Federal Direct Loans (FDL)

Federal Direct Loans Program

Application Procedures

A potential borrower ­MUST first file and receive a response from a FAFSA. Once the FAFSA is finalized, an applicant can apply for a William D. Ford Federal Direct Loan through the office of Financial Aid by completing a Direct Loan Request Form.

A counseling session and the completion of a Direct Loan Entrance Counseling are required for First-time borrowers.  It is also highly recommended for continuing student to complete a Financial Awareness Counseling.

In addition, once the loan is approved, a promissory note MUST be signed by the borrower in order to have the loan disbursed.


Eligibility for William D. Ford Federal Direct Loans

To be eligible for a Federal Direct Loan, a student must be:

  • MUST be matriculated and registered for a minimum of 6 undergraduate credits for the semester(s) that you are applying for. (SUMMER / FALL / SPRING)
  • You must maintain Satisfactory Academic Progress (SAP)
  • A U.S. Citizen or Eligible Non-Citizen (click here for list of Eligible Non-Citizen)
  • Must not have a Default status for a previous student loan

You must meet all eligibility requirements for Federal Financial Aid.   In addition, you must demonstrate financial need for the loan. Financial need is demonstrated when your EFC, plus the loan amount, plus any other financial aid you are receiving adds up to less than your cost of attendance.


Direct Loan Entrance / Financial Awareness Counseling

The Direct Loan Entrance / Financial Awareness Counseling can be completed on the internet at
Entrance Counseling | Federal Student Aid


How much money can I Borrow?

Academic Level Dependent Independent
1st Year – Fewer than 23 credits earned Up to $5,500 Per Year
(first 3,500 Subsidized)
Up to $9,500 Per Year
(first 3,500 - Subsidized)
2nd Year – 24 or more credits earned Up to $6,500 Per Year
(first 4,500 - Subsidized)
Up to $10,500 Per Year
(first 4,500 – Subsidized)
Undergraduate Aggregated Maximum $31,000 No more than $23,000 Subsidize $57,500 No more than $23,000 Subsidize

Please note: If you are not eligible to borrow the full amount you request in Direct Subsidize loan funds, or you believe you need additional loan funds, you may be able to request some or all the balance as a Direct Unsubsidized Loan. If you are a dependent student, your parents may be able to take out a Direct PLUS Loan for you. 


Are there any limitations on the amount I can Borrow?

Yes. You may not borrow more than the cost of attendance at Hostos C.C. minus the EFC minus any other financial aid you receive. Before processing your loan request, the Financial Aid Office will calculate the amount of loan assistance you are eligible for.

If your period of enrollment is less than a full academic year, the amount of loan assistance you are entitled to may be less than the maximum amounts per an academic year.

Lastly, The Office of Financial Aid may refuse to process your loan request or may otherwise reduce the amount of your loan. If so, a written explanation will be provided to the student.



When Should I Apply for a Loan?

A student loan is a serious legal and financial obligation. You should apply for a loan only after careful consideration of all other options for financing your education. Think of borrowing as a commitment to pursuing and completing your education successfully. If you find you have to interrupt your studies, you could face having to repay your loan without the education you went into debt to obtain.

Williams D. Ford Federal Direct Loan Applications will be available to students at the beginning of each academic year.  Visit the Office of Financial Aid for further information.


Do I have to sign a new Master Promissory Note each year?

Once you have signed an electronic or paper Master Promissory Note for a Federal Direct Loan, you are not required to sign a new MPN in most instances. The note already on file will be used for subsequent year loan borrowing under the Federal Direct Loan program. You always have the option of resigning your MPN every time you borrow but it is not a requirement. PLEASE NOTE: if you previously signed an MPN that did not result in a disbursement of Direct Loan funds, you must resign your MPN for subsequent loan requests.  


When do I receive my money?

Please note, first-time borrows are not scheduled to receive a disbursement until at least 30 days of the term has passed.

Every attempt is made to have the actual loan disbursement dates coincide with the anticipated disbursement dates on your Loan Disclosure Statement. However, this is not always possible. Your actual loan disbursement date depends on when your MPN is returned and acknowledged by the processor.

Your disbursement will be either in the form of a check or as a direct deposit. If you have elected the direct deposit option for receiving financial aid disbursements, your disbursement will be credited to your direct deposit account on the scheduled disbursement week. 

Before crediting any loan funds toward your tuition or releasing any funds to you, the college will verify that you enrolled on at least a half-time basis.

The Bursar's Office will calculate unpaid tuition and fee balances at the time your loan is disbursed. Deductions from your loan proceeds will be credited to your unpaid charges before you receive the balance of your funds.


May I receive my money all at once?

No. You will receive your loan money in at least two installments, neither of which will be more than one-half of the loan total. For loans covering the full academic year, the second disbursement will be approximately 30 days after the start of the spring semester. For loans covering one semester only, the second disbursement will occur about midway through the semester.


