Direct Student Loan Program

William D. Ford Federal Direct Student Loan Program

The Program

Hampshire College participates in the William D. Ford Federal Direct Loan Program. Students obtain their loans through Hampshire College by completing the Free Application for Federal Student Aid (FAFSA®). 

Federal Direct student loans are in the student's name only. The student borrower is solely responsible for the repayment of the loan. Loan funds are applied to the student's college bill. We receive one half of the loan less the loan fee for the fall term and the other half less the loan fee for the spring term. Repayment begins six months after the student leaves school, graduates, or changes enrollment to less than half-time. Students are responsible for notifying their loan servicer of any name, address, or phone changes. Students in repayment should contact their loan servicer if they are experiencing any financial problems that may affect their ability to make timely monthly payments.

Total annual Direct loan amounts cannot exceed the following limits for undergraduate students:

  • $5,500 for a first-year student;
  • $6,500 for the second year; and
  • $7,500 for each subsequent undergraduate year. 

The total aggregate amount of all debt, including both subsidized and unsubsidized loans, is $31,000 for undergraduate students. No more than $23,000 of these loans may be subsidized. 

Borrowers will receive a disclosure statement from the Loan Origination Center (LOC) listing the amount borrowed, interest rate, type of loan, fees, and rebate amounts. This document is sent to the borrower's home address and should be kept for future reference.

FAQs & Important Information

  • 1) Hampshire College students who are U.S. citizens or eligible non-citizens (green card holders) can complete the FAFSA® form. The FAFSA® is the Free Application for Federal Student Aid, including the Direct student loan.

    2) Once the financial aid office receives your FAFSA® and notice that you have been accepted to Hampshire, they will create your financial aid offer. The financial aid office will determine if the student qualifies for the subsidized or unsubsidized loan, or if the loan will be partially subsidized and unsubsidized. We use a calculation to determine the type of loan: Cost of Attendance (COA) less the Student Aid Index (SAI) less the amount of your other financial aid (grants, scholarships, work study), but not including other loans. 

    The result of this calculation will determine the type of Direct loan. For example, if the COA is $65,000, the SAI is 35,000, and the other financial aid totals $24,500 the calculation is as follows:  $65,000 - 35,000 - $24,500 = $5500. This means that a first-year student with this calculation would be able to borrow the maximum $3,500 in a subsidized loan and $2,000 in the unsubsidized loan, a second-year student may borrow up to $4,500 in a subsidized loan and $1,000 in an unsubsidized loan, and a third and fourth-year student may borrow the maximum subsidized loan up to $5,500. 

    If the resulting calculation is less than the maximum amount, then the student would only be eligible to borrow that amount.

    3) Once you receive your financial aid offer you will be given instructions on how to accept your offer including loans. The loan counselor needs to know the amount you want to borrow if it I less than the full amount stated on your offer letter. Send your request by email to from your Hampshire email account.

    4) If your FAFSA® is selected for the verification process, we will need all additional required documents from you before we can process your loan request.

    5) You will also need to complete the loan entrance counseling requirement and the Master Promissory Note. You need to complete these before we can disburse your loan funds onto your student bill. These two requirements are completed only once while at Hampshire.

  • There are two types of Direct student loans: subsidized and unsubsidized.

    Students who qualify for a subsidized Direct loan are not charged interest while enrolled in college and during the six-month grace period, and during deferments. Students must demonstrate need for this loan by completing the Free Application for Federal Student Aid (FAFSA®).

    The unsubsidized Direct loan does have interest accruing during the time the student is in school and thereafter. The unsubsidized Direct loan is available to students who do not qualify for the subsidized Direct loan. Students apply for the non-need-based unsubsidized Direct loan by completing the (FAFSA®). This loan is available to all students regardless of need. Annual loan limits are the same, less any subsidized Direct loans borrowed.

    Interest is charged on an unsubsidized Direct loan from the time Hampshire receives the funds. Only payments on the principal are deferred until six months after the student ceases to be enrolled at least half-time. Students receive an interest-only bill every six months; students may pay all, some, or none of the accumulated interest. Any unpaid interest will be added to the amount borrowed (interest capitalization). This capitalization will result in higher monthly payments later. We recommend that students pay the interest while enrolled, if possible.

    If a parent is denied a federal PLUS loan, the student borrower becomes eligible for an additional federal loan in the form of an unsubsidized Direct loan. The additional unsubsidized loan is in the student's name only. First- and second-year students may borrow up to an additional $4,000 for the year; others may borrow up to an additional $5,000 for the year. Students would need to request this additional loan by sending an email to the loan counselor from their Hampshire email accounts.

  • Subsidized and Unsubsidized Direct student loans borrowed on or after July 1, 2023 through June 30, 2024 have a fixed interest rate of 5.50%. Subsidized Direct student loans are NOT charged interest during the in-school deferment periods.

    Interest rates are typically updated in June for the following academic year.

  • Federal Direct loans (student and parent) are serviced by several servicing centers (servicers) located throughout the country. These centers process name and address changes; manage the various repayment plans; monitor deferment and forbearance requests; update accounts with payments and charges; and send out monthly bills. Borrowers having trouble making their monthly payments should contact their servicer to see if they are eligible for a deferment or forbearance, or to change their repayment plan.

    Borrowers are assigned to one of several servicers. For more information about loan servicers and to determine who services your loan visit

  • The Direct student loan has an origination fee equal to approximately one percent of the amount borrowed. The fee is deducted from the loan funds the College receives. The loan fee is kept by the U.S. Department of Education.   

