Federal Direct Loan Program

Federal Direct loans are low-interest loans offered by the U.S. Department of Education to eligible students. There are two types of Federal Direct loans: a subsidized and an unsubsidized loan. For complete information about the Federal Direct Loan program, including current interest rates visit the Federal Student Aid website.  

Subsidized Loan

Eligibility for a subsidized loan is based on financial need determined by your cost of attendance and Estimated Family Contribution (EFC) and cannot exceed the federal annual loan limit. With this loan, the government will pay the interest while you are at least half-time status (6 credits), during your grace period*, and during any periods of deferment. 

*Note: If you received a subsidized loan that was first disbursed between July 1, 2012, and July 1, 2014, you are responsible for paying any interest that accrues during your grace period.  

Unsubsidized Loan

A FAFSA application is required to receive an unsubsidized loan, but eligibility is not based on financial need. The amount will be determined based on your cost of attendance, any other aid received, and the federal annual loan limits. With this loan, interest will start accruing as soon as it is disbursed. 

Before Disbursement

  • You must meet the eligibility requirements for financial aid.
  • You must not exceed federal aggregate loan limits.
  • Once you receive your Award Notification in your student email, go into your myMadisonCollege Student Center and accept or decline your awards.**
  • Complete Entrance Counseling at the Student Loans website to better understand your responsibilities and obligations by borrowing student loans.
  • Complete a Subsidized/Unsubsidized Master Promissory Note (MPN) at the Student Loans website. The MPN is a legal document in which you are promising to repay your loan(s) and any accrued interest and fees to the U.S. Department of Education.
  • View the Disbursement webpage for additional information on when you will receive your funds.  

**Awards usually include both the fall and spring semester for that aid year. When accepting your loans, be sure you are accepting enough for the entire aid year.

Questions? Visit askMadisonCollege to view frequently asked Financial Aid questions, submit a Financial Aid Category question, access the Financial Aid Tutorials for step-by-step instructions on related processes, or contact Madison College Financial Aid at (608) 246-6170.