Understanding Loan Responsibilities

Binghamton University participates in the Federal Direct Loan Program (also known as Direct or Stafford Loans). Direct Loans are offered after submitting a FAFSA application. Students have the ability to refuse all or borrow less than the maximum student loan amount offered. The student is responsible to repay their loans even if they do not complete their degree/program. Because the student is legally obligated to repay their loans, we encourage both students and parents to fully read and understand the terms and conditions before accepting a loan.

Federal Direct Subsidized Loan

  • Available to Undergraduate students only
  • Need based, as determined by the FAFSA
  • 5.50% interest rate, effective July 1, 2023 
    • Interest does not accrue until repayment begins as long as student is enrolled for 6 or more credits.
  • Must be enrolled in at least 6 credits each semester to be eligible
  • Loan repayment begins 6 months after graduation or less than 6 credit enrollment  
  • Flexible repayment plans
  • Origination fee: 
    • Loans disbursed on or after October 1, 2020 through October 1, 2024 will have a loan origination fee of 1.057%

Federal Direct Unsubsidized Loan

  • Available to both Undergraduate and Graduate students
  • Non-need based, as determined by the FAFSA
  • Undergraduate students:  5.50% interest rate, beginning July 1, 2023
    • Must be enrolled in at least 6 credits each semester to be eligible  
  • Graduate students:  7.05% interest rate, beginning July 1, 2023
    • Must be enrolled in at least 3 credits each semester to be eligible 
  • Interest begins to accrue at time of disbursement
  • Loan repayment begins 6 months after graduation or less than 3 credit enrollment   
  • Flexible repayment plans
  • Origination fee:
    • Loans disbursed on or after October 1, 2020 through October 1, 2024 will have a loan origination fee of 1.057%

Also learn about the Nursing Loan and Private Loans.

When a student accepts a loan

When a student accepts a loan for the first-time on BU BRAIN, Financial Aid tab, they will be required to complete online (1) Entrance Counseling, and (2) an  MPN for Subsidized/Unsubsidized Loans. It is very important that the student themselves complete these requirements.

1. Entrance Counseling - Before federal loans can be credited to the student's semester bill, the federal government requires the student to complete Entrance Counseling to ensure that they understand the responsibilities and obligations they are assuming. This online module takes about 20-30 minutes to complete, and requires students to read and answer questions about "Understanding their Loans," "Managing Their Spending," "Plan to Repay," "Avoid Default," and "Making Finances a Priority."

2. MPN for Subsidized/Unsubsidized Loans - Students who borrow in the Federal Direct Loan program(s) must complete an MPN, which remains in effect throughout the student's college career (for up to 10 years). The MPN is a legal document in which the student promises to repay your loan(s) and any accrued interest and fees to the U.S. Department of Education. This procedure eliminates the need to complete subsequent promissory notes each award year.

Attention Parents: Helping your student understand loan responsibilities

Student loans are low-interest and are designed to help pay costs for educational costs such as tuition/fees, living expenses and books. It is important to educate your student about their loans including interest rates, budgeting and loan repayment and general fiscal responsibility in funding their college experience.

Upon disbursement of your student's Federal Direct Loan, the Department of Education will assign your student to a Federal Loan servicer. The servicer will contact them directly via email and/or mail to provide loan disbursement information including interest rates, origination fees and other information about paying their loan back. Questions about repayment or the bill should be directed to your Federal Loan servicer.

Helping your student track their loans

Students and parents with Proxy Access, can view award/loan history in BU BRAIN, Financial Aid tab, select Award, click on Award History.

Students are encouraged to use the tools and resources their servicer provides as well as the National Student Loan Data System (NSLDS) to help keep track of all their federal loan borrowing history throughout their college years. The NSLDS is a central database maintained by the Department of Education to monitor all Federal-aid received for a student including loans.

Still have questions?

Our office is here to help answer any questions you or your student may have about loans. Our website offers resources and information about loan borrowing and other financial aid options.