help offset the cost of these loans.

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Loan Disbursal

Federal loans are disbursed at the beginning of each term for Campus students. Campus students attending only one semester per academic year will have their loans disbursed in one disbursement.

WOL students will have one disbursement on the 40th day of enrollment.

Graduate students will have one disbursement on the 30th day of enrollment.

Before loans can be disbursed, first-time borrowers to the Direct Lending program are required to complete the online Entrance Interview. Complete this interview by going to the "Loan Program" tab on the SMWC Financial Aid website. Additionally, students (and parents) should complete their Master Promissory Note (MPN) by visiting must complete both the Entrance Interview and the MPN before the loan funds can be processed and disbursed.


Refunds / Loan disbursed to the student - Any overage amount (funds exceeding the cost of attendance) will be credited to the students account. This credit will be refunded to the student within 7 - 10 days after the credit balance was created.  The refund will be sent via check to the address on file with the Registrar's office.  Students must contact the Business Office in writing if they want to pick up thier refund check instead of mailing. 

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Repayment Options/Plans and Consolidation

For more information regarding the several options for repayment plans and loan consolidation please visit


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Payment Deferment

Payments may be deferred if the borrower enteres into a deferrable situation and request deferment of payment by submitting appropriate documentation to the loan servicer.

Deferrable situations include, but are not limited to:

  • Active duty in the U.S. armed forces*
  • Study in an approved graduate fellowship program or in an approved rehabilitation training program for the disabled.
  • Unable to find full-time employment (only on pre-July 1, 1993 loans)
  • Economic hardship**
  • Pursuing half-time study at postsecondary school

*Contact lender for specific information.
** Many Peace Corps volunteers will qualify for deferment based upon economic hardship. 

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