Federal Direct Loan

This loan will be subsidized, unsubsidized, or a combination of both.

Subsidized Loans are low-interest loans that are awarded based on financial need. The federal government pays the interest that accrues while the student is in school at least half time.

Unsubsidized Loans are low interest loans that are not awarded based on need. Student is responsible for paying the interest on unsubsidized loans during all periods.¬† The interest accrues on the loan from the time the loan is disbursed until it’s paid in full.

Loan funds are disbursed directly to American Indian College in equal amounts for each term of the academic year.

Payments are deferred until six months after the student graduates, withdraws, or drops below half-time status.

In order for first-time borrowers to receive Direct Loan funds, students must complete the online Federal Direct Loan Entrance Counseling and the Direct Loan Master Promissory Note. Please visit studentloans.gov to complete.

Students and parents of students should be aware that, when entering into an agreement for a subsidized or un-subsidized student loan, the loan will be submitted to the National Student Loan Database (NSLDS), which is accessible by authorized agencies, lenders and institutions who may service the loan.

Federal Direct Loan Interest Rates

The interest rate varies depending on the loan type and (for most types of federal student loans) the first disbursement date of the loan. The table below provides interest rates for Direct Loans first disbursed on or after July 1, 2013.

Perkins Loans (regardless of the first disbursement date) have a fixed interest rate of 5%.

Interest Rates for Direct Loans First Disbursed on or After July 1, 2013
Loan Type Borrower Type Loans first disbursed on or after 7/1/13 and before 7/1/14 Loans first disbursed on or after 7/1/14 and before 7/1/15
Direct Subsidized Loans Undergraduate 3.86% 4.66%
Direct Unsubsidized Loans Undergraduate 3.86% 4.66%
Direct Unsubsidized Loans Graduate or Professional 5.41% 6.21%
Direct PLUS Loans Parents and Graduate or Professional Students 6.41% 7.21

These changes apply to subsidized Direct loans first disbursed on or after July 1 of each year through June 30 of the next year. This change does not affect any prior loans made to borrowers; the terms and interest rates of those loans remain the same. These reduced interest rates apply only to subsidized loans; any unsubsidized Direct Loan for the same undergraduate borrower would continue to be made at the current fixed interest rate of 6.8 percent.