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Financial Aid

Stafford/Federal Direct Loans

What is a Direct Loan?

Federal Direct Loans are low-interest loans made to students attending school on at least a half-time basis, (i.e., 6.0 credits or more per semester). A student may be eligible for a Federal subsidized Direct Loan and/or a Federal unsubsidized Direct Loan. The "subsidized" loan is need-based and the government pays the interest on the loan while the student is in school or in deferment. The "unsubsidized" loan is non-need based and the student is responsible for the interest while in school and during deferment and grace periods.

What is the first step to the application procedure for a Direct Loan?

To be considered for this type of aid, a student must complete the Free Application for Federal Student Aid (FAFSA). A student's eligibility for other Federal aid (i.e. Pell Grant) must be determined before a loan can be processed.

What is the interest rate of a Direct Loan?

Variable interest rates are set each June by the U.S. Department of Education. Since UMFK is a Direct Lending school, your Direct Loan will be processed through the Department of Education.

2017-2018 Direct Loan Interest Rates

  • New Subsidized Loans: 4.45%
  • New Unubsidized Loans: 4.45%

Rates courtesy the U.S. Department of Education

Current Direct Loan interest rates are available in the box above or from the Department of Education website. For interest rates on loans you may have taken out previously, you may:

Other than interest, is there a charge to get a Direct Loan?

You'll pay a fee of up to 4 percent of the loan, deducted proportionately from each loan disbursement. (Part of the fee is for insurance used to pay off loan defaults; the rest reduces the cost of the loan to the government.)Because of this deduction for fees, you may receive slightly less than the amount you're borrowing.

How will I be notified of my eligibility?

A student is usually notified of his/her Direct Loan eligibility through the institution's Award Notice. The initial Award Notice is mailed to first-time UMFK students. Continuing UMFK students, once awarded, will receive an email to view their Award Notice on MaineStreet.

Award Notices are subject to change. Any changes to the initial Award Notice will be posted on MaineStreet. Students will be notified by email to log into MaineStreet to view changes to their Award Notice. Since changes to a student's Award Notice can have a direct effect on a student's bill, we recommend viewing/printing your Award Notice and bill periodically so you will be aware of possible changes.

For MaineStreet assistance, please view our page on using MaineStreet.

How much can I borrow?

The student's borrowing limit will be determined by the school within the federal limits. Direct Loan borrowing limits vary depending on if the student is a dependent or independent undergraduate, as well as the student's class/grade level. For more information, click here to view Direct Loan Limits. A student cannot borrow more than the cost of education, and lifetime aggregates also apply.

How can I determine the loan amount I am eligible to borrow?

This information will be available on MaineStreet (under Student Self Service > Student Center > Finances > Accept/Decline Awards). On MaineStreet a student can view their Financial Aid Award Notice by academic year or by semester. When applying for a loan, you are applying for loan money to cover the Academic year, (i.e., two semesters), unless you are only planning to attend one semester. The borrower may accept a smaller Direct Loan amount than the maximum eligibility amount that has been offered to the student by the school on the Award Notice. It is recommended that a student borrow only what is needed.

How do I determine how much loan money I need?

The award notice informs the student of how much funding (i.e., financial aid) that the school anticipates will be available (at the time of review) to help the student pay for school costs.

To determine how much funds will be needed, one also needs to know the cost of attendance. UMFK's (estimated) "cost" figures may be found here. To help determine how much Direct Loan funds will (or will not) be needed and to determine if the student has sufficient aid to pay for school, the following worksheets are available:

If additional funding is necessary to help cover school costs that go above what the award notice offers, you may want to consider a Parent Plus loan (for the parents of a dependent student) and/or an Alternative loan. These are private loans based on credit.

How do I request Direct Loan funds and what are the application requirements?

In order to receive a loan, there are 3 (three) things you need to do. You may view the complete application process here.

  1. Accept all (or a reduced amount) of the Direct Loan offered to you on your Award Notice in MaineStreet. Loans can also be accepted on the paper Award Notice by completing the loan question and returning your Award Notice to UMFK. All or part of your Direct Loan must be accepted by you before UMFK can process your loan request.
  2. If this is your first-time borrowing a Direct Loan at UMFK, complete the Entrance Counseling session online to learn about the loan and your rights and responsibilities as a loan borrower.
  3. If this is your first Direct Loan you will need to complete a Direct Loan Master Promissory Note (MPN).

Loan details and the loan application process are available hereAll 3 step requirements must be completed before this office can proceed with your loan application.

How and when do I get my Direct Loan money?

Loan funds are not disbursed until the semester begins.

Direct Loan funds are usually credited to a student's University account in two equal disbursements, half of the total amount each semester. Funds are credited to the student's account only when:

  • The student's financial aid file is complete
  • The student has accepted his/her Direct Loan amount online on MaineStreet or on paper and the school has been informed
  • The Direct Loan Entrance Counseling session is complete
  • The required Master Promissory Note is complete
  • The Direct Loan funds are received from the Department of Education
  • student is registered for 6.0 credits or more
  • The semester has begun
  • The student remains eligible for the loan

Once the loan is applied to a student's account, the student will receive a refund for any semester amount which exceeds indebtedness to the University.

About Availability of Refunds: Refunds will be issued according to the Business Office check writing schedule. This process takes 4-7 additional days from the time the loan money is applied to a student's account to the time the student's refund becomes available. The schedule varies depending on the actual day funds are received on your account at the Business Office. For more information contact the Business Office.

