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.
Unsubsidized Loans are low interest loans that are not awarded based on need. The interest accrues while students are in school and will be capitalized when the loan goes into repayment.
Loan funds are disbursed directly to American Indian Colllege 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.
See the Loan Repayment section for additional information on repayment options.
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
July 1, 2011 July 1, 2012 3.4 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.