Direct Loans

Direct Loans

You’re not alone when it comes to student loans. 

A-B Tech has partnered with Inceptia, a division of National Student Loan Program (NSLP), to provide you with FREE assistance on your Federal student loan obligations to ensure successful, and comfortable, loan repayment. Inceptia’s friendly customer representatives may reach out to you during your grace period to answer questions you have about your loan obligation and/or repayment options. They may also contact you if your loan(s) become delinquent. Inceptia is not a collection agency. We’ve partnered with them to help you explore a wide variety of possibilities such as alternative repayment plans, deferment, consolidation, discharge, forgiveness, and forbearance options. Inceptia will stay in touch with you via phone calls, letters, and/or emails to help you find answers to your questions and solutions to your issues. For additional resources including information on repayment options, please visit Inceptia’s Federal Student Loan Overview website at

What is a Direct Loan?

Direct Loans are available for students enrolled at least half-time in a qualifying program and who are in good academic standing.  Students must be actively participating in the class (i.e. the class must already have started and the student must be attending) in order to be eligible for their funds. Direct Loans may be either subsidized or unsubsidized and must be repaid. The interest rate for Direct loans is variable. The federal government determines interest rates on July 1 of each year. The amount a student can borrow per academic year will depend upon enrollment, dependency status, and other aid received.

A-B Tech does not certify Sallie Mae loans or private loans.

What are Direct Subsidized Loan funds?

Direct Subsidized Loan funds are awarded based on financial need. The federal government pays the student's interest while he/she is enrolled in school at least half-time in a qualifying program. The student begins paying interest when repayment of the loan begins.

What are Direct Unsubsidized Loan funds?

Direct Unsubsidized Loan funds are not need based. The student will be charged interest from the time funds are disbursed until the loan is paid in full. Students may choose to make monthly interest payments while in school, or they can choose to defer interest payments. If the student chooses to defer interest, it will accrue and will be added to the principal amount of the loan. Please note, if interest is capitalized, it will increase the amount the student has to repay.

Students may receive subsidized and unsubsidized loans for the same enrollment period. The interest rate for Direct Subsidized Loans as well as Direct Unsubsidized Loans disbursed between July 1, 2015 and June 30, 2016, is 4.29%. The interest rate for Direct PLUS Loans made on or after July 1, 2015 is 6.84%.  

See below for additional information on Direct Loans and how to apply.

The last date for processing electronic MPN and Entrance Counseling files and Direct Loans Decline or Reduce forms for the fall term is September 18, 2015. MPNs, Entrance Counseling, and Decline/Reduce forms can still be submitted after September 18, 2015, but they will be for spring term loans.


How do I apply for a Direct Loan?

  1. All students applying for a Direct Loan must complete a Master Promissory Note (MPN) at, where you will login using your FAFSA PIN Number.  If you do not remember your PIN, please go to to retrieve it.  Please note, the promissory note is a binding legal document. You are agreeing to repay the loan when you sign the promissory note.  If you have already completed a MPN at another school, you must go to the website and add our school code (004033) to your MPN so that we can receive it.
  2. You will also complete Entrance Loan Counseling online at  Your loan funds will not be certified until we have received confirmation that you have completed your Entrance Counseling. If you have already completed Entrance Counseling at another school, you are not required to do it again, but you must go to the website and add our school code (004033) to your Entrance Counseling so that we can receive it.
  1. Once the above steps are completed, the college will post your aid on your account. You will be able to see the total amount that you are eligible to receive in your WebAdvisor account.
  2. If you would like to reduce the loan amount or decline the loans entirely, complete the Direct Loans Reduce or Decline Form which can be located on our Forms & Resources page. Submit the completed form to the Financial Aid Office.

Note:  Direct Loans will send you a loan disclosure statement showing the amount of loan funds approved and the dates that the money will be sent to the college for disbursement.


How much can I borrow?

The amount a student can borrow per academic year will depend upon enrollment and dependency status.

The amounts indicated below are the maximum amounts a student may borrow in both subsidized and unsubsidized loans for the entire academic year, including the summer semester. Students may be eligible for less than these amounts if the student is receiving other financial aid that is used to cover a portion of the cost of attendance.

Please note that if a student transfers to A-B Tech from another school within the same academic year and requests loan funds at A-B Tech, loan funds received at the former school will be included in the yearly maximum total allowed when determining the amount of loan funds available for certification at A-B Tech.


Dependent Student




First Year




Second Year





Independent Student




First Year




Second Year





What are the interest rates on a Direct Loan for Students?

Loan Interest Rates*

Loan Type

Disbursed between July 1, 2015 and June 30, 2016

Direct Subsidized Loans

Fixed at 4.29%

Direct Unsubsidized Loans

Fixed at 4.29%

*Interest rates on federal student loans are set by Congress.


