Undergraduate Financial Aid

The program offers students the chance to borrow while enrolled at least half-time at an eligible institution. The student is the borrower on a Direct Subsidized or Unsubsidized Loan. The maximum annual amount that you may borrow under the Federal Direct Loan program depends on your degree program, class level and dependency status.

¹maximum of $3,500 subsidized
²maximum of $4,500 subsidized
³maximum of $5,500 subsidized

Federal Direct Loans for undergraduates will have a fixed interest rate. The interest on a subsidized loan will be paid for by the federal government until the loan enters the grace period. Unsubsidized loan interest will begin to accrue upon disbursement and will be capitalized onto the principal balance at repayment unless paid by the borrower during the in-school and grace period. Find current rates on studentaid.gov.

The U.S. Department of Education will retain an origination fee on any loan disbursement, which is a percentage of the principal loan amount. Therefore, be sure to account for this when determining the amount to borrow. Find current fees on studentaid.gov.

Repayment begins six (6) months after the student graduates, leaves school, or drops below half-time status. The amount of each payment depends on the size of your debt and on the length of your repayment period (usually ten-years). You can estimate your repayment using the repayment calculator at studentaid.gov.

Generally, the total combined debt you can have outstanding from all Direct Subsidized and Unsubsidized loans is:

• $31,000 as a dependent, undergraduate student (of which no more than $23,000 can be subsidized)
• $57,500 as an independent, undergraduate student or certification student (of which no more than $23,000 can be subsidized)

As a result of legislation enacted in July 2012, eligibility for the interest subsidy will be limited for new borrowers on or after July 1, 2013. The law restricts the period of time for which a borrower may receive subsidized loans, in the aggregate, to 150 percent of the published length of the student’s current educational program. Once the student reaches that limit, he or she may borrow only unsubsidized loans, and interest begins to accrue on the student’s outstanding subsidized loan.

In order for your loan to be originated, you must first officially accept your loan offer online or by calling the office. We recommend you do this before the end of June so the loan(s) appear on your first billing statement as anticipated aid. You may also choose to reduce or decline your loan by making the appropriate changes online or by calling the office. Only those loans which have been accepted will be originated.

• If you have no prior borrowing history:
  Once your loan has been originated, first-time borrowers will be notified via email to complete the online Master Promissory Note (MPN) process and the federally mandated student loan Entrance Counseling session. Once these items are complete, the Department will disburse the loan funds directly to the university at the start of each term.
• If you have borrowed before under the DL program, but are new to UD:
  Once your loan has been originated, first-time borrowers will be notified via email to complete federally mandated student loan Entrance Counseling session. Once this is complete, the Department will disburse the loan funds directly to the university at the start of each term.
• All borrowers (current or new):
  Complete an Annual Student Loan Acknowledgment each year you accept a federal student loan.
  If this is your first time accepting a federal student loan, you are acknowledging that you understand your responsibility to repay your loan.
  If you have existing federal student loans, you are acknowledging that you understand how much you owe and how much more you can borrow.

The Master Promissory Note (MPN) is a legal document that, when completed, acknowledges your promise to repay your loan(s) and any accrued interest and fees to the Department. It also explains the terms and conditions of your loan(s). All first-time borrowers in the DL program must complete an MPN.

To complete an MPN online, you will be required to use your Federal Student Aid ID (used to file the FAFSA). In most cases, once you've submitted the MPN and it's been accepted, you won't have to fill out a new MPN for future loans you receive. You can borrow additional Direct Loans on a single MPN for up to 10 years. You'll receive a disclosure statement that gives you specific information about any loan that the school plans to disburse under your MPN, including the loan amount, fees, and the expected disbursement dates and amounts.

When you sign a promissory note, you are agreeing to repay the loan according to the terms of the note. The note is a binding legal document and states that (except in cases of discharge) you must repay the loan — even if you do not complete your education, aren’t able to get a job after you complete the program, or are dissatisfied with, or don’t receive, the education for which you paid.

If you apply for deferment or forbearance, you still must continue to make payments until you are notified that the request has been granted. If you do not, you may end up in default. You should keep a copy of any request form you submit, and you should document all contacts with the organization that holds your loan.

You must notify the appropriate representative (school, agency, lender) that manages your loan when you graduate, withdraw from school, or drop below half-time status; change your name, address, or social security number; or transfer to another school. Additionally, you must complete Exit Counseling before you leave the school. This counseling session will be completed online and will provide you with important information about your loan and repayment responsibilities.

To be eligible to apply for a Direct PLUS Loan:

• The student must be a FAFSA filer.
• 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 a school that participates in the Direct Loan Program. 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 (credit check will be performed). 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, and must meet other general eligibility requirements for the federal student aid programs.

The U.S. Department of Education must have a valid Master Promissory Note (MPN) on file in order to disburse the loan funds to the university.

Approved parent borrowers must complete an MPN for each student for whom they are borrowing.

The MPN is a legal document in which the borrower promises to repay the loan and any accrued interest and fees. It also explains the terms and conditions of the loan. In most cases, the MPN can be used to disburse approved loans during the student’s entire undergraduate enrollment. However, the borrower must complete a new loan request for each school year.

