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federal loans

Applying for Aid

At Alabama State University, applying for financial aid begins with filling out your free application for federal student aid (FAFSA).

Types of Loans

Currently, the system does not allow the Office of Financial Aid to be notified when a PLUS loan (Parent PLUS or Graduate PLUS) has been completed. Students are obligated to notify our office when the application has been completed in order for the loan to be processed.

Students must be at least half-time (6 hrs) to receive loans.

Subsidized Loans

Direct Subsidized loans are available ONLY to undergraduate students with financial need. The U.S. Department of Education pays the interest on a Direct Subsidized loan

  • while you’re in school at least half-time,
  • for the first six months after you leave school (referred to as a grace period*)
  • during a period of deferment (a postponement of loan payments).

Unsubsidized Loan

Direct Unsubsidized loans are available to undergraduate and graduate students. There is no requirement to demonstrate financial need. You are responsible for paying the interest on a Direct Unsubsidized loan during all periods. If you chose not to pay the interest while you are in school and during grace periods and deferment or forbearance periods, your interest will accumulate and be capitalized.

The amount of loans a student can receive is based on the year of study. 

  • 1st year freshman (1-31 hours) Subsidized - $3,500 Unsubsidized - $2,000 
  • 2nd year sophomore (32 - 62 Hours) Subsidized - $4,500 Unsubsidized – $2,000 
  • 3rd & 4th year (63- 120 Hours) Subsidized- $5,500 Unsubsidized – $2,000 
  • 5th Year (121- 180 Hours) Subsidized- $5,500 Unsubsidized - $2,000 

Parent Plus Loan

This is a non-need-based loan available to dependent students’ parents to help with the direct and indirect costs of attending a university. Parents can complete the parent plus loan application at The student MUST notify the Office of Financial Aid if the loan application is denied. If a parent is denied a Parent Plus loan, they can receive an additional unsubsidized loan. Freshmen and sophomores can receive additional unsubsidized loan in the amount of $4,000 for the year. Juniors and seniors will receive an additional unsubsidized loan in the amount of $5,000 for the year.

Graduate Students - $20,500 per year in an unsubsidized loan

Required Items for Loan Funding Process

After a student has selected a lender, he/she may then complete a master promissory note (MPN). Listed below are some key items required for proper loan funding process:

  • FSA ID Website
    An FSA ID is combination of a username and password and is required in order to e-sign your Federal Direct Loan MPN and other federal student aid documents.
  • Master Promissory Note
    A Direct MPN is required of all new and current borrowers.
  • Entrance Counseling
    Federal Direct Entrance Counseling is required for new borrowers who have not already completed an entrance counseling session.
  • Exit Counseling
    Federal Direct Exit Counseling is required prior to graduating or leaving Alabama State University; borrowers are required to complete an exit counseling session.
  • Loan Consolidation
    Consolidate your FFELP loans with your Federal Direct Loans when you graduate if desired.

Pros & Cons of Consolidation

A Consolidation Loan can lower the borrower's total monthly repayment and simply loan repayment. Because the repayment period for the Consolidated Loans is often longer than for most Stafford Loans, the monthly payments may be lower.(On the other hand), the total interest that is paid over the longer repayment period is usually greater.) If the borrower has more than one loan, a Consolidation Loan simplifies repayment because there's only one lender and one monthly payment. Consolidation may be an option for a borrower in default, if certain conditions are met. The borrower should also be aware that some deferments and other benefits available with his/her current loans (especially Perkins) may be lost through consolidation.