Direct Loans

A Direct Loan is funding through the Federal government and requires the student to have a completed FAFSA on file.  Students must be making Satisfactory Progress with NMU and enrolled at least half time (6 credit hours for undergraduate students and 4 credit hours for a graduate student per semester).  These amounts will be limited by cost of attendance limits and aggregate loan maximums.  This loan will be deferred while the student is enrolled in school at least half time status.

Please borrow responsibly by only borrowing what you need.  Remember that students will be responsible to repay all student loans.

Federal Direct Loan Eligibility


Parent information required on the Free Application for Federal Student Aid (FAFSA)

(All loans are subject to budget maximums)

Program Grade Level



Total Eligibility
Diploma   $ 3,500 $ 2,000 $ 5,500
Certificate   $ 3,500 $ 2,000 $ 5,500
Associate Freshman $ 3,500 $ 2,000 $ 5,500
Associate Sophomore, Junior, Senior $ 4,500 $ 2,000 $ 6,500
Associate Post-Baccalaureate $ 4,500 $ 2,000 $ 6,500
Bachelor Freshman $ 3,500 $ 2,000 $ 5,500
Bachelor Sophomore $ 4,500 $ 2,000 $ 6,500
Bachelor Junior and Beyond $ 5,500 $ 2,000 $ 7,500
Bachelor Post-Baccalaureate $ 5,500 $ 2,000 $ 7,500

Aggregate Loan Limits:  $31,000 (maximum $23,000 subsidized)
Maximum Total Outstanding Loan Debt


No Parent information required on the Free Application for Federal Student Aid (FAFSA)

(All loans are subject to budget maximums)

Program Grade Level Subsidized
Total Eligibility
Diploma   $ 3,500 $ 6,000 $  9,500
Certificate   $ 3,500 $ 6,000 $  9,500
Associate Freshman $ 3,500 $ 6,000 $  9,500
Associate Sophomore, Junior, Senior $ 4,500 $ 6,000 $10,500
Associate Post-Baccalaureate $ 4,500 $ 6,000 $10,500
Bachelor Freshman $ 3,500 $ 6,000 $  9,500
Bachelor Sophomore $ 4,500 $ 6,000 $10,500
Bachelor Junior and Beyond $ 5,500 $ 7,000 $12,500
Bachelor Post-Baccalaureate $ 5,500 $ 7,000 $12,500

Aggregate Loan Limits:  $57,500 (maximum $23,000 subsidized)
Maximum Total Outstanding Loan Debt


No Parent information required on the Free Application for Federal Student Aid (FAFSA)

(All loans are subject to budget maximums)
Unsubsidized Only Additional Unsubsidized Total Eligibility
$ 8,500



Direct Loan Awarding

As a part of your financial aid, you may have been offered a William D. Ford Federal Direct Loan. If you accept this loan offer, you will be borrowing money from the U.S. Department of Education and agreeing to repay it under the terms and conditions of the loan. Loan information will also be sent to the National Student Loan Database System (NSLDS) and may be accessed by future schools, loan guarantee agencies, and lenders.  Students can view their previously borrowed loans by accessing  Your Federal PIN will be required to access the site.

First-time Direct Loan borrowers must complete entrance counseling and promissory note requirements (see First-Time Borrower Requirements below) .

Direct Subsidized Loans do not accrue interest while a student is enrolled at least half-time.  Financial need must be demonstrated in order to qualify for a subsidized loan.  For the 2017-2018 school year, a subsidized loan is a fixed 4.45% interest rate.

Direct Unsubsidized Loans do build interest, even while a student is enrolled and during grace periods. You can elect to pay the interest costs as they are billed or you can defer payment of the interest and it will be added to the loan principle.  The interest rate for the unsubsidized loan is a fixed 4.45% for undergraduates and 6% for graduate students.  Financial need is not required to obtain an unsubsidized loan.

Direct Loan Process

Each academic year ALL new and continuing students awarded Federal Direct Loans are required to accept or decline the loan online.  This is the case whether or not you have used student loans in the past.  In order to accomplish this, please follow the directions listed below. 