There are new loan limits for the Parent PLUS Loan program beginning July 1, 2026.

• $20,000 per dependent student, per year (annual limit).
• $65,000 per dependent student, in total (aggregate limit).
• Only new undergraduate student borrowers are subject to these limits.
• Previous legacy borrowers are any students enrolled at UD as an undergraduate student who has borrowed any federal loan prior to July 1, 2026.
• This legacy condition for previous borrowers remains in effect for three academic years or until the student graduates or ceases enrollment.
• Current borrowers meeting the legacy provision are only eligible for this for a limited period of time (usually no more than 3 years). If your program enrollment extends beyond the allowable "legacy" window of 3 years, you will be subject to the new annual and lifetime loan limits.

Examples

• You have received federal loans for the past two years (prior to July 1, 2026) and change your major at UD. In this case, you are considered a legacy borrower.
• You have received federal loans for the past two years (prior to July 1, 2026) as an undergraduate and now enroll as a graduate MBA student. In this case, you are considered a new borrower.
• You received federal loans last year at another institution and transferred to the University of Dayton to continue your undergraduate degree. In this case, you are considered a new borrower.

Planning Annual PLUS Borrowing to Ensure Continued Access

On the Parent PLUS Loan application, parents should only select the "maximum amount" option if they wish to borrow the full $20,000 for the year. To ensure adequate Parent PLUS Loan eligibility for the duration of the student's undergraduate program, parents should request a lesser amount on the application. For example, request $16,250 per year for total (aggregate) eligibility to be split equally for a four-year program.

Importance of Planning Accordingly

The new aggregate limit of $65,000 means that borrowing the annual maximum for a four-year undergraduate program will cause parents to reach the aggregate limit before the student completes their degree, leaving them without further access to the Parent PLUS Loan.

What if a Parent PLUS Loan borrower needs more than the annual borrowing limit, or reaches the aggregate limit before the student graduates?

Discuss other financing options with the financial aid office, such as external scholarships, payment plans, institutional loans or private loans.

PLUS Loans have a fixed interest rate. Interest is charged from the date of the first disbursement until the loan is paid in full. Find current rates at studentaid.gov.

The U.S. Department of Education will retain an origination fee on the loan disbursement, which is a percentage of the principal loan amount. Therefore, be sure to account for this when determining the amount to borrow. Find current fees at studentaid.gov.

The Department will send the loan funds directly to the University of Dayton.

Loans approved for the academic year will be disbursed in two equal amounts at the beginning of each semester following federal regulations. The school will use the loan funds first to pay the student's tuition, fees, room and board, and other school charges.

If any loan funds remain, the student will receive the amount as a check or direct deposit via E-Refund. Any remaining loan funds must be used for the student's education expenses.

The repayment period for a Direct PLUS Loan typically begins at the time the PLUS loan is fully disbursed with the first payment coming due within 60 days after that final disbursement. However, the parent may now choose to defer repayment while the student on whose behalf the parent borrowed the loan is enrolled on at least a half-time basis and for an additional six months after the student ceases to be enrolled at least half-time. Remember that interest will be accruing during these times of deferment. Payment options will be presented during the MPN process.

More detailed Federal Direct PLUS Loan information can be found at studentaid.gov.

*Only eligible for ICR if consolidated into Direct Consolidation Loan prior to July 1, 2026.
**Only the 10-year standard plan and ICR are eligible for forgiveness/cancellation options.

A PLUS loan request should not be completed for the upcoming academic year until mid-May. If you plan to use the loan for the full academic year (fall and spring terms), we encourage you to apply for the full year amount (August – May) upon initial request. Adjustments can always be made during the loan period if needed. Be sure to select the correct award year when completing the request.

Please wait until May 1 to submit a new PLUS Loan application. We do not begin our loan processing cycle until late May-early June for the upcoming academic year. If needed, contact a financial aid counselor to help you determine the amount of loan needed to cover your student’s charges/expenses. Remember the origination fee will result in a lowered net amount.

Steps to apply for the loan:

1. The parent borrower will sign in to the federal student loan website (studentaid.gov) using his/her own Federal Student Aid ID. Do not use the student’s information to sign in.
2. Once logged in, you may be asked to review your account information and accept terms.
3. At the top of the page, select Apply for Aid, then select Apply for a Parent PLUS Loan.
4. Select Start under Apply for a PLUS Loan.
5. Select the correct aid year and complete each section accurately, then submit the request. Be mindful to enter your student’s information in the Student Information section.
6. If approved, you will need to complete the Master Promissory Note (MPN).
7. If denied, you can choose to appeal the decision or seek an endorser. The options will be presented to you at the time of the decision and are handled on the studentaid.gov site. If you obtain an endorser or successfully appeal, you will need to complete Credit Counseling.
   • A third option is for your student to access the additional unsubsidized funds available due to Parent PLUS denial. Please contact our office for more information.
8. Every year, all borrowers (new or current) will need to complete the Annual Student Loan Acknowledgment.