Direct Loans

There are many changes in the student loan industry for the upcoming award year.

  • Beginning with the 2012–13 academic year (July 1, 2012 to June 30, 2013), all graduate/professional students will no longer be eligible for the interest subsidy that had been afforded to them when it comes to the Subsidized Loan^. The subsidized loan will revert to an unsubsidized loan, where interest starts to accrue while a student is in school. The total amount you can borrow will remain the same.
  • After July 1, 2012, the rebate fee is no longer an incentive. What does this mean? Example: In 2011–12, the origination fee on the sub/unsub loans was 1%; however, the federal government, reduced that fee by .5%, which was titled a rebate fee, making the origination fee .5%. That incentive will no longer be offered on loans originated after July 1, 2012.


If your academic loan period begins before July 1, 2012, your award package will include the subsidized loan; however, after July 1, 2012, all students will lose the rebate incentive, regardless of loan periods.

Switching to Direct Loans will provide the following benefits:

  • Eliminates the complexity of using multiple lender systems
  • Eliminates the uncertainty of losing lenders and being out of compliance with federal regulations
  • Eliminates the need for reprocessing loans for students when lenders leave the program
  • Gives the seminary control over the creation and timing of loans
  • Gives the seminary control over the disbursement of funds
  • Provides one lender and one payment for new borrowers
  • Allows returning borrowers to consolidate FFELP loans with their Direct Loans at repayment
  • Provides a lower interest rate on the Grad PLUS loan
  • Offers five repayment options for students
  • Interest rate reductions for on-time payments
  • Allows students to participate in the Public Service Loan Forgiveness Program


To complete your Master Promissory Note for the Federal Direct unsubsidized Loans and for the Graduate PLUS Loan, click here. Loan funds cannot be disbursed without a completed MPN or entrance counseling (required for first-time borrowers at Meharry Medical College).

Frequently Asked Questions

Learn a little more about applying for direct student loans.

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