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Federal Loans

Student loans, unlike grants and work-study, are borrowed money that must be repaid, with interest. Only borrow what you need! You do not have to accept a loan. If you do, you are not required to accept the full amount or you may also cancel all or a portion of the loan later.

You must be enrolled in a minimum of six credit hours to be eligible for loan assistance. All loan disbursements are made based on your enrollment. For example, if you attend both fall and spring terms, you would receive one disbursement in the fall and one in the spring. If you only plan to attend the fall term due to anticipated graduation in December, you would only receive one disbursement.

All first time borrowers must complete Entrance Counseling, and a Master Promissory Note prior to disbursement of funds at You will need your FSA ID to complete both requirements. Entrance counseling ensures that you are aware of your rights and responsibilities as a borrower. After a brief tutorial, you are required to pass a quiz which will be forwarded to Shepherd University. You can also meet with a financial aid counselor to satisfy this requirement.

When a student gets ready to graduate, drops below half time, or leaves school, the Department of Education requires you to complete Exit Counseling to ensure, once again, that you are aware of your rights and responsibilities as a borrower. By using your FSA ID, you can determine which repayment plan is best for you. You can also meet with a financial aid counselor to satisfy this requirement.

Federal Perkins Loans (no longer available)

The Federal Perkins Loan is a long-term, low-interest subsidized loan awarded by the Office of Financial Aid. It has a fixed 5% interest rate, and a nine-month grace period between the time you graduate or leave school and the time you begin repayment. Students who accept this loan must complete a promissory note at

Cancellation provisions are available in some situations which may, under certain circumstances, release the borrower from the obligation to repay the loan in full. The rate of cancellation is typically 15% for the first and second years, 20% for the third and fourth years and 30% for the fifth year; however, rates can vary.

Federal Direct Stafford Loans

Federal Direct Stafford Loans are federal loans available to degree-seeking undergraduate, graduate, and doctoral students students enrolled at least half-time. Half-time at Shepherd University is defined as six credit hours for undergraduates and five credits for graduate and doctoral students. Federal Direct Loans can be subsidized and/or unsubsidized. These loans are not credit-based and carry a current origination fee of 1.059%. The origination fee is deducted from the loan amount prior to its disbursal to the university. The Federal Direct Loan is borrowed directly from the U.S. Department of Education.

Repayment of all Federal Direct Loans typically begins six months after a student graduates, withdraws, or drops below half-time enrollment. This period of time is called a grace period. Students are granted one grace period. Students may have longer than six months if they are on active duty in the military.

The Federal Direct Subsidized Loan is awarded on the basis of financial need as determined by the FAFSA. As long as the student is enrolled at least half-time, no interest will accrue prior to repayment of the loan or during authorized periods of deferment.

For students who borrow for the first time after July 1, 2013, the interest subsidy will expire if their enrollment exceeds 150% of the length of their academic program. This new rule means students enrolled in a four-year program will be eligible for subsidized student loans for the equivalent of six years. Once a borrower has reached the 150% limit, his or her eligibility for the interest subsidy ends for all outstanding subsidized loans that were disbursed on or after July 1, 2013. At that point, the interest on those previously borrowed subsidized loans would begin to accrue and would be payable in the same manner as interest on unsubsidized loans.

The Federal Direct Unsubsidized Loan is not awarded on the basis of financial need. Unlike a subsidized loan, interest will begin to accrue immediately from the time the loan is disbursed until it is paid in full. Students are permitted the option of paying the interest each quarter or deferring interest payments until they enter repayment. If the student allows the interest to accrue while they are in school or during other periods of nonpayment, it will be capitalized – that is, the interest will be added to the principal amount of the loan, and additional interest will be based on that higher amount.

Depending on a student’s financial need, their Federal Direct Loan could be a combination of both subsidized and unsubsidized.

Annual Subsidized & Unsubsidized Direct Loan Limits

Dependent Students Independent Students
Freshman (0-29 credits) $5,500 (up to $3,500 of this amount may be subsidized) $9,500 (up to $3,500 of this amount may be subsidized)*
Sophomore (30-59 credits) $6,500 (up to $4,500 of this amount may be subsidized) $10,500 (up to $4,500 of this amount may be subsidized)*
Junior and Senior (60 or more credits) $7,500 (up to $5,500 of this amount may be subsidized) $12,500 (up to $5,500 of this amount may be subsidized)*
Graduate and Doctoral Students $20,500 (available as unsubsidized only)

*Students whose parents are denied the Federal Direct Parent PLUS Loan are also able to borrow at this level.

