Federal Direct Loans

Direct Subsidized & Direct Unsubsidized Loans are fixed rate loans that do not require a credit check. Loans are made in the student’s name, and the student is responsible for paying back the entire loan sum plus accrued interest. Eligibility is based on the student’s FAFSA results. 

First-time borrowers must complete the Federal Direct Loan Master Promissory Note (MPN) and Entrance Counseling. Both can be completed online. Be sure to complete the Entrance Counseling appropriate for your program of study (undergraduate or graduate).

Students who have borrowed a Direct Subsidized or Direct Unsubsidized Loan at a previous institution may be able to use the same MPN for new Direct Loans borrowed at NMC.

Students are encouraged to complete the Annual Student Loan Acknowledgment each year, which is intended to help borrowers understand their loans and how they affect your financial future.

• Direct Subsidized Loans are available to undergraduate students with financial need as determined by the FAFSA results. The federal government pays interest on the loan while the student is in school at least half-time. The interest rate on Direct Subsidized Loans first disbursed during the period of July 1, 2024, through June 30, 2025, is fixed at 6.53% annually.  
• Direct Unsubsidized Loans are available to both undergraduate and graduate students. Unsubsidized loans are not based on financial need, though a FAFSA must still be completed in order to qualify. Interest begins to accrue at the time the loan is disbursed. The interest rate on Direct Unsubsidized Loans first disbursed during the period of July 1, 2024, through June 30, 2025, is fixed at 6.53% annually for undergraduate students and 8.08% annually for graduate students. 

A small fee is withheld from each loan disbursement. The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement. For loans first disbursed on or after Oct. 1, 2021 and before Oct. 1, 2025, the fee is 1.057%.

Direct PLUS Loans are fixed rate loans available to graduate students and parents of dependent undergraduate students. The interest rate on loans for the period of July 1, 2024, through June 30, 2025, is 9.08% annually, and interest begins to accrue when the loan is disbursed.

This loan is based on the borrower's credit history, and adverse credit may result in the loan being denied. A borrower with adverse credit may still receive a Direct PLUS Loan by providing a qualified endorser, or by documenting to the satisfaction of the U.S. Department of Education that there are extenuating circumstances related to the adverse credit history. If a Parent PLUS Loan is denied, the dependent student may be eligible for an additional Direct Unsubsidized Loan.

Direct PLUS Loans are not based on need, however a FAFSA must be completed in order to qualify. Borrowers are encouraged to complete the Annual Student Loan Acknowledgment each year to understand the responsibility to repay the loan and how the loan may impact your financial future.

• Graduate PLUS Loans are available to eligible students enrolled at least half-time in a graduate degree program. First-time borrowers of a Graduate PLUS Loan must complete Entrance Counseling for graduate students. In addition, the PLUS MPN for Graduate/Professional Students and the Direct PLUS Loan Application must also be completed. Entrance Counseling, the MPN, and PLUS Application can all be completed online. Students who have borrowed a Graduate PLUS Loan at a previous institution may be able to use the same MPN for new Graduate PLUS Loans at NMC.
• Parent PLUS Loans are available to the biological, adoptive, or in some cases, stepparent of a dependent undergraduate student enrolled at least half-time. The borrower must complete a Parent PLUS Loan Application and a PLUS MPN for Parents. If the parent borrowed a Direct PLUS Loan for the student at a previous college, NMC may be able to use the same MPN. Please notify the NMC Financial Aid Office if your parent borrower has borrowed a prior Direct PLUS Loan.
  

A small fee is withheld from each loan disbursement. The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement. For loans first disbursed on or after Oct. 1, 2021, and before Oct. 1, 2025, the fee is 4.228%.

The table below shows the annual and aggregate borrowing limits under the Direct Subsidized & Direct Unsubsidized Loan program.  Note that aggregate totals also include outstanding loans borrowed through the former Federal Family Education Loan Program (FFELP) which includes Stafford Loans and Guaranteed Student Loans.

The annual limit for Direct PLUS Loans is the cost of attendance minus any other financial aid received.

Repayment of Direct Subsidized, Unsubsidized and Graduate PLUS Loans begins six months after the student graduates, leaves school, or drops below half-time. There are several repayment options available, some of which are based on the borrower's income at the time of repayment. Select these links for additional information on repayment options, loan cancellation or discharge, loan deferment or forbearance, or loan repayment simulator.

Repayment for a Direct Parent PLUS Loan begins within 60 days after the loan is fully disbursed. However, the parent borrower may defer repayment while the student is enrolled at least half-time and for an additional six months after the student is no longer enrolled at least half-time. Payments on a Parent PLUS Loan may also be deferred if the parent borrower is enrolled in school at least half-time. Interest during these periods will be capitalized if not paid by the parent during the deferred payment period.