2012-2013 Direct Loan Changes
Changes mandated by the Consolidated Appropriations Act of 2012 and the College Cost Reduction and Access Act of 2007 will affect student loan repayment in the following ways:
- Previously, subsidized loan recipients who dropped below half-time enrollment status or who were not enrolled received a six month interest-free grace period. The federal government has temporarily eliminated this interest subsidy for subsidized student loans disbursed on or after July 1, 2012 and before July 1, 2014. So, if you receive a subsidized loan during this time frame, you will be responsible for interest that accrues during your grace period at the interest rate at which your loan was originated.
- The Federal Direct (Stafford) interest rate is a fixed 3.4 percent for undergraduate subsidized loans and 6.8 percent for undergraduate unsubsidized loans. (Congress approved law on 6/29/12 that preserves the 3.4 percent interest rate through 2012-2013).
As of November 2012, the Direct subsidized/unsubsidized master promissory note (MPN) was revised by the Federal government to reflect the grace period changes. Students with valid existing MPNs will not be required to complete the revised MPN at this time. These students may receive an MPN addendum however. You can view the MPN addendum for more information.
As more information becomes available, we will communicate it with you. In the meantime, if you have specific questions or concerns, please visit our office located in D101 on the main campus or send your questions to firstname.lastname@example.org.