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Federal Loans

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 Interview and the Direct Loan Master Promissory Note.


Federal Direct Loan Interest Rates

Over a four-year period beginning July 1, 2008, the interest rate on subsidized Direct Loans made to undergraduate students will be reduced.

The applicable interest rates for loans made during this period are as follows:

Undergraduate Federal Direct Loan Interest Rates Disbursement Chart

First disbursement of a loan                                Interest rate on unpaid balance
Made on or after           And made before           Subsidized           Unsubsidized

July 1, 2009                    July 1, 2010                     5.6 percent            6.8 percent

July 1, 2010                    July 1, 2011                     4.5 percent             6.8 percent

July 1, 2011                    July 1, 2012                     3.4 percent             6.8 percent

July 1, 2012                                                                  6.8 percent             6.8 percent

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.

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