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)

Types of Federal Direct Loans

Direct Subsidized Loans

Available to undergraduate students who demonstrate financial need or need-based aid
The U.S. Department of Education pays the interest on subsidized loans while a student is enrolled at least half-time, during the six-month grace period after a student leaves school, and during an authorized deferment period (a postponement of loan payments).
Students not eligible for their total subsidized loan will be awarded unsubsidized loan up to their annual loan limit.

Direct Unsubsidized Loans

Available to undergraduate and graduate students regardless of need.
Students are responsible for the interest that accrues during all periods.
- Students can arrange with their loan servicer to pay the interest while enrolled in school. However, the interest will be capitalized if a student chooses not to pay it during grace periods and deferment or forbearance periods.
  - 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). de level)

Undergraduate and Graduate Annual Loan Limits

Year	Dependent Students (Combined Subsidized and Unsubsidized)	Independent Students * (Combined Subsidized and Unsubsidized)
First Year /Freshman (0-23 credits completed)	$5,500 (No more than $3,500 may be subsidized)	$9,500 (No more than $3,500 may be subsidized)
Second Year / Sophomore (24-53 credits completed)	$6,500 (No more than $4,500 may be subsidized)	$10,500 (No more than $4,500 may be subsidized)
Third Year / Junior (54-90 credits completed)	$7,500 (No more than $5,500 may be subsidized)	$12,500 (No more than $5,500 may be subsidized)
Fourth Year / Senior & Beyond (90 or more credits completed)	$7,500 (No more than $5,500 may be subsidized)	$12,500 (No more than $5,500 may be subsidized)
Graduate or Professional Students		$20,500 (Unsubsidized loans only)

*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.

Independent undergraduate students are eligible for additional unsubsidized amounts depending on their grade level:

Year	Additional Unsubsidized Amount
Independent Freshman and Sophomores	Up to $4,000
Independent Juniors and Seniors	Up to $5,000

Dependency Status

A student’s dependency status determined by the information a student enters on their FAFSA. The Federal government has specific guidelines to determine whether a student is considered dependent or independent for financial aid purposes. “Am I Dependent or Independent?” worksheet can help students determine their dependency status when filling out the FAFSA form.

Please note 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 you 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 special 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, are unaccompanied, and are either homeless or self-supporting and at risk of being homeless

When filling out the FAFSA a student will be asked whether or not they are able to provide information about their parents. If they are not, they will have the option to indicate they have a special circumstance that make them unable to get their parents information. Please be advised students filing out their FAFSA this way will be rejected and will not load into the Salem State’s financial aid system.

A student may be eligible for a dependency override if they meet any of the above requirements. Students will be required to submit several items to document their situation. Please contact the Student Navigation Center for details. Please note we do not grant dependency overrides based on “financial independence”. A student who is living financially independent from their parents by choice, circumstances, student’s employment, or geography does not constitute independency per Federal guidelines.

Federal Direct Parent Loan for Undergraduate Students and Graduate Students (PLUS)

Federal Direct Parent Loan for Undergraduates (PLUS) is a fixed 7.9 percent interest rate loan taken out by the parent on behalf of a dependent student. It is based on creditworthiness. Families may borrow up to the cost of education minus other aid. Payment begins immediately.** If a dependent student's parent is denied based on creditworthiness, the student may borrow additional amounts under the Unsubsidized Direct Loan program. The Parent Plus Loan MUST be applied for online.

Apply for a direct Parent PLUS Loan.

Federal Perkins Loan

The Federal Perkins Loan Program provides low-interest loans (fixed at 5 percent) to help needy students finance the costs of post-secondary education. Funding of the Perkins Loan program is limited at Salem State University. Eligibility is determined by the financial aid office and funding is limited.

Federal Nursing Loan

The Federal Nursing Student Loan is a low-interest (fixed at 5 percent) federal loan. It is for both undergraduate and graduate students admitted to the College of Health and Human Services and who are enrolled at least half time. Funding of the Federal Nursing Loan program is limited at Salem State University. Eligibility is determined by the financial aid office and funding is limited.

Loan	Promissory Note Requirement	Delivery and Process Method
Direct Loans	Your first loan at Salem State	Online - Link will be in your to-do list
Perkins	Each year the award is offered	Online - Link will be in your to-do list (additional documentation MAY be required to be signed in office)
Federal Nursing	Each year the award is offered	Paper form, must be completed at The Navigation Center

*Incomplete promissory notes Failure to do so results in loan cancellation. If funds are awarded after the start of school, come to Financial Aid to sign notes and for entrance loan counseling. For incoming students, loan counseling is also done at Orientation.

Learn more about Mass No Interest Loan Exit Counseling

Please note that if you receive a revised award during the year, a promissory note must be signed for any additional funds awarded. When you terminate your studies at Salem State, you must have an exit interview. Your loan obligations and repayment conditions are explained again at that time.