Direct Loan Requirements
To apply for any Federal Direct Loans at UNC Asheville, you must first complete the Free Application for Federal Student Aid (FAFSA). Based on the information provided by the FAFSA, the Office of Financial Aid will award you the loans for which you qualify.
Complete the entrance counseling required for all first-time borrowers.
Master Promissory Notes (MPN)
Master Promissory Notes must be signed if you are a first-time borrower or have not previously signed a Master Promissory Note with Direct Loan. You may sign your Direct Loan MPN here.
Loan Interest Rates
On May 12, 2020, the Treasury Department held a 10-year Treasury note auction that resulted in a high yield of 0.700%. The information below shows the interest rates for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed on or after July 1, 2020 and before July 1, 2021.
The Direct Loan interest rates for 2020-2021 are fixed as follows:
- Direct Subsidized Loans and Direct Unsubsidized Loans for undergraduate students – 2.75%
- Direct Unsubsidized Loans for graduate and professional students – 4.30%
- Direct PLUS Loans for parents of dependent undergraduate students and for graduate or professional students – 5.30%
Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed on or after July 1, 2013 have fixed interest rates that are determined in accordance with formulas specified in sections 455(b)(8)(A) through (C) of the Higher Education Act of 1965, as amended (HEA).
The interest rate is determined annually for all loans first disbursed during any 12-month period beginning on July 1 and ending on June 30, and is equal to the high yield of the 10-year Treasury notes auctioned at the final auction held before June 1of that 12-month period, plus a statutory add-on percentage that varies depending on the loan type and, for Direct Unsubsidized Loans, whether the loan was made to an undergraduate or graduate student. Loans first disbursed during different 12-month periods may have different interest rates, but the rate determined for any loan is a fixed interest rate for the life of the loan.
For each loan type, the calculated interest rate may not exceed a maximum rate specified in the HEA. The maximum interest rates are 8.25% for Direct Subsidized Loans and Direct Unsubsidized Loans made to undergraduate students, 9.50% for Direct Unsubsidized Loans made to graduate and professional students, and 10.50% for Direct PLUS Loans made to parents of dependent undergraduate students or to graduate or professional students.
Federal Direct Loans
Subsidized loans are awarded on the basis of financial need as determined by the FAFSA. Students must be enrolled in at least six credit hours to be eligible. The federal government pays the borrower’s accrued interest while the student is enrolled at least half-time, thereby “subsidizing” these loans until their enrollment drops below half-time. Repayment will be begin six months after the student is no longer registered at least six hours.
Students must file a FAFSA and be enrolled in at least six credit hours. The borrower is responsible for accrued interest throughout the life of the loan. Repayment will be begin six months after the student is no longer registered at least six hours.
- Forms: FAFSA
- Priority Deadline: At least 6-8 weeks before start of term(s) for which needed
- Who Awards the Funds: Office of Admission & Financial Aid
- Annual Maximum Amount: Varies dependent upon need and grade level
- Need-based and Requires FAFSA: Yes (subsidized), No (unsubsidized)
- Additional Award Criteria: Maintain satisfactory progress
- Minimum Credit Hours For Disbursement per Term: 6 undergraduate (5 graduate)
- Renewal Criteria: Complete the FAFSA each year
Loan Limits – Dependent Undergraduates
Freshmen (0-29 credit hours): $5,500
Sophomore (30-59 credit hours): $6,500
Junior (60-89 credit hours): $7,500
Senior (90+ credit hours): $7,500
The maximum total debt from Direct Loans that a dependent undergraduate may borrow is $31,000 (no more than $23,000 of which can be subsidized).
Loan Limits – Independent Undergraduates
(Also for dependent undergraduates whose parents are denied a Direct PLUS Loan.)
Freshmen (0-29 credit hours): $9,500 (No more than $3,500 of this amount may be subsidized)
Sophomore (30-59 credit hours): $10,500 (No more than $4,500 of this amount may be subsidized)
Junior (60-89 credit hours): $12,500 (No more than $5,500 of this amount may be subsidized)
Senior (90+ credit hours): $12,500 (No more than $5,500 of this amount may be subsidized)
The maximum total debt from Direct Loans that an independent undergraduate may borrow is $57,500 (No more than $23,000 of of which can be subsidized).
Federal Direct Parent PLUS Loan
Available to parents of degree-seeking undergraduate dependent students who are enrolled in at least six credit hours. You must have a FAFSA on file to be eligible to apply for a PLUS Loan.
- Forms: FAFSA, Federal Parent PLUS Loan application
- Priority Deadline: July 1 for Fall, December 1 for Spring
- Who Awards the Funds: UNC Asheville office of Financial Aid after credit is pre-approved by the U.S. Department of Education.
- Annual Maximum Amount: Cost of attendance less financial aid and other resources.
- Need Based and Requires FAFSA: No
- Additional Award Criteria: Maintain Satisfactory progress & Credit worthiness
- Minimum Credit Hours For Disbursement per Term: 6 undergraduate
- Renewal Criteria: Complete the FAFSA and PLUS application each year and have credit pre-approved.
