Federal Direct Loans are available to graduate and undergraduate students. Students must be enrolled at least half time to receive a Direct Loan. Federal Direct Loans borrowed while enrolled at another institution may impact a student’s loan eligibility at Walden University. Before any funds are disbursed you must read important disclosure information regarding your student loan(s). The Disclosure Statement provides information about the Direct Subsidized Loan and/or Direct Unsubsidized Loan that Walden University plans to disburse (pay out) by crediting your school account, paying you directly, or both. There is also a Plain Language Disclosure that will explain the terms of your loan(s). Both disclosures are available at www.studentloans.gov. Please keep a copy of all disclosures for your records.

All information submitted for the purpose of securing a federal student loan will be submitted to the National Student Loan Database (NSLDS) and accessible by authorized agencies, lenders and institutions. The student loan borrower is responsible for knowing the total amount of federal loans borrowed. A summary of an individual’s federal loan debt is available via the NSLDS website (www.nslds.ed.gov/nslds_SA/).

Federal Direct Loans

Federal Direct Subsidized Loans are need-based loans available only to undergraduate students. The federal government pays the interest on this loan while the student is enrolled at least half time in school. Students typically have a 6-month repayment grace period for all federal loans. A grace period is a period of time after borrowers graduate, leave school, or drop below half-time enrollment where they are not required to make payments on certain federal student loans. Some federal student loans will accrue interest during the grace period, and if the interest is unpaid, it will be added to the principal balance of the loan when the repayment period begins.

Federal Direct Unsubsidized Loans are available to undergraduate and graduate students. These loans require that the student pay the interest while enrolled, unless the student arranges to postpone the interest payment by checking the appropriate box on the Master Promissory Note. Students should be careful when choosing this option: It means that the interest will be capitalized (the accrued interest will be added to the principal amount), increasing the amount of the debt.

    The interest rates for undergraduate subsidized and unsubsidized Direct Loans disbursed on or after July 1, 2013 through June 30, 2014 are fixed at 3.86%.

    The interest rates for undergraduate subsidized and unsubsidized Direct Loans disbursed on or after July 1, 2014 through June 30, 2015 are fixed at 4.66%.

    The interest rates for undergraduate subsidized and unsubsidized Direct Loans disbursed on or after July 1, 2015 through June 30, 2016 are fixed at 4.29%.

    The interest rates for graduate unsubsidized Direct Loans disbursed on or after July 1, 2013 through June 30, 2014 are fixed at 5.41%.

    The interest rates for graduate unsubsidized Direct Loans disbursed on or after July 1, 2014 through June 30, 2015 are fixed at 6.21%.

    The interest rates for graduate unsubsidized Direct Loans disbursed on or after July 1, 2015 through June 30, 2016 are fixed at 5.84%.

Both the subsidized and the unsubsidized Direct Loans disbursed on or after December 1, 2013 through September 30, 2014 have a 1.072% origination fee.

Both the subsidized and the unsubsidized Direct Loans disbursed on or after October 1, 2014 through November 30, 2015 have a 1.073% origination fee.

Direct Stafford subsidized and unsubsidized loans first disbursed on or after October 1, 2015 and before October 1, 2016 have a 1.068% origination fee. 

Students have a six-month repayment grace period after graduating, leaving school, or dropping below half-time status. If you choose not to pay the interest that accrues during the grace period, the interest will be added to the principal balance.

Creditworthiness is not a requirement to obtain a Direct Loan. Under this program, students may borrow up to the maximum loan limit every award year (i.e., nine months for quarter-based, 12 months for semester-based). Loan funds can be used to cover direct education costs, such as tuition and fees and room and board, as well as indirect costs, such as books and other education-related expenses.

Read important federal financial aid changes for 2015–2016.

Federal Loan Counseling Requirements

If you are a first-time borrower, you are required to complete Direct Loan entrance counseling prior to receiving the first disbursement of a Direct Loan. Counseling is completed online at www.studentloans.gov and will help you understand your rights and obligations as a student loan borrower. Loan counseling must be completed before you can receive loan funds.

Federal regulations also require that you complete exit counseling to help you to understand the responsibilities and repayment obligations for your student loans. Exit counseling is completed online at https://studentloans.gov/myDirectLoan/counselingInstructions.action. To assist you, the U.S. Department of Education has compiled the Exit Counseling Guide for Federal Student Loan Borrowers. This process should be completed: before you graduate; before transferring to another institution; before withdrawals and leaves of absence; or if you are enrolled less than half time.

