Direct Loans

To apply for a federal student loan, you must first complete and submit a Free Application for Federal Student Aid (FAFSA^®) form. Based on the results of your FAFSA form, we will send you a financial aid offer, which may include federal student loans. You must accept or decline your loan in BayNavigator as needed.

Before you receive your loan funds, you will be required to

• complete entrance counseling, a tool to ensure you understand your obligation to repay the loan; and
• sign a Master Promissory Note, agreeing to the terms of the loan.

Loan Request and Identity Verification Requirement

Effective April 2025, students requesting a Federal Direct Loan or a loan adjustment must complete the Federal Direct Loan Request/Adjustment Form and present a valid government-issued photo ID in person to the Financial Aid Office. Parents requesting a Parent PLUS Loan and students requesting a private loan must also complete in-person identity verification.

Students unable to appear in person due to documented extenuating circumstances (such as residing outside New England or certain disabilities) should contact the Financial Aid Office to discuss alternative verification options.

Failure to complete identity verification may delay or prevent loan processing and disbursement.

What is Loan Proration?

The One Big Beautiful Bill Act (OBBBA)signed into law on July 4, 2025 made significant changes to federal student loan eligibility beginning with the 2026–2027 academic year.

One of these changes requires schools to reduce, or prorate, annual federal student loan limits for some students who are enrolled less than full-time.

What this means for you:

• Students enrolled full-time (12 or more credits per semester) are generally eligible for the maximum annual loan limits established by federal regulations.
• Students enrolled at least half-time but less than full-time may have their annual loan eligibility reduced based on their enrollment intensity.
• Your actual loan amount is determined at the time your loan is processed and disbursed which means the amount we disburse may differ from what you have on your award letter.
• Changes to your enrollment may result in adjustments to your loan eligibility or disbursement amounts.
• If you withdraw from classes, your federal loan eligibility may be recalculated and a portion of your loan funds may need to be returned to the U.S. Department of Education.
• If funds are returned, you may owe a balance to the College.
• Students should speak with the Financial Aid Office before withdrawing from courses to understand how their financial aid may be affected.
• Federal annual loan limits are intended to cover the entire academic year. Students cannot borrow the full annual loan eligibility amount for a single semester.

Example: How Loan Proration Works

A first-year dependent student enrolled half-time (6 credits each semester) for the entire academic year may not be eligible for the full annual federal loan limits.

If the student were enrolled full-time, their annual loan eligibility would be:

• Direct Subsidized Loan: $3,500
• Direct Unsubsidized Loan: $2,000

Because the student is enrolled at 50% enrollment intensity (12 credits attempted during the academic year instead of 24), federal regulations require the annual loan limits to be reduced.

Prorated Loan Eligibility:

• Direct Subsidized Loan: $1,750
• Direct Unsubsidized Loan: $1,000

The student’s total annual loan eligibility would therefore be $2,750 instead of the full $5,500.

Important

Prior to the 2026-2027 academic year, this same student generally would have remained eligible for the full annual federal loan limits. Beginning with the 2026-2027 academic year, federal law requires schools to reduce annual loan eligibility for many students enrolled less than full-time.

More information on federal student loan borrowing is available at studentaid.gov by clicking on Grant and Loans and selecting Undergraduate and Graduate Loans.

Fees:

All Direct Subsidized Loans and Direct Unsubsidized Loans have a loan fee. The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement. The percentage for all Direct Subsidized and Unsubsidized loans first disbursed on or after Oct. 1, 2020, is 1.057%. Loans first disbursed before that date had different loan fees.

Interest Rates:

Interest is additional money that you pay to a lender as a cost of borrowing money. Interest is calculated as a percentage of the unpaid principal amount that you borrowed.
Direct Loans are “daily interest” loans. On daily interest loans, interest accrues (adds up) every day.
If your loans are subsidized, you are not responsible for paying the interest that accrues while you’re in school. If your loans are unsubsidized, you’re responsible for all the interest that accrues, even while you’re in school. Learn about the differences between subsidized and unsubsidized loans.

Loan Disbursement

Loan funds are typically disbursed after the first 45 calendar days in each semester. The school will first apply your loan funds to your account to pay for tuition, fees, and other school charges. If any additional loan funds remain, they will be returned to you. All loan funds must be used for your educational expenses.

Repayment

After you graduate, leave school, or drop below half-time enrollment (less than six credits), you will have a six-month grace period before you are required to begin repayment. During this period, you'll receive repayment information from your loan servicer, and you'll be notified of your first payment due date. Payments are usually due monthly. Learn more about repaying your loan.

Loan Deferment and Forbearance

If you are unable to make your scheduled loan payments, contact your loan servicer immediately. Your loan servicer can help you understand your options for keeping your loan in good standing. For example, you may wish to change your repayment plan to lower your monthly payment or request a deferment or forbearance that allows you to temporarily stop or lower the payments on your loan. Learn more about deferment or forbearance options.

MassBay Cohort Default Rate: Search by OPE-ID 002171

MassBay Loan Repayment Rate: Loan repayment rates and information are listed on MassBay’s scorecard