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Federal Direct Student Loans

Indiana Tech participates in the William D. Ford Federal Direct Student Loan program. Students who wish to use federal direct student loan funds must have a completed Free Application for Federal Student Aid (FAFSA) on file, maintain satisfactory academic progress, and be enrolled at least half-time.

To limit your loan debt, borrow only what you need and learn the rights and responsibilities of a student loan borrower.

Rights and Responsibilities

Students should understand the difference between subsidized and unsubsidized loans, as well as the responsibilities of accepting a federal direct student loan. If a loan offer is accepted, you are borrowing money from the U.S. Department of Education and therefore agree to repay it under the terms and condition of the loan. Loan information is reported to the National Student Loan Data System (NSLDS) and may be accessed by future schools, loan guarantee agencies and/or lenders. You are not obligated to accept any student loan offer and may decline your loans at any time.

Those accepting loans are encouraged to borrow responsibly and only borrow what they need.

Subsidized Loan

  • Subsidized loans do not accrue interest while you, the student, are enrolled at least half-time or during grace periods (grace periods are typically the six-month time period after the last date of attendance).
  • Financial need must be demonstrated on your FAFSA in order to qualify for a subsidized loan.

Unsubsidized Loan

  • Unsubsidized loans accrue interest while you are enrolled and during grace periods.
  • You may choose to pay interest costs as they accrue, or you may defer payment of interest costs and add them to the loan principle.
  • Financial need is not required to obtain an unsubsidized loan.


First time borrowers are required to complete both a Federal Direct Master Promissory Note (MPN) and Direct Loan Entrance Counseling before any loan funds may be posted to the student’s account. Borrowers who have previously taken out student loans and have completed an MPN through Federal Direct Loans within the last 10 years are not required to complete a new MPN. Both requirements may be completed online using the student’s U.S. Department of Education PIN.

Although this information is sent electronically to Indiana Tech, students should keep a copy of both documents for personal records.

Loan Limits

The amount of loan funds received will be limited by the student’s cost of attendance and aggregate loan limits. Please see below for a chart of loan limits based upon grade level for both dependent and independent students±.

Dependent Students

Grade LevelSubsidized Loan Eligibility**Unsubsidized Loan Eligibility***
Freshman (1-30 credits)$3,500$2,000*
Sophomore (31-60 credits)$4,500$2,000
Junior (61-90 credits)$5,500$2,000
Senior (91 or more credits)$5,500$2,000

Independent Students

Grade LevelSubsidized Loan Eligibility**Unsubsidized Loan Eligibility***
Freshman (1-30 credits)$3,500$6,000
Sophomore (31-60 credits)$4,500$6,000
Junior (61-90 credits)$5,500$7,000
Senior (91 or more credits)$5,500$7,000
Master’s, Ph.D.N/A$20,500
* In some cases, this amount may be increased if a parent applies for, and is denied, a Parent Plus Loan.
** Subsidized loans are based upon financial need, as determined by the Department of Education and the student’s FAFSA.
*** Unsubsidized loans are based upon the student’s cost of attendance, minus aid already awarded.

±Am I considered a dependent or independent?

Ask yourself these questions to determine whether you a considered a dependent or independent student:

  • Will you be age 24 by January 1 of the aid year?
  • Are you a veteran of the U.S. Armed Forces?
  • Are you currently serving on active duty in the U.S. Armed Forces for purposes other than training?
  • Are you a graduate, graduate/professional, or doctoral student?
  • Were you married prior to filing and signing the Free Application for Federal Student Aid (FAFSA)?
  • Are you an orphan, ward of the court, or in foster care age 13 or older?
  • Do you have legal dependents other than a spouse?
  • Are you an emancipated minor as determined by a court?
  • Are you in legal guardianship as determined by a court?
  • Were you any time on or after July 1, 2012 an unaccompanied youth who was homeless as determined by a high school guidance counselor, the director of an emergency shelter, or the director of a runaway or homeless youth basic center?

If you answered yes to any of the above questions, you are considered an independent student. 

Posting of Loan Funds

For students enrolled in the traditional undergraduate programs, funds are posted to student accounts shortly after their account is billed for the current semester’s classes.

For students in the College of Professional Studies and Ph.D. program, funds are posted to student accounts shortly after their account is billed for the current session’s classes. Billing happens during the third week of classes, and aid pays out over the next few weeks. At the time a class has been completed, 25% of the student’s semester loan funds are posted to the student’s account. If a student is enrolled in more than one 3-credit class in each session, loan funds are prorated accordingly.

Repaying Student Loans

Repayment of both subsidized and unsubsidized student loans begins six months after a student graduates, leaves school or drops below half-time enrollment in a degree-seeking program. Students entering repayment may access information on previous student loans, as well as an overall balance by visiting the National Student Loan Data System.

Students must also complete Federal Direct Loan exit counseling upon graduation or leaving school. Exit counseling stresses the importance of repaying student loans, but also gives repayment plan options and what you can do if payments cannot be made on time.

For more information on repayment plans, what to do if payments cannot be made on time, and other tips on how to handle student loan debt, please visit our financial literacy page.