Direct Loans

When you apply for financial aid, you might be offered loans as part of your school’s financial aid offer. A loan is money you borrow and must pay back with interest- student loans can come from the federal government, from private sources such as a bank or financial institution, or from other organizations. Federal student loans usually have more benefits than private loans. Students must be in a minimum of six (6) credits to receive a direct loan.

How to Apply for Federal Student Loans

To apply for a federal student loan, you must first complete and submit a Free Application for Federal Student Aid (FAFSA^®) form. Based on the results of your FAFSA form, we will send you a financial aid offer, which may include federal student loans. You must accept or decline your loan in BayNavigator as needed.

Before you receive your loan funds, you will be required to

complete entrance counseling, a tool to ensure you understand your obligation to repay the loan; and
sign a Master Promissory Note, agreeing to the terms of the loan.

Direct Loan Type	Direct Loan Borrower	Annual Award (subject to change)
Direct Subsidized Loans	Eligible undergraduate students with demonstrated financial need	Up to $5,500, depending on grade level and dependency status
Direct Unsubsidized Loans	Eligible undergraduate, graduate, and professional students	Up to $20,500 (minus any subsidized amounts received for the same period) depending on grade level
Direct PLUS Loans	Parents borrowing money for their dependent undergraduate students Eligible graduate or professional students	Maximum amount is the cost of attendance (determined by the school), minus any other financial aid the student receives
Direct Consolidation Loans	Anyone with eligible federal student loans who wants to combine any number of these loans into a single loan	N/A

Additional Loan Information

Fees:

All Direct Subsidized Loans and Direct Unsubsidized Loans have a loan fee. The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement. The percentage for all Direct Subsidized and Unsubsidized loans first disbursed on or after Oct. 1, 2020, is 1.057%. Loans first disbursed before that date had different loan fees.

Interest Rates:

Interest is additional money that you pay to a lender as a cost of borrowing money. Interest is calculated as a percentage of the unpaid principal amount that you borrowed.
Direct Loans are “daily interest” loans. On daily interest loans, interest accrues (adds up) every day.
If your loans are subsidized, you are not responsible for paying the interest that accrues while you’re in school. If your loans are unsubsidized, you’re responsible for all the interest that accrues, even while you’re in school. Learn about the differences between subsidized and unsubsidized loans.

Loan Disbursement

Loan funds are typically disbursed after the first 45 calendar days in each semester. The school will first apply your loan funds to your account to pay for tuition, fees, and other school charges. If any additional loan funds remain, they will be returned to you. All loan funds must be used for your educational expenses.

Repayment

After you graduate, leave school, or drop below half-time enrollment (less than six credits), you will have a six-month grace period before you are required to begin repayment. During this 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. Learn more about repaying your loan.

Loan Deferment and Forbearance

If you are unable to make your scheduled loan payments, contact your loan servicer immediately. Your loan servicer can help you understand your options for keeping your loan in good standing. For example, you may wish to change your repayment plan to lower your monthly payment or request a deferment or forbearance that allows you to temporarily stop or lower the payments on your loan. Learn more about deferment or forbearance options.

MassBay Cohort Default Rate: Search by OPE-ID 002171

MassBay Loan Repayment Rate: Loan repayment rates and information are listed on MassBay’s scorecard