Forgivable Education Loan for Service
The Forgivable Education Loan for Service was established by the North Carolina General Assembly in 2011 and the first loans available for the 2012-13 academic year. The loan provides financial assistance to qualified students who are committed to working in North Carolina in fields designated as critical employment shortage areas.
A recipient must meet the following eligibility criteria:
- Be a legal North Carolina resident and NC resident for tuition purposes
- At the time of application, present a minimum grade point average (GPA) of:
- 3.00 for graduating high school students (weighted GPA)
- 2.80 for undergraduate students pursuing an associate or bachelor’s degree
- 3.20 for students pursuing a graduate or professional degree
- Register with the Selective Service System, if required;
- Recipients must not be in default, or does not owe a refund, under any federal or State loan or grant program
- Maintain Satisfactory Academic Progress according to the enrolling policy of the institution
- Be willing to work in North Carolina in a designated critical employment area
Annual Loan Amounts
- Certificate or associate degree programs: $3,000
- Bachelor’s degree program: freshmen and sophomores $3,000
- Bachelor’s degree program: junior and senior: $7,000
- Master’s degree program: $10,000
- Doctoral degree program: $14,000
Maximum Aggregate Loan Limits
- Certificate and/or associate degree programs: $6,000
- Bachelor’s degree program: $20,000
- Master’s degree program: $20,000
- Doctoral degree program: $56,000
The application is available here. For further information regarding the application process or this forgivable loan, please contact CFNC at 866.866.2362.
FELS loan recipients must sign a promissory note that will require them to seek loan forgiveness through employment in an approved position or repay the loan in cash. Loan forgiveness is described in the FELS rules. Generally, a loan for one academic year will be forgiven for one year of full-time employment. Loans will accrue interest at the rate of 8% per year from the date of the loan disbursement.
Private Education Loans
Alternative Education Loans may be necessary for students who do not qualify for Federal Direct Loans or need additional funds to cover their cost of attendance. These loans are private loans offered by individual lenders that require the borrower to have good credit or to obtain a co-signer with good credit. Be advised that the interest rates are variable from lender to lender and are higher than those of Federal Direct Loans.
The Office of Financial Aid cannot certify any Alternative Education Loans until the student is enrolled in classes. In addition, the Office of Financial Aid will not certify any amount that takes the student over their cost of attendance.
If you are seeking a resource to locate a private education loan, ElmSelect can provide comparisons.
Private Education Loan Self-Certification Form
The Higher Education Opportunity Act (HEOA) added a section to the Truth In Lending Act to require that before a private educational lender may consummate a private education loan for a student in attendance at an institution of higher education, the private education lender must obtain the completed and signed Self-Certification Form from the applicant.
Federal Loan Repayment
All students receive exit counseling when they graduate or attend school less than half-time. The exit counseling provides information on your loans and when repayment begins.
When you graduate or withdraw you will have six months before your first payment is due. This is called a grace period. PLUS Loans do not have a grace period. This time allows you to get financially settled, select your repayment plan and determine the amount of income you need to put toward your student loan each month.
There are flexible repayment options to help students manage this important financial responsibility. Contact your loan provider to discuss specific options.
Who is/are my lender(s)?
The National Student Loan Data System (NSLDS) is the U.S. Department of Education’s central database for student aid. NSLDS receives data from schools, guaranty agencies, the Direct/FFELP Loan program, and other Department of Education programs. Also login to www.myedaccount.com.
NSLDS Student Access provides a centralized, integrated view of all loans and grants so that students can access and inquire about their loans and/or grant data.
Loan Repayment Calculators
A deferment is a period in which repayment of the principal balance is postponed. During a deferment, if the loan is subsidized, the government pays the interest charged. For unsubsidized, PLUS, unsubsidized consolidation, and PLUS consolidation loans in deferment, you are responsible for the interest that accrues during the deferment period. If you have unsubsidized loans, when you re-enter repayment at the end of the deferment period, any unpaid interest capitalizes (is added to the principal balance).
For complete information on deferment of your loan, contact your lender(s). If you are not eligible for a deferment you may still be eligible for a forbearance.
A forbearance is an arrangement to postpone or reduce your monthly payment amount for a limited and specific period during which you are charged interest. If you indicate a temporary inability, but willingness to pay the loan(s), you may ask for or be offered a forbearance. Interest that accrues during a forbearance is the responsibility of the borrower. When you re-enter repayment at the end of the forbearance period, any unpaid interest capitalizes (is added to the principal balance).
For complete information on the forbearance of your loan, contact your lender(s). If you are not eligible for a forbearance you may still be eligible for a deferment.
More Information on Repaying Federal Student Loans
Student Aid online has more information on repaying your student loans. We are also more than happy to discuss your options here in the office. Feel free to contact us.
Due to their graduate status, Master of Liberal Arts and Sciences (MLAS) students may only borrow up to the annual limit of $20,500 in the Federal Direct Unsubsidized student loan program for a single academic year. The maximum total debt from Direct Loans that an MLAS student may borrow is $138,500.
Federal regulations state that a student must be AT LEAST half time to be eligible for Federal Direct Loans. At UNC Asheville, a full time graduate schedule is at least 9 credit hours. Therefore, half of the 9 credit hour full-time course load would be rounded to 5 credit hours.