Loan Programs
Federal Direct Loans
Federal Direct Loans are low-interest loans for students and parents to help pay for the cost of a student’s education after high school. The lender is the U.S. Department of Education. Additional information is available at StudentAid.gov.
The student must be enrolled at least half-time (6 credit hours) and meet general eligibility requirements for the Federal Student Aid programs. More information about these requirements is available through the Loan Entrance Counseling guide.
The types of student Direct Loans are Subsidized Direct Loans and Unsubsidized Direct Loans. Direct Subsidized Loans are for students with demonstrated financial need, as determined by federal regulations. No interest is charged while the student is enrolled at least half-time, during the student’s grace period and during periods of deferment. However, Direct Unsubsidized Loans are not based on financial need and interest is charged during all periods.
Students must complete the Free Application for Federal Student Aid (FAFSA). First-time borrowers at Howard Payne University will be required to complete Entrance Counseling and a Master Promissory Note (MPN). This is normally a one-time requirement. Students will be required to confirm that they want to continue to receive a Direct Loan under the MPN by accepting their loan award.
Beginning July 1, 2026, the One Big Beautiful Act introduces several important changes to the Federal Direct Loan Program.
Undergraduate Students
There are no changes to the annual or aggregate Direct Loan limits for undergraduate students. However, students enrolled less than full-time will receive a prorated loan amount based on their enrollment.
Example:
A student who is eligible to receive $1,750 per semester while enrolled full time, but enrolls in 6 credit hours, will be eligible to receive $875.
The annual Direct Loan limit for graduate students has not changed. However, the aggregate (lifetime) loan limit has been reduced.
Example:
A graduate student who is eligible to receive $10,250 per semester while enrolled full time, but enrolls in 6 credit hours, will be eligible to receive $5,125.
Parent Borrowers (Direct PLUS Loans)
Several significant changes have been made to the Parent PLUS Loan Program.
Example:
If a parent wishes to borrow $30,000 for the academic year, the maximum amount they will be eligible to borrow is $20,000.
In addition, Parent PLUS Loans are now subject to a $65,000 aggregate (lifetime) borrowing limit per student, regardless of how many parents borrow on the student’s behalf.
Federal Direct Student Loan Confirmation Process
If the student is awarded funds from the Federal Direct Loan, these instructions must be read and followed carefully.
First-Time Borrower
- Accept the loan, and
- Complete Entrance Counseling and
- Complete the Direct Student Loan Master Promissory Note (MPN).
Both Entrance Counseling and the completion of the MPN is an on-line process. Additional information and instructions will be included with your Award Notification.
Previous Borrower
The Master Promissory Note (MPN) is a very important contract between the borrower and the lender. The MPN allows borrowers to receive multiple subsidized and/or unsubsidized Federal Direct Student Loans over a ten (10) year period. Each year that the student receives a Federal Direct Student Loan under the MPN, the student is required to confirm that he or she wishes to receive subsequent loans under the MPN by accepting their loan award(s).
Students have the right to reduce or cancel their loan awards at any time by contacting the HPU Financial Aid Office.
Students are required to complete Exit Counseling when dropping below half-time or when enrollment ceases.
Alternative Student Loan Options
Click here to see a list of lenders that HPU students have used in the past. Howard Payne University does not promote any one lender over the other. This is simply a historical lender list.
Direct Parent Loans
Direct Parent (PLUS) Loans are low-interest loans available to parents of dependent students. Interest is charged during all periods. Parents must pass a credit check processed by the Dept. of Education. The student must be enrolled at least half time (6 credit hours). The parent may borrow up to the Cost of Attendance less all other financial aid not to exceed $20,000/year per each student. The interest rate is determined each year by the Dept. of Education. Current interest rates can be found here: https://studentaid.gov/plus-app/ Repayment may begin within 60 days after the second disbursement of the PLUS.
An amount of approximately 4.228% of your loan amount for origination fees will be deducted. The chart below indicates the approximate amount of actual proceeds you will receive from the PLUS loan.
| Amt Borrowed | Less | 4.228% Fees | = | Approx. Net for both Semesters | Approx. Net for one Semester |
| $10,000. | less | $423. | = | $9,577. | $4,788 |
| $7,500 | less | $317. | = | $7,183 | $3,591 |
Parents may apply for a Parent PLUS DIRECT Loan by logging in at StudentAid.gov with the Parent Borrower FSA ID and password. Under “Parent Borrowers”, choose “Apply for A PLUS Loan”. After entering parent’s personal information, choose the appropriate academic year in the drop-down box. Complete the PLUS Pre-Approval section. If the loan is approved, complete the Master Promissory Note by going to Completing a Master Promissory Note | Federal Student Aid. (NOTE: Parents who have already completed an MPN in a previous year do not need to complete another one.)
Federal Direct Parent (Plus) Loan Confirmation Process
The Master Promissory Note (MPN) is a very important contract between the borrower and the lender. The MPN allows borrowers to receive multiple Federal Direct Parent (PLUS) Loans over a ten (10) year period. After an MPN is submitted to the Department of Education, the parent is not required to complete a new MPN while the dependent student attends Howard Payne University.
A parent will be defined as a “Previous Borrower” if all of the following conditions are met:
- Previously borrowed from the Federal Direct Parent Loan for the student enrolled at HPU, and
- Has a valid promissory note on file with the Dept. of Education as the lender.A credit approval process must be completed each academic year.
If the parent needs a Parent Loan to finance another dependent student’s education, the parent must complete a separate MPN. The parent has the right to request a new MPN any time the parent borrows.
Keep track of how much you are borrowing
Keep good records. Repaying your student loans is a serious matter and it’s important to keep accurate records of how much you are borrowing. You can check on your student loan information by logging in at studentaid.gov/fsa-id/sign-in/landing.
Student Loan Ombudsman
If you have been unable to solve a problem with your federal student loan, you can ask the Federal Student Aid Ombudsman Group for help. The Federal Student Aid Ombudsman Group of the U.S. Department of Education is dedicated to helping resolve disputes related to Direct Loans, Federal Family Education Loan (FFEL) Program loans, Guaranteed Student Loans, and Perkins Loans. The Ombudsman Group is a neutral, informal, and confidential resource to help resolve disputes about your federal student loans.
Please use the following information to contact the FSA Student Loan Ombudsman Group.
Via on-line assistance: https://studentaid.gov/feedback-ombudsman/disputes/prepare
Via telephone: 877-557-2575
Via Fax: 606-396-4821
Via Mail: FSA Ombudsman Group
P. O. Box 1843
Monticello, KY 42633
Contact the Ombudsman Group as a last resort. Make every effort to resolve your student loan problems before contacting the Ombudsman Group.