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Direct Loan Information

SNHU participates in the Federal Direct Loan Program. Direct loans are fixed-rate student loans for undergraduate and graduate students attending college at least half-time. Federal Direct Loans are the most common type of financial aid to assist with paying for school.

Direct Loans are available to eligible students who file a valid FAFSA. Please review your SNHU Financial Aid award letter for the amounts you qualify for. For more information on terms and interest rates, please visit the Federal Student Aid website.

Subsidized and Unsubsidized Direct Loans

Subsidized Direct Loans are awarded based on financial need. With a Direct Subsidized Loan, the government pays the interest on the loan while the student is in school and during the six-month grace period. First-time borrowers taking out federal Direct Subsidized Loans on or after July 1, 2013 are subject to the 150% Direct Subsidized Loan Limit, which limits the amount of time a student is eligible to borrow subsidized loans to 150% of their published program length.

Unsubsidized Direct Loans are loans with interest that is not paid by the government. The borrower is responsible for the interest on an unsubsidized loan from the date the loan is disbursed, even while the student is still in school. Students may defer paying the interest while they are in school by capitalizing the interest, which increases the overall payoff amount of the loan.

Direct Loan Borrower Requirements

First-time Direct Loan borrowers must complete the following requirements before a loan disbursement will be applied to his/her student account:

  • Complete Entrance Counseling online which helps you learn about a Federal Direct Loan, how the process works, how to manage your education expenses, and understand your rights and responsibilities as a borrower.
  • Complete the Master Promissory Note (MPN) which is a legal document in which you promise to repay the amount borrowed and any accrued interest to the U.S. Department of Education. It also explains the terms and conditions of your loan(s). Review a sample MPN to fully understand the terms and conditions of the Direct Loan as well as borrower responsibilities. SNHU uses the multi-year MPN which means students can borrow additional Direct Loans on a single MPN for up to ten years.

Borrower Rights and Responsibilities

As a Federal Direct Loan borrower, you have the right to:

  • Receive a copy of your promissory note before or after the loan is made.
  • Receive a disclosure statement, including information about interest rates, fees, loan balance, and the size and number of payments, before repayment of your loan begins.
  • Benefit from a grace period or deferred payment on certain loans after you leave school or drop below half-time enrollment, before your payments begin.
  • Prepay all or part of your loan without a prepayment penalty.
  • Choose from among several repayment options and periodically change your repayment plan, if necessary to obtain an affordable loan payment.
  • Receive written notice if your loan is sold to another lender.
  • Apply for a deferment (if eligible) of your loan payments for certain specified periods.
  • Request forbearance from your lender/servicer if you're unable to make payments and don't qualify for a deferment.
  • Receive proof when your loan is paid in full.

As a Federal Direct Loan borrower, you are responsibility for:

  • Repaying your loan, including accrued interest and fees, regardless of whether you complete your education, complete your program of study in the normal period allowed for program completion, obtain employment, or are satisfied with your education.
  • Completing exit counseling before you leave school or drop below half-time enrollment.
  • Notifying your lender/servicer within 10 days if you change your name, address or phone number; drop below half-time enrollment status; withdraw from school or transfer; or change your graduation date.
  • Directing all correspondence to your lender/servicer, which could change during the life of the loan.
  • Making monthly payments on your loan after leaving school, unless you are in your grace period or have been granted a forbearance or deferment.
  • Informing your lender/servicer of anything that might change your eligibility for an existing deferment.

Annual Borrowing Limits

Annual borrowing amounts are defined by an academic year and based on cumulative credits earned toward a specific degree program.

Year Dependent Student Independent Student
Freshman (0-29 undergraduate credits) $5,500 ($3,500 subsidized max) $9,500 ($3,500 subsidized max)
Sophomore (30-59 undergraduate credits) $6,500 ($4,500 subsidized max) $10,500 ($4,500 subsidized max)
Junior and Senior (60 or more undergraduate credits) $7,500 ($5,500 subsidized max) $12,500 ($5,500 subsidized max)
Graduate Student
$20,500 (unsubsidized only)

Lifetime Borrowing Limits

Direct Loan limits are defined by the government and dictate how much direct loans a student may borrow.