    The origination fee percentage for all Direct Subsidized and Unsubsidized loans first disbursed on or after Oct. 1, 2020, is 1.057%. Loans first disbursed before that date had different loan fees.

  • When you are ready to begin repayment of your Direct student loans, you may choose from several repayment plan options. To review and compare the options visit

    If a repayment plan is not chosen by the borrower, the borrower will be placed in the standard repayment plan. Borrowers may change repayment plans at any time with certain restrictions. Borrowers may prepay all or part of the unpaid balance of a Direct loan at any time without penalty. See the repayment tips section for instructions on paying down loan principal.

  • Deferments and forbearances are temporary postponements of monthly loan payments for specified periods of time.

    Examples of deferments include: pursuing at least half-time study at an eligible school; studying in a graduate fellowship program (including study outside the U.S.); enrollment in a rehabilitation training program for the disabled; seeking but unable to find full-time employment; or suffering from an economic hardship. Interest is not charged during a deferment on subsidized Direct student loans.

    Examples of forbearances include: inability to make loan payments due to poor health or other acceptable reason; serving in a medical or dental internship or residency; or, serving in a position under the National and Community Service Trust Act of 1993, including AmeriCorps. A general forbearance is often used to cover a reason not listed above. A general forbearance may also be used to request reduced monthly payments. During a forbearance, interest is charged on subsidized and unsubsidized Direct student loans.

    Requests for deferment or forbearance should be directed to your loan servicer. Check their website to see if you may print these forms or apply online.

    Visit for more information on deferments and forbearance options.

  • There are several federal student loan forgiveness, or cancellation, programs available to Direct student loan borrowers. Click here for more information.

    Loan forgiveness may be available to teachers, government employees, nonprofit employees, nurses, doctors, or other medical professionals that work for nonprofit organizations. Those individuals that have a disability may have loan forgiveness options. Each category has its own qualifying criteria.

    If you complete an AmeriCorps program, you may qualify for a National Service Education Award of approximately $5,815 for one year of service. This award can be used to reduce your Direct loan debt. Your loans can be placed in forbearance while you work for AmeriCorps, so your payments will be postponed, but interest will be charged.

    If you work for AmeriCorps before or while attending Hampshire, you may want to consider using the award towards your Hampshire College tuition bill. Hampshire College will match the award in a grant, thus reducing your current costs. Click here for more information about this option.

  • If you are late making your Direct loan monthly payments, your loan will be considered to be delinquent. Delinquencies on your Direct loan payments are reported to national credit bureaus after being 60 days late. After 240 days of being delinquent, the entire loan, including interest, becomes due immediately and in full. Loan default occurs after one is 270 days late. Having defaulted on your loan means that you have abandoned your responsibility to repay the loan.

    The consequences of loan default are severe: 

     - you will become ineligible for additional federal aid including grants and student loans, and state-based assistance;

    - you will become ineligible for other student loan benefits such as a deferment or forbearance;

    - Hampshire College will not provide you or others official copies of your college transcript;

    - it will severely damage your credit rating, making it more difficult to obtain affordable credit in the future, including credit cards, a car loan, or a mortgage;

    - defaults are reported to national credit bureaus and can remain on your credit report for seven years;

    - more employers and rental agencies are requiring credit checks before hiring or leasing, so your ability to obtain certain types of employment or living situations may be affected;

    - your federal tax refunds may be withheld and applied to your outstanding loan balance;

    - your savings and checking accounts may be seized to pay your outstanding debt;

    - your loan may be assigned to the U.S. Department of Education Collection service;

    - you will have to pay additional fees and court costs for the collecting of your loan;

    - your employer could be ordered to withhold or garnish a portion of your wages, up to 10%;

    - if you need a license to practice in your profession, it may be revoked, canceled, or not renewed;

    - there is no statute of limitations, which means your obligation to repay federal loans will never go away.

    There is no reason ever to default on your federal student loans. If you find that you are having difficulty making payments you should call your loan servicer immediately. Ask about a deferment or a forbearance, or change your repayment plan. Refer to the Tips to prevent loan default section for more information.

  • The Ombudsman Group is dedicated to helping resolve complaints related to the federal student aid programs, including Direct Loans, Federal Family Education Loan (FFEL) Program loans, Perkins Loans, and grant programs.

    If you’ve submitted a complaint to your loan servicer and you believe the answer you received is wrong or incomplete, you may need to contact the Federal Student Aid (FSA) Ombudsman Group of the U.S. Department of Education (ED). The Ombudsman Group is a neutral, informal, and confidential resource to help resolve complaints about your federal student aid.

    Federal loan borrowers may contact the Federal Student Aid (FSA) ombudsperson to informally settle disputes and problems with their federal student loans. The ombudsperson can help borrowers having problems with the following loans:

    1) Subsidized and Unsubsidized Direct Student Loans;

    2) Direct PLUS Loans;

    3) Federal Family Education Loans (FFEL) including PLUS Loans (for parents) and Subsidized and Unsubsidized Stafford Loans;

    4) Guaranteed Student Loans (GSL);

    5) SLS Loans; and

    6) Perkins Loans.

    We hope you will never have a reason to use this service, but please contact the ombudsperson's office if you need help. The service is free of charge.

    The ombudsperson may be contacted by: 

    Call 800-433-3243, submit a complaint online, or send correspondence to: 

    U.S. Department of Education
    FSA Ombudsman
    P.O. Box 1854
    Monticello, KY 42633