May I cancel all or part of my loan(s) after it has been disbursed?

You have up to 14 days after the loan has been first disbursed to cancel all or part of the loan and have it returned to the U.S. Department of Education. To cancel all or part of your loan you must come to the Financial Aid Office to fill out the William D Ford Federal Direct Loan Change Form.  On that form you may indicate that you want to cancel or decrease your loan.

You may cancel all or part of your loan by returning the funds yourself to the U.S. Department of Education within 120 days of the loan disbursement date. Contact the Direct Loan Servicing Center for guidance on how and where to return your loan money.

You do not have to pay interest or the loan fee on the part of your loan(s) that you return within these time frames.


What are the interest rates for Federal Direct Loans?

It varies. The interest rate for your loan is adjusted each year on July 1 and is calculated according to a federal formula. However, it will never exceed 8.25%. You will be notified as the interest changes throughout the life of the loan.

If you wish to find out the current academic year interest rates for each loan, please come to the Financial Aid Office for more information or you can click on the link below; Federal Interest Rates and Fees | Federal Student Aid


Am I charged interest while going to school?

SUBSIDIZED LOAN: “No”, the Federal Government supports or subsidizes the interest payments while you are in school and during any grace or deferment periods. You do not pay interest on a subsidized loan until your loan enters repayment.

UNSUBSIDIZED LOAN: “Yes”, the Federal Government does not pay the interest charges. You are charged interest from the day your loan is disbursed until it is fully repaid, including all in-school, grace and deferment periods. You have the option of either paying the interest as you go or allowing it to accumulate. If you allow the interest to accumulate, it will be capitalized, or added to the principal amount of the loan, thereby increasing the total amount you will have to repay.


Is there a charge for processing a loan?

Yes, there is a loan fee on all Direct Subsidized Loans and Direct Unsubsidized Loans. The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement. The percentage varies depending on when the loan is first disbursed.  For more information about the current process fee please click on the link below;
Federal Interest Rates and Fees | Federal Student Aid

When do I pay back my loan?

You have a six month Grace Period after you graduate, leave school, or drop below half-time before you begin repaying your loan. During the grace period, you do not have to make payments on the Principle and you are not charged any interest. You can, of course, prepay any portion of your loan at any time without penalty. In addition, during the grace period, you'll receive repayment information from your loan servicer, and you'll be notified of your first payment due date. Payments are usually due monthly


How do I pay back my loan?

The Federal Direct Loan Program offers a choice of several repayment plans that differ in a number of ways to meet the needs of individual borrowers. You may choose any one of the plans and, in most cases, can change from one plan to another during your repayment period. There is no limit to the number of times you may switch from one plan to another. Each plan has certain features and conditions that you must carefully consider before deciding which plan to use. You will be able to receive information about these plans as well as other repayment options (such as loan consolidation) at your exit counseling.
For more information about the various payment plans, click on the link below;
Repayment Plans | Federal Student Aid

If you can demonstrate that the repayment plans cannot accommodate your particular economic circumstances, the US Department of Education may provide you with an alternate repayment plan. You may want to read the U.S. Dept of Education's Repaying your Student Loans for more detailed information about repayment options.


Who manages my loan account?

When you receive your Direct Loan, you will be contacted by your loan servicer (you repay your loan to the loan servicer). Your loan servicer will provide regular updates on the status of your Direct Loan, and any additional Direct Loans that you receive. 
To identify your assigned Direct Loan Servicer, you may visit the StudentAid.Gov website


How can I find out how much I have borrowed?

You may access information about your student loan borrowing and other types of federal student aid you have received by visiting StudentAid.Gov


How do I Make a Payment?

Your loan servicer handles all billing regarding your student loan, so you’ll need to make payments directly to your servicer. Each servicer has its own payment process and can work with you if you need help making payments.

For more information about Loan Servicers, please click on the link below;
Who’s My Student Loan Servicer? | Federal Student Aid


What if I have trouble making my direct loan payments?

The first thing to do is to contact your Direct Loan Servicer. They will discuss with you the various options that may make it easier for you to manage your monthly payment schedule. You may be able to have your monthly payments lowered by changing to a different payment plan.

Under some circumstances, such as returning to school, becoming unemployed or suffering economic hardship, you may qualify for a deferment. If granted a deferment, you will be able to suspend regular loan payments for a certain time.

Being granted a deferment is not automatic. You must submit your request for a deferment in writing and continue to make your regular loan payments until the deferment is granted. You may view the approved conditions for obtaining a deferment and download the appropriate deferment form for your situation at the Direct Loan Servicing Online Deferment Forms page.

