Direct Stafford Loans

The William D. Ford Federal Direct Loan Program provides low-interest loans to help eligible students cover the costs of higher education. Eligible students borrow directly from the U.S. Department of Education, and loans are either subsidized or unsubsidized.

  • Direct Subsidized Loans are based on financial need. Wake Tech reviews a student's Free Application for Federal Student Aid (FAFSA) and determines how much the student can borrow. Students are not charged interest on their loans while they remain in school at least half-time or during grace and deferment periods.
  • Direct Unsubsidized Loans are not based on financial need, but Wake Tech will determine how much a student can borrow. Interest accrues on the loan from the time it is first paid out. Students can pay the interest while in school and during grace and deferment periods, or they can allow the interest to accrue and be added to what they owe. Allowing the interest to accrue will increase the total amount they eventually have to repay.
  • Parents of dependent students can use a Direct PLUS Loan to borrow money to help pay for their children's education. Parents should complete the FAFSA and all follow-up paperwork and then download Wake Tech's Parent PLUS Loan request form and return the completed form to the Financial Aid Office.

There is a limit on how much a student may borrow both in a single academic year and overall. Wake Tech will determine how much you can borrow and the types of loans, depending on your year in school, whether you are a dependent student or not, your financial need and other factors. For example, you may be eligible for both subsidized and unsubsidized loans, provided you do not exceed the combined annual limits for both kinds of loans.

Year in school
Dependent students*
Independent students
First year (fewer than 30 hours earned in current program)
No more than $3,500 in subsidized loans
No more than $3,500 in subsidized loans
Second year (30 or more hours earned in current program)
No more than $4,500 subsidized loans
No more than $4,500 in subsidized loans
Maximum total debt from Stafford Loans during college career
No more than $23,000 in subsidized loans
No more than $23,000 in subsidized loans

*Dependent students whose parents cannot obtain a PLUS Loan have the same limits as independent students.

When students review their financial aid package in Self-Service, they will have to accept or reject each loan individually electronically.

For any accepted loans, the student will go through an entrance counseling session provided by the federal government and must complete and sign a Master Promissory Note. The online counseling session, which is about 30 minutes long, is required of first-time borrowers and includes information about loans and student rights and responsibilities. The Master Promissory Note can be completed online, with Wake Tech designated as the institution. Allow three to five business days for electronic confirmation of the transaction.

Wake Tech also requires all student loan recipients to complete a Financial Literacy course, which offers helpful advice about when to take out a loan, how to manage repayment and how to budget.

Disbursement of loan funds

Students will be paid through Wake Tech in two or more installments – no single Stafford loan installment may exceed one-half of the loan amount – to pay for tuition and fees and other school charges. Students must be enrolled and actively attending at least six credit hours at the time loan funds are disbursed. Students are limited to one academic year of loans for the completion of transitional courses.

Interest rates

The government adjusts the interest rate on Direct Stafford Loans on July 1 every year, but the rate does not exceed 8.25 percent. Students are notified any time the rate changes. All Direct Loans also include an origination fee that is deducted from the total loan amount before disbursement.

Forgivable Education Loans for Service

State lawmakers created the Forgivable Education Loans for Service program to provide financial assistance to qualified students who are committed to working in fields designated as critical employment shortage professions in North Carolina. Students must be North Carolina residents and meet certain requirements, such as signing a promissory note requiring them to seek loan forgiveness through employment in an approved position or repay the loan in cash. Generally, a loan for one academic year will be forgiven for one year of full-time employment.

Private loans

In addition to government-backed loans, students can also borrow money from banks and other private lenders. Wake Tech offers interactive tools to guide students through the borrowing and repayment processes for these types of loans.

Repaying loans

Repayment of federal student loans begins six months after graduation or after dropping below half-time enrollment. Various repayment plan options are available. Loan consolidation would mean making a single payment each month instead of multiple ones, possibly to different lenders.

Direct Loan recipients are required to complete an exit counseling session, which includes a review of the terms and conditions of their loan(s) and the repayment process. The Financial Aid Office can provide more information.

All loans by students or their parents are submitted to the National Student Loan Database System and can be accessed by guaranty agencies, lenders and schools determined to be authorized users of the system.

Student debt relief

Federal Student Aid and President Joe Biden's administration have launched a program to forgive up to $20,000 in student debt for prior Pell Grant recipients and up to $10,000 for all other student loan borrowers.

A simple online application for the program is available. To be eligible, a borrower's annual income must be below $125,000 for individuals and $250,000 for married couples or heads of households. Borrowers can view their loan balances and check their Pell Grant status by logging into their Federal Student Aid account online.

The Federal Student Aid site also provides the most up-to-date information on the debt relief program, as well as on one-time debt relief.

If you would like to be notified by the Department of Education when the application is open, please sign up at the department's subscription page.