To accept or decline your Federal Direct Loans and view your financial aid award:

Log in at

  1. Click on the STUDENT SERVICES tab
  3. Choose:  AWARD
  4. Choose:  AWARD FOR AID YEAR
  5. Select aid year and submit
  6. Choose:  AWARD OVERVIEW tab to view award package
  7. Choose:  ACCEPT AWARD OFFER tab
  8. Accept or decline award offer
  9. To make adjustments after you accept or decline a loan, please e-mail
  10. First- time borrowers only - see the section below for your additional requirements

First-Time Borrower Requirements

Entrance Counseling: You must complete an Entrance Counseling session before we can disburse loan funds to you. This requirement can be met by completing a counseling session on-line at:  Although the information will be sent to NMU electronically, please print and retain a copy for your records.

Promissory Note:   You are required to complete a Master Promissory Note (MPN) before loan funds can be disbursed to you. You can complete an electronic promissory note online at:  You will need your Federal Student Aid ID in order to complete the electronic MPN.  

Click here to view a summary of your Rights and Responsibilities under the Direct Loan program.

If you are unable to complete this promissory note and would like to request a paper promissory note, please let us know.  You may also contact our office (906)227-2327 to set up a time to complete the session in our office.  If you choose this option, please bring your mobile device to ensure computer access.

Understand the Timing of Disbursements

Two Disbursement Requirements: Loans made for the regular academic year will have one disbursement for fall and one for winter. For students with one semester loans (fall-only or winter-only), the full loan amount will be paid out at the beginning of the semester if all requirements have been met. For students with summer loans, the two disbursement requirement means that there will be a delay in the full disbursement of the loans. Summer loans will have both disbursements within that semester, with the second disbursement being no earlier than the midpoint of the semester.

Interest Rates

Interest rates will be established each year based on the sum of a uniform "index rate" plus an "add-on" that varies depending on the type of loan (Subsidized/Unsubsidized or PLUS) and the borrower's grade level (undergraduate or graduate/professional). Thus, interest rates will be the same for Direct Subsidized Loans and Direct Unsubsidized Loans taken out by an undergraduate student, with a different rate for Direct Unsubsidized Loans taken out by a graduate student and for PLUS Loans taken out by parent borrowers.

The index rate is determined each year as the "high yield of the 10-year Treasury note" auctioned at the final auction held prior to the June 1 preceding the July 1 of the year for which the rate will be effective, plus a statutorily defined "add-on".  The interest rate for a loan, once established, will apply for the life of the loan - that is, the loan will be a fixed-rate loan. As a result, it is likely that many borrowers will have a set of fixed-rate loans, each with a different interest rate.










Repayment Information

Repayment of subsidized and unsubsidized loans begins six months after the student graduates, leaves school or drops below half-time enrollment.  To access information on your previously disbursed Direct Loans, as well as an overall balance, go to the Department of Education's National Student Loan Data System website.  Based on the Winter 2017 Semester results the average graduating student borrowed $26,427 in Direct Loans.

Sample Repayment A student that borrowed $26,427 in Direct Loans at 4.125%* while at Northern Michigan University who enrolls in the Direct Loan standard repayment plan would expect to pay $270 a month for 10 years (120 payments).  To calculate your estimated monthly payments on your Federal loans, use the calculator on the Department of Education's website here.

Exit Counseling Students who borrowed Direct Loans while at Northern Michigan University must complete exit counseling at  This counseling will not only stress the necessity of paying back your Direct Loans, but also give you options for repayment, options if payments cannot be made on time, etc.  Please remember, the longer it takes for you to pay back your Direct Loans, the more you will end up paying back in the end.

*Based on a 4 year average, 2013/2014 through 2016/2017.

Late Payments/Defaulting

Making late or no payments on your Direct Loan will negatively impact your credit. Your loan will go into a defaulted status once you are 270 days behind on your loan payments. This action will have serious consequences for you on many levels. There are always options before defaulting.

  • NMU's 2014 - 3 year cohort default rate = 11%
  • NMU's 2013 - 3 year cohort default rate = 9.9%
  • NMU's 2012 - 3 year cohort default rate = 9.6%
  • NMU's 2011 - 3 year cohort default rate = 12.1%

The cohort default rates is the percentage of students that default on their Federal loans within three years of the fiscal year they enter repayment. For tips on how to prevent defaulting on your student loans, please click here.