If you don't qualify for a deferment, you may be able to request forbearance. If granted forbearance, you may be permitted to reduce or delay your regular payments for a time. Being granted forbearance is not automatic. You must submit your request for forbearance in writing and continue to make your regular loan payments until forbearance is granted.  For more information you may visit Student Loan Forbearance | Federal Student Aid

Finally, if you have a number of educational loans and have difficulty making payments on all of them, you may qualify for a Federal Direct Consolidated Loan. Loan consolidation allows you to combine multiple loan debts into just one monthly payment and can help lower your monthly repayment amount by extending the repayment period.

For more information about avoiding a default status, click on the link below for more information;
Avoiding Default | Federal Student Aid


What happens if I don't make my loan payments on time?

If you don't make your loan payments on time and don't contact the Direct Loan Servicer about it, you will be considered delinquent in repaying the loan. If you fail to make payments for six months, the loan will go into default. If this happens, you can be asked by the federal government to repay the entire loan immediately. You can be sued to collect the amount of the original loan, plus interest, court costs and other penalties. You will be reported to national credit bureaus and have your credit rating adversely affected. Your income tax refunds may be withheld and up to 15% of your wages can be garnisheed to collect the debt. If you are receiving Social Security, the federal government may withhold a portion of your benefits to pay your loan debt. Finally, your school records will be impounded and you will be prohibited from receiving any federal student aid at any school you wish to attend until the default is resolved.


What can I do if I am notified I am in default?

Contact the Direct Loan Servicing Center. They will inform you under what circumstances you may have the default status rescinded and will discuss with you the possibilities for regaining your eligibility for financial aid and rehabilitating your loan.

You may regain eligibility for federal financial aid by making satisfactory payment arrangements on your defaulted loan with the loan servicer or guarantee agency handling your account. A satisfactory repayment arrangement is defined as making 6 consecutive voluntary monthly payments of an amount determined reasonable and affordable based on your financial circumstances.

If you make 9 consecutive, voluntary, and on-time monthly payments of a reasonable and affordable amount under an agreement with the loan servicer or guarantee agency, you will qualify for loan rehabilitation. Loan rehabilitation provides you with a "second chance" by removing your student loan from default status, restoring financial aid eligibility and reinstating deferment privileges.

For more information about getting out of a default status, please click on the link below;
Getting Out of Default | Federal Student Aid


Can I ever get out of repaying my loan?

There are certain exceptional circumstances, such as the borrower's death or permanent disability, which can result in the discharge or cancellation of a student loan. A discharge releases the borrower from all obligations to repay. There are also certain conditions under which your Direct Loan balance can be forgiven.

Remember that your loan cannot be discharged because you didn't complete your program of study, didn't like the school or couldn't find a job after graduation.

For more information about student loan forgiveness, click on the link below;
 Student Loan Forgiveness | Federal Student Aid



What are my rights as a Direct Loan Borrower?

You have a right to:
  • written information about your loan obligation, information on loan consolidation and refinancing, and a list of your rights and responsibilities as a borrower.
  • a copy of your promissory note, and return of the note when your loan is paid in full.
  • information, before you begin repayment, on interest rates, fees you might be charged and how they are collected, and the total balance owed on your loans.
  • a loan repayment schedule that lets you know, before you begin repayment, when your first payment is due, the number and frequency of payments, and the amount of each payment.
  • an explanation of default and its consequences.
  • an explanation of the grace period, and of federal interest benefits, if you qualify for those benefits.
  • pre-pay your loan at any time without penalty.
  • a description of applicable deferment, forbearance and discharge provisions.


What are my responsibilities as a Direct Loan Borrower?

You have a responsibility to:

  • repay the loan according to the loan repayment schedule even if you don't receive a bill or repayment notice.
  • notify the Direct Loan Servicing Center in advance if you will be late in making a payment or if you are unable to make payments.
  • notify the Direct Loan Servicing Center of anything that affects your ability to repay, or your eligibility for a deferment, forbearance or cancellation.
  • notify the College, if you are still enrolled, or the Direct Loan Servicing Center of any change in your name, address, Social Security Number or any change in your employer's name or address.
  • notify the Direct Loan Servicing Center if you fail to enroll for the period covered by the loan, or if you graduate, withdraw from school, begin attending less than half-time, or transfer to another school.
  • receive online or in-person entrance counseling before you are given your first loan disbursement and exit counseling before you leave school.
What is a Direct PLUS Loan?
The U.S. Department of Education makes Direct PLUS Loans to eligible borrowers through schools participating in the Direct Loan Program.
Here’s a quick overview of Direct PLUS Loans:
  • The U.S. Department of Education is your lender.
  • You must not have an adverse credit history.
  • The maximum loan amount is the cost of enrollment (determined by the school) minus any other financial aid 
For more information about a Direct PLUS Loan please click on the link below;
PLUS Loans | Federal Student Aid