Federal direct subsidized and unsubsidized loans are undergraduate and graduate loans funded by the federal government.

Federal direct subsidized loans are based on financial need. The federal government pays the interest during in-school, grace and deferment periods.

Federal direct unsubsidized loans are not based on financial need, and the federal government does not pay the interest for these loans. Students may choose to defer interest payments until repayment begins; however, the student is responsible for all interest that accrues. The accrued interest automatically capitalizes to the loan principal.

To be considered for an award, the student must:

• Be enrolled at least half time (six or more credit hours each semester for undergraduates, five or more credit hours each semester for graduates)
• Be a U.S. citizen or eligible noncitizen
• Demonstrate financial need (subsidized loans only)
• Maintain satisfactory academic progress (SAP)
• Not owe a refund on a federal student grant or be in default on a federal student loan

Entrance and exit counseling

The federal government requires students to participate in entrance counseling prior to receiving a federal direct loan for the first time. This must be satisfied prior to loan disbursement.

Students receiving federal loans must also complete an exit counseling session once they graduate or drop below half-time enrollment. Failure to complete exit counseling will prevent students from receiving a diploma, obtaining transcripts or registering for classes in future terms.

Master promissory note

In order to receive your federal direct loan funds, you must complete a Master Promissory Note (MPN).

Current regulations allow students to sign one promissory note that will be used for all subsidized and unsubsidized loans borrowed for up to 10 years. Therefore, returning students who received federal direct subsidized or unsubsidized loans at VCU beginning with the 2006-07 academic year may not be required to sign another loan promissory note.

Award amounts

Award amounts are initially offered based on full-year, full-time enrollment and are prorated for students who enroll less than full year, full time. Students in a second bachelor’s degree program may borrow at undergraduate maximum loan limits.

Interest rates and Loan Fees

The Interest Rates and Loan Fees on Direct Loans are determined by the Department of Education. Please visit https://studentaid.ed.gov/sa/types/loans/interest-rates for current Interest Rates and Loan Fees.

Loan disclosure

Students will receive their loan disclosure statement from the federal Loan Origination Center for each new loan borrowed. The disclosure statements provide information about the types and amounts of loans borrowed, the loan period and the anticipated disbursement dates. Students should maintain the statements for their records.

In order for the funds to be disbursed, students MUST accept the amount of loans that they wish to borrow in eServices. Students may decline, reduce, or request an increase in the amount of their loans by filling out the 2024-2025 Financial Aid Change Form, or by notifying the VCU Office of Financial Aid in writing. To avoid incurring interest charges and loan fees, funds must be returned within 120 days of disbursement. The loan fee will be reduced or eliminated in proportion to the amount of the disbursement returned.

Disbursement

Federal regulations require two disbursements of all federal direct subsidized and unsubsidized loans. If all necessary documents have been received and there are no changes in expected enrollment status, the first disbursement should be made during the first week of classes and the second disbursement should be made during the first week of classes of the second semester for fall/spring loans.

Refunds are deposited directly to the student’s designated bank account. If a student does not specify a bank account, a refund check will be mailed to the student’s permanent address on file.

Federal Direct PLUS loans are low-interest loans that graduate and professional students and parents of dependent undergraduate students can use to pay education costs not covered by other aid. These loans are not based on financial need, and the federal government does not pay the interest.

To be considered for these loans, students must:

• Complete the FAFSA
• Be enrolled at least half time
• Be a U.S. citizen or eligible noncitizen
• Be enrolled in a degree or certificate-granting program

Additionally, parent and graduate borrowers must complete the PLUS Loan application online at studentaid.gov. Applications for summer aid will be available online in mid-March and subsequent year applications will be available in mid-May.

To borrow a PLUS loan for a student, the parent must be the student’s biological or adoptive mother or father. A stepparent is also eligible to borrow a PLUS loan if his or her income and assets would be taken into account when calculating the dependent student aid index (SAI). A legal guardian is not considered a parent for federal student aid purposes.

Graduate students and parent borrowers will be required to pass a credit check. Borrowers with adverse credit history or who have filed bankruptcy in the past may be denied the PLUS loan. Borrowers who do not pass the credit check may still be able to receive a loan with a creditworthy co-signer. Additionally, if a borrower does not pass the credit check, the student may be eligible for a federal direct unsubsidized loan.

Promissory notes

In order to receive federal Direct PLUS loan funds, the borrower must complete an electronic Master Promissory Note (MPN).