Federal Loan Limits

The federal government limits the total and annual amount of Federal Direct Loans that you can borrow. Learn more.

Loan Repayment

Students must keep in mind that they are legally responsible for fully repaying all of their loans according to the terms outlined in their Master Promissory Note. Students are required to repay their loans regardless of whether they complete their education, are able to find employment, or are satisfied with their education. Students should make every reasonable attempt to minimize the amount that they borrow by borrowing only what they need and what they can afford to repay.

Repayment Estimator is a tool that William D. Ford Federal Direct Loan (Direct Loan) and Federal Family Education Loan (FFEL) program borrowers can use to obtain preliminary repayment plan eligibility information and estimated repayment amounts. This easy-to-use tool offers borrowers the opportunity to obtain preliminary repayment information across all of the repayment plans. Its advantage over repayment plan-specific calculators is that it provides side-by-side results for all plans and information about the total cost of a loan over time. The new repayment estimator is available for borrower use on the www.studentloans.gov.


Interest rate: payments are calculated using the fixed interest rate of 6.8%.

Graduated repayment plan: an estimated monthly repayment amount for the first two years of the term and total loan payment. The monthly repayment amount will generally increase every two years, based on this plan.

Income-Contingent Repayment plan: assumes a 5% annual growth (Census Bureau) and calculated using the formula requirements in effect during 2006.

HOH is head of household: assumes a family size of two.

Source: Federal Student Aid Office, U.S. Department of Education, “Your Federal Student Loans: Learn the Basics and Manage Your Debt,” on the Internet at www.studentaid.ed.gov/sites/default/files/your-federal-student-loans.pdf (viewed online Aug. 30, 2012).

Loan Default

Default is a legal term for a borrower’s failure to repay a loan according to the terms agreed to when he or she signed a promissory note. For the Federal Direct Student Loan Program, default occurs when a borrower fails to make a payment for 270 days under the normal monthly repayment plan.

Avoiding Default

Consequences of Default

The consequences of default are severe. The lender or agency that holds the student loan and the state and federal government will normally take legal action to recover the money the student owes. Other consequences include but are not limited to:

  • The lender can notify national credit bureaus of the student’s default. This may affect the student’s credit rating for as long as seven years. For example, the student might find it difficult to borrow money from a bank to buy a car or a home.
  • The Internal Revenue Service can withhold the student’s U.S. Individual Tax Refund and apply it to the amount the student owes.
  • The agency holding the loan might ask the student’s employer to deduct payments from his or her paycheck; this is known as wage garnishment.
  • The student generally will be liable for loan collection costs.
  • If the student returns to school, he or she generally will not be eligible for additional federal aid.

Federal Loan Deferments

Under certain circumstances, a repayment of a federal loan may be deferred. During deferment, you are not required to pay loan principal, and interest on subsidized loans does not accrue. To learn more about deferments, read the Summary of Loan Deferment Conditions for Stafford and Perkins Loans Borrowers.

Students who have a valid Social Security number on file at Walden will have their enrollment here reported and updated monthly with the National Student Clearinghouse (NSC). The NSC communicates electronically with the federal and non-federal loan servicers to ensure that students who remain enrolled maintain the in-school deferments for which they are eligible. Borrowers who seek to defer repayment of their prior student loans and do not want to rely on the electronic exchange with the NSC must fill out forms to have their enrollment status verified. Forms from their lender(s) should be sent directly to Walden University, Office of the Registrar, Attn: Loan Deferment, 650 S. Exeter Street, Baltimore, MD 21202; fax: 1-410-209-8044. At the top of the form, students should include their enrollment start date and the term for which they are requesting an in-school deferment. Any deferment paperwork sent to Walden’s Office of the Registrar for enrollment verification is forwarded to the NSC on a weekly basis.

Do you have questions about financial aid? If you haven’t yet applied to Walden, please contact an enrollment advisor at 1-866-492-5336 in the United States. If you are a current student, please contact a financial aid advisor at finaid@mail.waldenu.edu or call 1-800-WALDENU (1-800-925-3368).

*Due to federal sequestration, loan fees are subject to change.

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