Aggregate Federal Direct Loan Limits

Type Amount
Undergraduate Subsidized Limit $23,000
Undergraduate Dependent Combined Limit (subsidized and unsubsidized) $31,000
Undergraduate Independent Combined Limit (subsidized and unsubsidized) $57,500
Graduate Subsidized Limit (including all undergraduate loans) $65,500
Graduate Combined Limit (including all undergraduate loans) $138,500

Annual Subsidized & Unsubsidized Direct Fixed Interest Rates

Undergraduate Graduate and Doctoral
2021-2022 (7/1/2021-6/30/2022) 3.734% 5.284%
2020-2021 (7/1/2020-6/30/2021) 2.75% 4.30%
2019-2020 (7/1/2019-6/30/2020) 4.53% 6.08%
2018-2019 (7/1/2018-6/30/2019) 5.05% 6.60%
2017-2018 (7/1/2017-6/30/2018) 4.45% 6.00%
2016-2017 (7/1/2016-6/30/2017) 3.76% 5.31%
2015-2016 (7/1/2015 – 6/30/2016) 4.29% 5.84%

Federal Direct Parent PLUS Loan

Federal Parent PLUS Loans are federal loans parents can borrow to pay for their dependent student’s educational expenses. Students must be considered a dependent by the FAFSA, be a degree-seeking undergraduate, and must be enrolled at least half-time. Eligible parents who can borrow a PLUS Loan include a student’s biological parents, whether they were listed on the FAFSA or not, and stepparents whose income was reported on the FAFSA. Parents must also pass a credit check in order to be approved for this loan.

Parent PLUS Loans currently carry an origination fee of 4.236% and have a fixed interest for the 2020-2021 year of 6.284%. The PLUS Loan is borrowed directly from the U.S. Department of Education. The parent cannot have an adverse credit history. The credit check will be done by the US Department of Education. Should the application be denied, the student will be eligible to borrow additional unsubsidized loan funds. Parents may borrow for each year of their student’s undergraduate career, though subsequent credit checks will be required. Credit checks are valid for up to 180 days.

Parent loan funds can be used for tuition, supplies, housing, and more. Parents may complete the application and have credit results immediately at The parent must sign in with their FSA ID, and then select “Complete PLUS Request Process.” The FAFSA and a Direct PLUS Request must be applied for each year.

Consolidation Loans

There may be advantages to consolidating (combining) your federal student loans into one loan, starting with the convenience of making a single monthly payment.
Consolidation generally extends the repayment period, resulting in a lower monthly payment. This may make it easier for you to repay your loans. You may pay more interest if you extend your repayment period through consolidation. Contact the Direct Loan Consolidation Center for more information about loan consolidation at 1-800-557-7392. TTY for the hearing-impaired: 1-800-557-7395.

Stafford Loan Forgiveness Program for Teachers

The Teacher Loan Forgiveness Program is intended to encourage individuals to enter and continue in the teaching profession. Under this program, individuals who teach full time for five consecutive, complete academic years in certain elementary and secondary schools that serve low-income families and meet other qualifications may be eligible for forgiveness of up to a combined total of $17,500 in principal and interest on their FFEL and/or Direct Loan program loans. For additional details, go to Stafford Loan Forgiveness Program for Teachers.

Public Service Loan Forgiveness (PSLF)

The Public Service Loan Forgiveness Program was created to encourage individuals to enter and continue to work full-time in public service jobs. Under this program, you may qualify for forgiveness of the remaining balance due on your eligible federal student loans after you have made 120 payments on loans under certain repayment plans while employed full time by certain public service employers. For additional details, go to Public Service Loan Forgiveness Program.

Online Enrollment Verifications are available now!
Also available: check your loan deferment status online!

RAIL offers enrollment verification for loan companies. This free self-service option is based on an agreement between Shepherd University and the National Student Loan Clearinghouse (NSLC), which already provides enrollment and degree verification for Shepherd University as well as for most colleges and universities nationwide.

Log on to RAIL
Click on “Student Services and Financial Aid”
Click on “Student Records”
Click on “Request Enrollment Verification”
Click on “Request Enrollment Verification for (your name).” (This step will send you to another secure website.)
Click on “Obtain an Enrollment Certificate”
View and/or print your enrollment verification certificate.