How will I receive my Direct Loan money?

Your loan funds will be disbursed to the college in two disbursements (per semester) according to the disbursement schedule provided by Direct Loans in your loan disclosure statement. Funds will be posted into your college financial aid account so that you may charge your tuition, fees and books provided that you applied for a loan early enough to have the money in your account at the time these expenses are due. Loan funds will be disbursed to you on the date published on the Financial Aid Calendar. If you are only applying for Fall semester, Spring semester, or Summer semester, you will receive two disbursements during those semesters, not one.


New loan recipients

There is a 30 day waiting period on disbursements for new loan recipients.


When do I repay the money?

Once a student graduates, leaves school, or drops below half-time status, he/she will have six months before beginning repayment. The student is also required to participate in an exit counseling session online. Loan payments will be made directly to the student's lender.


How much will I repay over the life of my loan?

The Department of Education has created some helpful calculators that can help you figure out which repayment options are best for you, your monthly payments, and how much you'll end up paying over the life of your loan. If you are considering taking out a student loan to help pay your education expenses, utilizing these calculators is an important first step toward planning for any debt that you incur. 

Loan Repayment Calculators


Where do I go for Direct Loan counseling?

Entrance Counseling

Exit Counseling


What is Default?

Default means failure to honor the repayment agreement of a loan, including: failure to make payments on time; failure to make payments in the correct amount; or failure to file deferment requests properly or on time. When a loan enters default, the lender transfers the loan to a guarantor. The guarantor then owns the loan from the lender. It is our goal to help students keep their student loan(s) out of default and to assist in bringing and/or keeping their accounts current.


Repayment Solutions for Those Who Find Themselves in Repayment Trouble

  • Deferment – you may postpone your payments when certain criteria are met such as unemployment, economic hardship, disability, and school enrollment.
  • Forbearance – permits the reduction of payments, provides an extension of time, or temporarily postpones payments. Financial problems that do not meet the requirements for a deferment might qualify you for the forbearance.
  • Consolidation – by consolidating your student loans, you might be able to reduce your monthly payments. Contact your lender or servicer for more information.
  • Alternative Payment Plan – Some borrowers qualify for other special payment plans such as Income Sensitive, Graduated, or Lowered Payment Plans.

Contact your lender or servicer for more information about these options.


Options After Default

Federal regulations provide three options to help borrowers in default on student loans restore their benefits.
The three options are:

  • Reinstated Eligibility - You may still be able to regain your eligibility to participate in federal student financial aid programs even though your loan is in default. You must make six voluntary, on-time, consecutive monthly payments. Your loan will still be considered in default but you will have reinstated your eligibility to apply for federal student aid. The amount you will have to pay will be determined by the amount of your debt and your individual economic circumstance.
  • Rehabilitation – Loan Rehabilitation allows you to remove your loan from default. Under Loan Rehabilitation you make on-time, voluntary, consecutive monthly payments for a minimum of one year (12 consecutive months).
  • Consolidation – Loan Consolidation is available to all borrowers, including those in default. Loan Consolidation allows you to combine several loans into a single account with new repayment options. If your Consolidation application is approved, your loan will no longer be considered in default.

Consequences of Default

After your student loan has defaulted, the entire balance becomes due and you are no longer eligible for any Title IV financial aid or for any of the options described above.

Other consequences of default may include:

  • Reporting the default to all national credit bureaus.
  • Withholding of a percentage of your wages until the debt is paid in full.
  • Adding collection and attorneys’ fees to the balance of your loan(s).
  • Seizure of your IRS tax refund by the guarantor or U.S. Department of Education.

Tips for Student Loan Management

  • Do not lose copies of your loan documents, and repayment schedules. (And note amount, overall cost, and interest rates).
  • Note the billing cycles of your loans.
  • Remember to give lenders your correct address, telephone number, and email address before leaving school.
  • Know the correct billing servicers for each lender.
  • Promptly update your lender with any status changes (e.g. school status, unemployment) prior to your payment due date. Look for written acknowledgement.
  • If you return to school, follow up with each lender to insure that they have received your enrollment verification or deferment. Look for written acknowledgement.
  • Ensure each lender/servicer has your current status (i.e. forbearance, deferment, etc.).
  • Keep deferment status current with each lender.

National Student Loan Data System (NSLDS) Statement

All loans originated and disbursed through A-B Tech will be submitted to the National Student Loan Data System (NSLDS), and will be accessible by guaranty agencies, lenders, and institutions determined to be authorized users of the data system.  HEOA Sec. 489 amended HEA Sec. 485B(d)(4) (20 U.S.C. 1092b)

Helpful Websites


Updated 9.15.15