General Information Regarding Direct Loans

Midwestern State University students who wish to borrow Subsidized, Unsubsidized and PLUS Loans will do so through the Federal Direct Loan program.  Direct Loans are funded by the federal government, not a bank or credit union. Students must complete the current Free Application for Federal Student Aid (FASFA) before loan eligibility can be determined.

Here are some important Direct Loan highlights:

Funding is secure
.  Direct Loans are processed through the U.S. Department of Education and the funds come directly from the U.S. Treasury;  banks or lending institutions do not fund the DL program Annual maximum loan amounts are determined by the federal government.


Fees and interest rates are more favorable.  Participating in this program is not only more secure, but many of the fees and rates are more favorable.  For example:

  • Federal Direct Loan fees are the same for all borrowers.  When working with private lenders, these fees vary by lender and guarantor.
  • Federal Direct Loans have lower origination fees than their private lender counterparts and that means more money to students up front.
  • All funds are received electronically, which means no paper checks and no delays in the disbursement of funds.
  • Interest rates are updated July 1 of every year.


Processing is streamlined.  Unlike working with private lenders, direct loans allow students to:

  • Borrow from one source – the U.S. Department of Education
  • Complete one electronic application – via the Department of Education Web site
  • Communicate with one entity regarding loan concerns – the Department of Education where these federal loans are made, guaranteed and serviced


Consolidation Loans exist.  The program will allow and help students consolidate their student loan debt which may help prevent loan delinquency or default.

And remember these important facts:

  • You will be required to complete an Electronic Master Promissory Note (E-MPN) and Entrance Counseling ONLY ONE TIME during your college career (at MSU or any other college/university) provided your college career does not exceed ten (10) years. 
  •  If you have been awarded a Subsidized and/or Unsubsidized Direct Loan for the Fall/Spring semesters, please be aware that your Fall/Spring loan amounts will reduce your loan eligibility for the upcoming Summer term(s).
  • If you have been awarded a Parent (PLUS) Loan, your parent must have a credit check performed each year AND your parent MAY be required to complete PLUS Credit Counseling if (a)the PLUS Loan is denied due to adverse credit and your parent submits an appeal, or (b) your parent is required to have an endorser on the PLUS Loan application. You will receive notification from if Credit Counseling is required for your parent..



Additional Information Regarding the Direct Loan Program is available at