Federal Direct and Other Government Loans

Federal Direct Loans are the most common loan fund source. The federal government makes these loans. Federal Direct Loans have a fixed interest rate and offer several repayment plans. To receive federal Direct Loans, students must be:

Have a completed and valid Free Application for Federal Student Aid (FAFSA) for the current aid year on file with Salem State University
Be a matriculated student (enrolled in a degree-seeking program)
Enrolled at least half-time (six credits or more)
Meeting Satisfactory Academic Progress (SAP)

Students at Salem State University are offered student loans as part of their financial aid package. Before a student accepts any loan, it's important to remember that a loan is a legal obligation; they are responsible for repaying the money they borrowed with interest.

We recommend that students and their families only borrow what they need. Students are not required to accept a student loan and can accept a lower amount than what they were offered as part of their financial aid package.

If it is a student's first time receiving a Federal Direct loan, they are required to:

complete entrance counseling, a tool to ensure you understand your obligation to repay the loan and
sign a loan contract called a Master Promissory Note, agreeing to the loan terms.

Once a student receives a Direct Loan, their loan servicer contacts them. Students repay their loans to the servicer, who provides regular updates on the status of their Direct Loan and any additional Direct Loans they receive.

After a student graduates, leaves school or drops below half-time enrollment, they will have a six-month grace period before they are required to begin repayment. During this period, they will receive repayment information from their loan servicer and be notified about their first payment due date. Payments are usually due monthly. For more information on loan repayment, please visit www.studentaid.gov.

Types of Federal Direct Loans

Direct Subsidized Loans

Direct Subsidized Loans are available to undergraduate students who demonstrate financial need. The U.S. Department of Education pays the interest on Direct Subsidized Loans while a student is enrolled in school in at least half-time credits, during a six-month grace period after a student leaves school, and during a period of deferment (a postponement of loan payments.)

Direct Unsubsidized Loans

Direct Unsubsidized Loans are available to undergraduate and graduate students. This loan is not need-based. Students are responsible for their interest during all periods. Students may arrange with their loan servicer to pay the interest while enrolled in school. If a student chooses not to pay the interest while in school and during grace periods and deferment or forbearance periods, the interest will accrue and be capitalized.
- Capitalization means interest will be added to the loan's principal at the beginning of the repayment period. For more information, please visit studentaid.gov.

How Much Can I Borrow?

Direct Loan amounts are offered based on a student's grade level and dependency status. Limits are placed on the amount a student may be eligible to receive in subsidized and unsubsidized loan funds each academic year (annual loan limits) and the total amount a student may borrow for their undergraduate and graduate studies (aggregate loan limits).

Annual and Aggregate Loan Limits for Subsidized and Unsubsidized Loans

Year In School	Dependent Students (Except for students whose parents are unable to obtain PLUS Loans)	*Independent Students (And dependent undergraduate students whose parents are unable to obtain PLUS Loans)**
First Year/Freshman Undergraduate Annual Loan Limit (0-23 credits completed)	$5,500 Total (No more than $3,500 may be in subsidized loans.)	$9,500 Total (No more than $3,500 may be in subsidized loans.)
Second Year/Sophomore Undergraduate Annual Loan Limit (24-53 credits completed)	$6,500 Total (No more than $4,500 may be in subsidized loans.)	$10,500 Total (No more than $4,500 may be in subsidized loans.)
Third-Year/Junior Undergraduate Annual Loan Limit (54-90 credits completed)	$7,500 Total (No more than $5,500 may be in subsidized loans.)	$12,500 Total (No more than $5,500 may be in subsidized loans.)
Fourth Year/Senior & Beyond Undergraduate Annual Loan Limit (90 or more credits completed)	$7,500 Total (No more than $5,500 may be in subsidized loans)	$12,500 Total (No more than $5,500 may be in subsidized loans)
Graduate or Professional Students Annual Loan Limit	Not Applicable (All graduate and professional degree students are considered independent).	$20,500 Total (Unsubsidized loans only)
Subsidized and Unsubsidized Aggregate Loan Limit Totals	$ 31,000 - No more than $23,000 may be in subsidized loans.	Undergraduates: $57,500 - No more than $23,000 may be in subsidized loans. Graduate or Professional Students - $138,500 - No more than $65,500 may be in subsidized loans. The graduate aggregate limit includes all federal loans received for undergraduate study.

*Dependent students whose parents are denied a Direct PLUS loan and do not wish to obtain an endorser or appeal the credit decision may qualify to receive additional Direct Unsubsidized Loan funds:

First and second-year students can receive up to an additional $4,000.
Third-year students and above can receive up to $5,000 in Direct Unsubsidized Loan funds.
The student will automatically be awarded these funds after Salem State receives the PLUS loan denial.