Borrowers will receive their PLUS disclosure statement from the federal Loan Origination Center for each new loan borrowed. The disclosure statements provide information about the amount of money borrowed, the loan period and the anticipated disbursement dates. Borrowers should maintain the statements for their records.

If a co-signer is used on a PLUS loan, the borrower must complete a new MPN each year the co-signer is needed.

In order for the funds to be disbursed, students MUST accept the amount of loans that they wish to borrow in eServices. Borrowers may decline or reduce the amount of their original loan request by filling out a Financial Aid Change Form, or by notifying the VCU Office of Financial Aid in writing. To avoid incurring interest charges and loan fees, funds must be returned within 120 days of disbursement. The loan fee will be reduced or eliminated in proportion to the amount of the disbursement returned.

Award amounts

The yearly limit on a federal Direct PLUS loan is equal to cost of attendance (COA) minus any other available financial aid. For example, if the COA is $10,000 and the student is eligible for $8,000 in other financial aid, parents could borrow up to $2,000. Please check studentaid.gov to see current interest rates and origination fees

There is a fee deducted from each disbursement of a federal Direct Graduate PLUS loan. This fee goes to the federal government to help reduce the cost of this loan.

Disbursement

Federal regulations require two disbursements of all federal Direct PLUS loans borrowed within an academic year. If the loan is approved and all necessary documents have been received, the first disbursement should be made during the first week of classes, and the second disbursement should be made during the first week of classes at the beginning of the second semester for fall/spring loans.

Refunds are mailed to the loan borrower. Parent borrowers can request to have refunds released to the student by indicating this option on the loan request form.

The Federal Nursing Student loan is a low interest loan offered to undergraduate nursing students. The annual award maximum is $5,200; the aggregate award maximum is $17,000.

To be considered for this loan, students must:

• Be enrolled at least half time (six credit hours per semester for undergraduates)
• Maintain Satisfactory Academic Progress (SAP)
• Demonstrate financial need

Priority consideration for this loan will be given to students who submit the Free Application for Federal Student Aid (FAFSA) by March 1, 2025. This loan is awarded on a priority basis to eligible students.

VCU is the lender of this loan, which does not accrue interest while students are enrolled at least half time. Once the loan is accepted there will be further items needed, which will appear on eServices. Repayment of the loan will start nine months after graduation with a 5% fixed interest rate.

For more information, contact the Office of Financial Aid at (804) 828-2702 or email nabdul@vcu.edu.

The Virginia Commonwealth University Office of Financial Aid is committed to helping students achieve their educational goals by providing them with appropriate resources and guidance. VCU prides itself in providing students and their families with a professional and unbiased approach to making the dream of higher education a reality. Our objectives include helping students by providing as much student aid as is available from all sources of federal and state assistance, institutional grants/scholarships and private scholarships offered outside sources and student loans. As such, we believe strongly in Statement of Ethical Principles and the Code of Conduct provided by NASFAA.

Code of conduct for education loans

Compliant to HEOA, which was signed into Federal law Aug. 14, 2008, and the amendments added later, VCU has established this Code of Conduct for Education Loans.

It provides guidance and regulations to VCU employees involved with student loans to follow. It will be made available to them annually and accessible via VCU's website. In addition to the disclosures above, VCU employees will adhere to the following principles in the university's financial aid operations and will receive annual training on these standards of conduct:

Revenue-sharing

VCU and its employees will not participate in any revenue sharing loan products where the university receives any sort of profit from the loans the student and/or parent borrows.

Gifts

VCU and its employees will not accept, solicit or receive any gift or payment of other than nominal value (established as $10 per employee) from a lender. This includes payment or reimbursement for lodging, meals or travel to conferences or training sessions. VCU and its employees will not allow lenders to print financial aid pieces that have the university logo.

Contracting arrangements

VCU will not enter into consulting or contracting arrangements with any lender.

Lender assignment

VCU does not require any borrower, first-time or continuing, to select a specific lender. We will process a loan in a timely manner through any lender a borrower chooses.

Opportunity pool loans

VCU will not request or accepted any offer of funds for loans in exchange for providing the lender with a preferred lender arrangement or a specified number of loans or loan volume amount.

Staffing assistance

No lender shall provide staffing assistance to VCU except for the following: professional development training, educational counseling, financial literacy or debt management, provided the materials disclose to borrowers the identification of any lender that assisted in providing such materials.

Lender advisory boards

No VCU employee shall receive any remuneration or reimbursement of expenses for serving as a member or participant of a student loan advisory board of a lender's advisory board or council.

Private loans versus federal loans

VCU will continue to inform students about Title IV loan availability and options before proceeding to certify an alternative loan.

