Opening my college financial aid award letter was a defining moment. That single document contained the answer to my family’s ability to afford my college education. My parents and I gathered around the kitchen table to evaluate the information.

By the time we reached the bottom of the letter it was clear that we needed to ask questions to fully understand the items listed in the financial aid package. Loans, in particular, can make families nervous and prompt the most questions.

To help you, review the answers to some of the most popular questions about the Federal Direct Loan Program:award_letter

Q: Loans show up on my award letter; does that mean I need to borrow those exact amounts?

A: Not necessarily. One way to find the answer is to look at the cost of attendance (COA), which is the amount the college expects you to pay for tuition and fees, room and board, books and supplies, and personal and travel expenses for one year. From that figure, subtract any gift aid (grants, college and external scholarships) awarded. You may also subtract any funds you have saved and anticipate to use for that academic year. If there is a remaining balance, that’s the amount that must be covered through other avenues not mentioned above, such as loans.

Please note that the COA is only an estimate. For instance, you may find that you don’t plan to spend as much on personal and travel expenses as was budgeted by the college. Once an invoice has been issued by the college, a month or more before the academic year starts, you will be able to more accurately decide how much you need to borrow for the upcoming academic year.

Q: I did the calculations and I will need to borrow loans; how do I borrow? 

A: If you are a first-time borrower, complete a Master Promissory Note and Entrance Loan Counseling at You will also need to approve the loan amounts under the financial aid section of your college’s online student account. Some families will accept grants and scholarships by the specified deadlines and wait to accept or decline loans until they have an invoice.

Q: What if I have not been offered enough student loans to cover the cost of education?

A: Dependent freshmen students qualify for $5,500 in federal student loans, sophomores qualify for $6,500, and juniors and seniors qualify for $7,500, respectively. If that’s not enough to pay your school’s invoice, your parents may need to look at borrowing a Direct PLUS loan or alternative loans beyond the Federal Direct Loan Program.

Q: Will I be required to start making monthly payments as soon as the loan is disbursed?

A: No. Loan payments begin 6 months after graduation or when you fall below half-time status. While interest is not accruing on a Direct Subsidized Loan while you are in school, a Direct Unsubsidized Loan is accruing interest while you are in school. Colleges determine the type of loans that are awarded. You may consider making monthly interest payments on unsubsidized loans while in school by looking up your servicer at and creating an online account on the specific servicer’s website.

Q: Is there a way to track how much money I have borrowed in federal student loans?

A: For a history of your student loan debt, visit

If you are wanting more information about loans, read on! Have a question about loans that wasn’t answered above? Comment below!