Other Federal Loans

Federal Direct Parent PLUS Loans

Federal Direct PLUS Loans are federal loans that parents of dependent undergraduate students can use to help pay for education expenses not covered by other financial aid. Once your student has filled out a FAFSA, parents can apply for a Federal Direct PLUS loan at studentaid.gov.

Parent PLUS loans are federal loans that parents of dependent undergraduate students can take out to help pay for education expenses not covered by other financial aid. Once Salem State has received your student's FAFSA, parents can apply for a Federal Direct Parent PLUS loan at studentaid.gov.
For Federal Direct PLUS Loan purposes, a parent is considered your biological or adoptive mother or father, but not a legal guardian.
Find more information on Federal Direct Parent PLUS Loans at Salem State on our Federal Direct Parent PLUS Loans page.
Federal PLUS loans are also available to graduate or professional students. You can find more information on Federal Graduate PLUS Loans at studentaid.gov

Federal Nursing Student Loan

Nursing Student Loans is a need-based loan available to undergraduate students pursuing a degree in nursing through the School of Nursing at Salem State University.

The Health Resources and Services Administration (HRSA) funds the Nursing Student Loan program. The interest rate is 5% fixed for the life of the loan. No interest is charged while the student is in school. Students have a nine-month grace period after they leave school and up to ten years to repay their loans.

Funds are limited and offered on a first-come, first-served basis based on available funding levels at the university.

To be eligible for the Nursing Student Loan, students must:

Have a completed and valid Free Application for Federal Student Aid (FAFSA) for the current aid year on file with Salem State University.
Demonstrate financial need on the FAFSA.
Be enrolled in at least half-time (six credit hours)
Complete a separate Master Promissory Note and all other Nursing Student Loan documents.

Federal Perkins Loan

The Federal Perkins Loan Program provided money for college or career school for students with financial need. The authority for schools to make new Federal Perkins Loans ended on Sept. 30, 2017.

For more information on Perkins Loan Repayment, please visit the Loan Repayment page.

State Loans

Massachusetts No Interest Loan (NIL)

The Massachusetts No Interest Loan (NIL) program was created to provide needy Massachusetts residents attending post-secondary educational institutions in Massachusetts with a state-funded loan.

The NIL program offers zero-interest loans to assist students in meeting educational costs. Students have a period of ten years to repay their NIL loans. The minimum initial amount a student can receive is $1,000, with a maximum award amount of $4,000 per academic year. NIL award amounts are determined according to financial need. A NIL-eligible student has a lifetime borrowing limit of $20,000.

Funds are limited and offered on a first-come, first-served basis based on available funding levels at the university.

To be eligible for a Massachusetts No Interest Loan, a student must:

Be a permanent legal resident of Massachusetts for one year before the start of the academic year for which the loan is awarded.
Be a U.S. Citizen or non-citizen eligible under Title IV regulations.
Have applied for financial aid using the standard Free Application for Federal Student Aid (FAFSA).
Not be in default of any federal or state Student Loans for attendance at any institution or owe a refund for any previous financial aid received.
Be enrolled full-time (at least twelve credits or more) in a bachelor's degree program.
Not have received a prior bachelor's degree or its equivalent.
Maintain satisfactory academic progress following institutional and federal standards.
Demonstrate financial aid need as determined by their FAFSA.

Students must complete a Master Promissory Note and Entrance Counseling before receiving funds from their NIL. According to Massachusetts state law, students must also complete Exit Counseling when they graduate or leave school.

For more information on the Massachusetts No Interest Loan, please visit mass.edu.

Dependency Status

The information students enter on their FAFSA determines their dependency status. The Federal government has specific guidelines for determining whether a student is considered dependent or independent for financial aid purposes.

Please note that not living with parents, not being claimed on parents' tax forms, or parents' refusal to help pay for college does not make a student an independent student for purposes of applying for federal financial aid. If your parents are unwilling to provide their information on the FAFSA, please visit studentaid.gov for more information.

In certain situations, a student can submit their FAFSA without their parents' information if they have no contact with their parents for the unique circumstances:

A student's parents are incarcerated
A student left home due to an abusive family environment
A student does not know where their parents are and is unable to contact them (and a student has not been adopted).
A student is older than 21 but not yet 24, is unaccompanied, and is either homeless or self-supporting and at risk of being homeless.

When filling out the FAFSA, students will be asked whether they can provide information about their parents. If they cannot, they can indicate a unique circumstance that prevents them from doing so. Please be advised that students filing their FAFSA this way will be rejected and not loaded into Salem State's financial aid system.

Students who meet the above requirements may be eligible for a dependency override. They must submit several documents to document their situation. Please note that we do not grant dependency overrides based on financial independence.

A student living financially independent from their parents by choice, circumstances, employment, or geography does not constitute independence per Federal guidelines.