Student Type Lifetime Borrowing Limit
Dependent Undergraduate Student $31,000 ($23,000 maximum in subsidized loans)
Independent Undergraduate Student $57,500 ($23,000 maximum in subsidized loans)
Graduate Student $138,500 ($65,500 maximum in subsidized loans)

Responsible Borrowing

You should always borrow what you need to assist with the cost of education and not just the amount that is awarded. After you receive your award letter, if you find that you do not need all of the loans you qualify for to cover the current years tuition and expenses, then make sure to reduce or cancel loan amount(s) not needed. This will reduce your overall student debt when you enter repayment. To revise a loan award, please follow the procedure outlined in your award letter notification.

Direct Loan Instructions:

Students are required to sign a Master Promissory Note (MPN) and complete online Entrance Loan Counseling (ELC) before receiving a Direct loan.

If you are a first-time Direct Loan Subsidized and/or Unsubsidized borrower:

Step 1: Complete Entrance Counseling session

  • Go to
  • Log in to your account (or create a new account) using your FSA ID.*
  • Select "Undergraduate Students" dropdown
  • Choose 'Complete Entrance Counseling'
  • Follow the instructions to complete Entrance Counseling.

Step 2: Complete a Master Promissory Note (MPN)

  • Go to
  • Log in to your account (or create a new account) using your FSA ID.*
  • Select "Undergraduate Students" dropdown
  • Choose 'Complete Loan Agreement for a Subsidized/Unsubsidized Loan (MPN)'
  • Follow the instructions to complete the Master Promissory Note.

*If you do not remember your FSA ID, you can access it online at

Exit Counseling

After you graduate, drop to a less than half time status, or are no longer enrolled, you are required to complete exit counseling. Exit counseling prepares a borrower for repayment by reviewing borrowing history, identifying loan servicers, forecasting monthly payment schedules, identifying repayment plans, and provides strategies for successful repayment. You can complete this counseling requirement online by:

  • Going to
  • Log in to your account using your FSA ID.*
  • Select "Undergraduate Students" dropdown
  • Choose 'Complete Exit Counseling'
  • Follow the instructions to complete Exit Counseling

National Student Loan Data System (NSLDS)

The National Student Loan Data System (NSLDS) is the U.S. Department of Education's online database for federal student loan borrowers. NSLDS receives data from schools, loan guarantee agencies, the Direct Loan program and other Department of Education programs. This online resource allows you to be an educated borrower by providing loan types, loan amounts, loan servicers, and disbursement dates. These details are the first steps in determining the repayment plans that is right for you to successfully manage your debt.


Repayment for Federal Direct Loans begins six months after you graduate, withdraw, stop attending, or your enrollment status is less than half-time. The standard repayment term is ten years and the interest rate may vary depending on the type of Direct Loan and the disbursement date.

Please review this sample repayment schedule to provide insight into loan repayment under the standard repayment plan. This chart is for estimating purposes only.

Visit the Federal Student Aid Site to learn more about the following repayment plans and deferment/forbearance options depending on the type of Federal student loan borrowed:

  • Repayment plan options include Graduated, Extended, Revised Pay As You Earn (REPAYE), Pay As you Earn (PAYE), Income-Based Repayment (IBR), Income Contingent Repayment (ICR), and Income Sensitive Repayment Plan.
  • Deferment options include enrollment in graduate fellowship or approved rehabilitation training programs, unemployment, economic hardship-, service in the Peace Corps,- and active military service.
  • Discretionary forbearances include financial difficulties, medical expenses, change in employment and other reasons acceptable to your loan servicer.
  • Mandatory forbearances include service in a medical or dental internship, residency program, qualified teaching, national service award recipient in AmeriCorps, and activated members of the National Guard.

Loan Servicer

A loan servicer is a company that handles the billing and other services on your federal student loan. Your loan is assigned to a loan servicer by the U.S. Department of Education. The loan servicer will provide regular updates on the status of your Direct Loan, work with you on repayment plans, loan consolidation, and will assist you with other tasks related to your federal student loan. It is important to maintain contact with your loan servicer. If your circumstances change at any time during your repayment period, your loan servicer will be able to help. For more information about loan servicers, visit the Federal Student Aid Site.