How will I know if my loan funds have been applied to my student account/bill?

To check if your Direct Loan funds have been received and applied to your UMFK student billing account: 

  • Visit my.umfk.edu
  • Login using your email username and password
  • Click on the MaineStreet icon (located on the left-hand side of the portal homepage)
  • Click on Student Self Service
  • Click on Student Center
  • Go to the Finances section of the Student Center

Note: Need help to navigate in MaineStreet? Click on the "User Guides & Demos" available in MaineStreet.

If "Subsidized Loan" and/or "Unsubsidized Loan" is listed as a "Payment" on your bill in MaineStreet, then the amount posted has been received and deducted from your bill. Review the amounts for accuracy. If your UMFK bill is paid in full and any balance remains, that balance will be refunded to you. Contact the UMFK Business Office at (207) 834-7552 if you have questions.

What you need to know about paying back your Direct Loan?

Direct Loans require repayment. After a student graduates, leaves school or drops below half-time (i.e., less than 6.0 credits), a student has a six month grace period before repayment begins. More information on paying back your Direct Loans may be found on our Repaying Your Loans page. Additional links and information may also be found under Additional Direct Loan Resources.

What are my borrower responsibilities after I graduate, withdraw or drop below half-time?

A student is required to:

  • Keep in touch with their lender(s) of address and telephone changes.
  • Direct and/or Perkins Loan borrowers who have withdrawn from school, leave school, dropped to less than 6 credits hours or graduate are required to complete the appropriate Exit Counseling session(s). Students who have not met these requirements will have appropriate Direct (and Perkins) Loan "Hold(s)" placed on his/her UMFK account until these obligation(s) have been met.

Note: A "Hold" on a student's account (i.e., school records) will prevent a student from obtaining their diploma and official academic transcript, as well as prevent a student from registering for classes at any of the University of Maine campuses.

To remove/release Direct and/or Perkins Loan "Exit Hold(s)" the student will need to complete the appropriate (i.e., Direct /Perkins Loan) Exit Counseling session(s). Once Exit session(s) are completed successfully, (i.e., from the links available from the campus website) appropriate office(s) will be notified electronically and the "Exit Hold" will be removed. To resolve an "Exit Hold" issue, contact the office/department who has placed the Hold on your account. Complete appropriate Exit session(s) here.

If you are not able to complete an online Exit session, please contact the financial aid office at (207) 834-7605, or email the office at: umfkaid@maine.edu to request a (paper) packet, which will be mailed to you. Make sure to provide us with: your name, social security number, address and telephone number.

What lender(s) did I borrow from (in the past) and how can I contact them?

Prior to the 2010-11 school year, students may have borrowed from the FFELP Student Loan program. At that time students where obtaining student loans from banks and/or credit unions. Beginning with the 2010-11 year, FFELP loans were discontinued and Direct Loans became the new student loan. Direct Loans are processed through Direct Lending, with the Department of Education as the lender.

All students who borrowed student loans from the past or current years, now all have the Department of Education as their lender. The Servicers listed below collect the loan payments and service the loans for the Department of Education. Your student loans can be with any of the following Servicers. To check the location of all your Federal loans, go to: www.nslds.ed.gov (Note: Your FSA ID is required to log in to NSLDS. Apply for your FSA ID number at: fsaid.ed.gov). Contact the appropriate Servicer(s) to make payment arrangements using the information listed in the chart below.

If you have borrowed in the past from several different lenders, you may have to repay several different servicers monthly. Or, you may select to combine all your loans together to make one loan payment to one servicer. For more information on how to consolidate your loans, please visit our Consolidation page.

Servicer Website Phone Number
Direct Loan Serving Center (ACS) studentaid.ed.gov 1-800-557-7394
FedLoan Servicing www.myfedloan.org 1-800-699-2908
Great Lakes www.mygreatlakes.org 1-800-236-4300
Nelnet www.nelnet.com 1-888-486-4722
Sallie Mae www.salliemae.com 1-800-722-1300

Where can I find more information regarding Direct Loan Repayment, Consolidation and Deferments?

For Direct Lending borrowers, you may contact the Department of Education in one of the following ways:

Additional information on loan repayment and deferment may be found on our Repaying Your Loans page and under Additional Direct Loan Resources. Links and information pertaining to loan consolidation may be found on our Consolidation page.

OSFA Ombudsman Information

The SFA Ombudsman is working with student loan borrowers to informally resolve loan disputes and problems. They help borrowers having problems with the following federal loans:

  • Direct Loans - Subsidized and Unsubsidized Direct Student Loans, Direct PLUS Loans (for parents), and Direct Consolidation Loans
  • Federal Family Education Loans - Subsidized and Unsubsidized Stafford Loans, FFEL, PLUS Loans (for parents), and FFEL Consolidation Loans
  • Guaranteed Student Loans, SLS Loans
  • Perkins Loans

Ombudsman Contact Information

  • Phone: 1-877-557-2575
  • Fax: (202) 275-2549
  • Ombudsman Website
  • Mailing Address:
    U.S. Department of Education
    FSA Ombudsman
    830 First Street, NE
    Fourth Floor
    Washington, DC 20202-5144

Where Can I Find More Loan Information?

Additional links and resources relating to Direct Loans may be found under Additional Direct Loan Resources.