Federal Direct Loans
Federal Direct Loans, from the William D. Ford Federal Direct Loan (Direct Loan) Program, are low-interest loans for eligible students to help cover the cost of education at Pratt Institute. Eligible students borrow the funds directly from the U.S. Department of Education through Pratt.
Direct Subsidized Loans — are for students with financial need. Pratt reviews the results of each Free Application for Federal Student Aid (FAFSA) and determines the amount each can borrow per year. Students are not charged interest while in school at least half-time and during grace periods and deferment periods (this does not apply to forbearances). If a student graduates, leaves school, or drop below half-time enrollment, there will be a six-month grace period before repayment begins. Undergraduate students are allowed to borrow Subsidized Loans Annually up to the following limits: Freshman – $3,500, Sophomore – $4,500, Junior and Seniors – $5,500.
Direct Unsubsidized Loans — Students are not required to demonstrate financial need to receive a Direct Unsubsidized Loan (FAFSA is still required for this type of loan). Much like subsidized loans, Pratt determines the amount you can borrow. Interest accrues (accumulates) on an unsubsidized loan from the time it’s first paid out to Pratt. Students can pay the interest while in school and during grace periods and deferment or forbearance periods, or allow it to accrue and be capitalized (that is, added to the principal amount of your loan). If a student chooses not to pay the interest as it accrues, this will increase the total amount you have to repay because you will be charged interest on a higher principal amount. Undergraduate students are allowed to borrow an additional Annual Unsubsidized Loan of $2,000 as a Freshman, Sophomore, Junior, and Senior.
NOTE: All independent students and dependent student whose parent was DENIED (Documentation of denied PLUS Loan may be required) a Parent PLUS Loan may be eligible for additional unsubsidized loan amounts. For Freshman and Sophomores the additional unsubsidized Stafford Loan is $4,000. For Juniors & Seniors the additional unsubsidized Stafford Loan is $5,000.
Aggregated Direct Loan Limits (Subsidized and Unsubsidized):
Undergraduate Dependent Students:
$31,000 (no more than $23,000 of which can be subsidized).
Undergraduate Independent Students:
$57,500 (no more than $23,000 of which can be subsidized).
Direct PLUS Loans for Parents – Parents of dependent students may apply for a Direct PLUS Loan to help pay their child’s education expenses as long as certain eligibility requirements are met.
To be eligible for a Direct PLUS Loan for Parents:
- The parent borrower must be the student’s biological or adoptive parent. In some cases, the student’s stepparent may be eligible.
- The student must be a dependent student who is enrolled at least half-time at Pratt. Generally, a student is considered dependent if he or she is under 24 years of age, has no dependents, and is not married, a veteran, a graduate or professional degree student, or a ward of the court.
- The parent borrower must not have an adverse credit history (credits check will be done). If the parent does not pass the credit check, the parent may still receive a loan if someone (such as a relative or friend who is able to pass the credit check) agrees to endorse the loan. The endorser promises to repay the loan if the parent fails to do so. The parent may also still receive a loan if he or she can demonstrate extenuating circumstances.
- The student and parent must be U.S. citizens or eligible noncitizens, must not be in default on any federal education loans or owe an overpayment on a federal education grant.
Interest is charged from the date of the first disbursement until the loan is paid in full. The parent will pay an origination fee of the loan amount, deducted proportionately each time a loan disbursement is made. The repayment period for a Direct PLUS Loan begins when the loan is fully disbursed, and the first payment is due 60 days after the final disbursement. The parent will repay the servicer listed on the disclosure statement provided when he or she received the loan. The Direct PLUS Loan Program for parents offers three repayment plans-standard, extended, and graduated-that are designed to meet the different needs of individual borrowers. The terms differ between the repayment programs, but generally borrowers will have 10 to 25 years to repay a loan.
Interest Rates for Direct Loans First Disbursed on or After July 1, 2022, and Before July 1, 2023:
- Undergraduate Stafford: Direct Subsidized Loans and Direct Unsubsidized Loans: 4.99%
- Graduate Stafford: Direct Unsubsidized Loans: 6.54%
- Parent PLUS: 7.54%
- Grad PLUS: 7.54%
Information on interest rates and origination fees.
How to Apply
Direct Subsidized/Unsubsidized & PLUS Loans are generally included as part of a student’s award package (based on eligibility), which may contain other types of aid to help meet the costs of attendance at Pratt Institute.
- Complete the FAFSA online at FAFSA® Application | Federal Student Aid using the PIN as an electronic signature. To apply for a PIN or receive a duplicate copy visit Create an Account (FSA ID). Once the application has been completed, print out the application and Confirmation Page for record keeping. Be sure to use our school code: 00279800 to ensure we receive your application without delay.
- Students and Parents receiving a Direct Loan for the first time must complete a Master Promissory Note (MPN). The MPN is a legal document in which the borrower (student or parent) promise to repay their loan and any accrued interest and fees to the Department of Education. It also explains the terms and conditions of each loan type. If a student/parent previously signed an MPN to receive a FFEL (lender based) Program loan or Direct Loan 10 years ago, 2010, a new MPN will need to be signed for a Direct Subsidized/Unsubsidized & PLUS Loan to be processed.
- A MPN can be used for Direct Subsidized/Unsubsidized and PLUS Loans being received over several years of study, however a Parent PLUS Loan Authorization Form or Graduate PLUS Loan Authorization Form MUST be filled out each school year confirming the actual amount to be borrowed in the Direct Subsidized/Unsubsidized, and PLUS loans. NO LOANS WILL BE CERTIFIED AND ORIGINATED FOR DISBURSEMENT WITHOUT A PARENT PLUS LOAN AUTHORIZATION FORM OR GRADUATE PLUS LOAN AUTHORIZATION FORM ON FILE
- Undergraduate students who have not previously received a FFELP (lender based) or Direct Subsidized or Unsubsidized Loan at Pratt Institute must complete Direct Loan Entrance Counseling before they can receive the Subsidized or Unsubsidized Loan disbursement. The Direct Loan Entrance Counseling can be electronically completed via Entrance Counseling | Federal Student Aid. A Federal Student Aid PIN (FAFSA PIN) is required to complete online the Direct Loan Entrance Counseling.
The funds from each will be paid through Pratt Institute, generally in at least two installments. No installment may exceed one-half of your loan amount. If you’re a first-year undergraduate student and a first-time borrower, your loans funds will not disburse until 30 days after the first day of the semester. Pratt will use the loan funds first to pay for tuition and fees, room and board, and other billable school charges. If any loan funds remain, a refund check will be sent out to the student within 14 business days. All refund checks are mailed to the address submitted to the Registrar’s Office. If you have any questions regarding your refund checks, please feel free to contact Student Financial Services at 718.636.3599.
***In the case of a PLUS (Parent Loan) Loan, refunds checks are sent to the Parent borrower unless written authorization is given to Student Financial Services requesting that the excess funds from the PLUS loan be given to the student.