• AAA Advantage Loan
• ABE Student Loans
• Ascent
• Baxter Credit Union
• Chartway FCU
• Citizens Bank
• College Ave
• Custom Choice
• Digital Fed Cred Union
• Earnest
• Elements Financ Cred Un
• Funding U
• Granite Edvance Corp
• Iowa Student Loan
• Kemba Financ Cred Union
• Keystone Student Loan
• KHESLC
• Langley Federal Credit Union
• Lendkey
• M&T Bank
• MEFA
• MPower
• NavyFedCU
• NC Student Assist Loan
• Nelnet
• NJCLASS
• PHEAA
• PNC
• Rhode Island Stu Loan
• Sallie Mae
• SECU Credit Union
• SoFi
• South East Bank
• Thrivent FCU
• United FCU

The interest rate attached to your loan is most often determined based on your credit and the credit of your co-signer. Interest rates on private student loans can vary significantly and can be either variable or fixed, so it is best to check with the lender. Variable rates can sound nice at the time, but can increase based on the market, so a fixed interest is sometimes more often sought after. 

Interest on private student loans usually begins accuring immediately upon the inital disbursement of the loan, however this is not always the case. If your lender offers any interest deferral options, you should check the terms and conditions of such a deferral as there may be fine print attached. 

The rate at which interest compounds determines how frequently interest is added to the principal balance of your loan. Having a loan in which interest compounds at a less often rate (quarterly) will save you money in the long-run compared to interest that compounds more often (monthly or daily). 

Credit checks are almost always required for those applying for a private student loan, and also for their co-signer. These credit checks are known as "hard inquires." A hard inquiry could lower your scores by a few points, or it may have a negligible effect on your credit scores. In most cases, a single hard inquiry is unlikely to play a huge role in whether you're approved for a loan. And the damage to your credit scores usually decreases or disappears even before the inquiry drops off your credit reports for good (hard credit checks generally stay on your credit reports for two years). 

Generally speaking, co-signers aren't inherently required for private student loans. However, many students must obtain a co-signer as their creditworthiness may not be up to the strict standards of private lenders. In the event you do need a co-signer, it may be worth asking your lender if they offer a "co-signer release" option. This is offered by some private lenders and allows the co-signer to be removed from the obligations of the loan after the borrower (the student) makes several years of on-time payments. 

The interest rate offered by your private lender is based on the credit of both you and your co-signer. If you are approved for a private loan without a co-signer, then you may be able to get a better interest rate if your co-signer has better credit than you do. Credit history, credit score, income, and employment history are generally all factors that lenders consider when determining your credit score. 

Private student loan lenders generally have stricter underwriting requirements than federal student loans. The private student loan lender may review the debt to income ratio of any borrower or co-signer. If your debt to income ratio is a concern for you, this could be a question to ask your lender representative before applying. 

It depends upon the underwriting requirements of your lender. Different lenders may ask you for different documents substantiating the responses on your loan application. It is not uncommon for a private loan lender to verify information listed on your loan application. This may also include completing a Private Education Loan Applicant Self-Certification form.

Satisfactory Academic Progress (SAP) is required by some lenders, but not all. If you are failing SAP then you are no longer eligible for Federal or Institutional Financial Aid at VCU, such as Federal Direct Loans and scholarships and grants. If a student is failing SAP, then they may look to a private loan as it is one the few options remaining. However if you are failing SAP, it is important to make your lender aware of this so that they may offer you a loan that does not require good SAP standing.

The many different private lenders offer many different options when it comes to the deferral of payment. A common option is for students to defer their payments of their private loan while they are in school, both the deferral of principal and interest payments. However, some lenders may only offer you the option to defer principal and you may be required to make interest payments while you are in school rather than just letting the interest accrue. Even if interest payments aren't required while you are in school, it is a good idea to make interest payments while you are in school as this will slow the rate at which interest accrues and compounds and will save you money in the long-run. Check with your lender regarding your options. 

As mentioned above, repayment terms amongst private lenders vary significantly. Some lenders require repayment to begin shortly after initial disbursement, but many allow borrowers to defer their payments until they are out of school (although this will likely result in your loan accruing a significant amount of interest while you are in school). Even if your lender doesn't require you to make payments on your loan while you are in school, it would be a good idea to do some as it will result in less interest occurring in the long-run. 

Not all private lenders offer loans for international/DACA/undocumented students. However, there are some lenders that do. Should you be concerned about this, you should check with your lender to see if they have an option that best meets the needs of you and your family.