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Direct Loan Information

MassBay Participates in the William D. Ford Federal Direct Student Loan Program Administered by the U.S. Department of Education and MassBay.
This means that the loan listed on the Bay Navigator Portal will borrow funds directly from the federal government. Loans are financial assistance that must be repaid after you graduate or drop below six credits.


In order to receive a Direct Subsidized and/or Unsubsidized Loan, you must complete the Free Application for Federal Student Aid (FAFSA) at Once your eligibility for loans is determined, some students will be offered a loan as part of their financial aid award. This must be accepted through the Bay Navigator before it will be taken into consideration for payment of your bill. If you have never taken out a Federal Student Loan at MassBay there are two other requirements that must also be completed before a student’s loan funds will be received by the school: A Master Promissory Note (MPN) and Entrance Counseling. An MPN is the legal agreement you make to borrow and repay this money. Entrance Counseling gives the student additional information about being a borrower of a student loan. Both must be completed by going to Instructions on how to complete these requirements will be sent to the student’s MassBay email address after the initial financial aid award letter is sent.

To request an adjustment to an existing Stafford Loan or to request a loan if one was not offered as part of your financial aid award, you must contact the MassBay Financial Aid Office. We will then contact you through your MassBay email as to whether or not we could process your request. This can take a few days during non-peak times and can take weeks during peak times. Please try to plan accordingly.

Once you are award a Direct Student loan, your information is submitted to the National Student Loan Data System (NSLDS) and is accessible by servicers, schools and borrowers. You may access this information by going to We strongly encourage students to create their account on NSLDS to monitor their Federal Student Aid activity throughout college attendance and during repayment.


Type of Loan




Subsidized Only




Subsidized and Unsubsidized (Dependent student) Total




Subsidized and Unsubsidized (Indpendent student) Total




Direct Subsidized Loan

The Direct Subsidized Loan is offered to students who demonstrate financial eligibility according to federal regulations. The Federal Government pays the interest while the student is enrolled in at least 6 credits. Therefore, no interest accrues while the student remains enrolled in 6 credits or more. The 2018-2019 year interest rate for the Subsidized Loan is 5.05 percent, fixed for the life of the loan.

If you are a first time borrower (meaning you have never taken out a Direct Loan OR have a zero balance on a previous Federal Stafford/Direct Loan) on or after July 1, 2013 there is a limit on the maximum period of time (measured in academic years) that you can receive Direct Subsidized Loans.

A student may not receive Direct Subsidized Loans for more than 150 percent of the published length of their program. For example, if you are enrolled in a two-year Associate’s degree program the maximum period for which you can receive Direct Subsidized Loans is three years (150 percent of 2 years = 3 years). Because a student’s maximum eligibility is based on the type of program a student is enrolled in, if you receive Direct Subsidized Loans for one program and then change to another program, the Direct Subsidized loans you received for the earlier program will generally count toward your new program.

Certain types of enrollment may cause you to become responsible for the interest that accrues on your Direct Subsidized Loan when the Federal Government usually would have paid it. For example, if a student is in an Associate’s Degree Program and they have used all 3 years of eligibility without graduating and remain enrolled, their loans would now accrue interest. When the student goes in to repayment they would be responsible for repaying the original amount of the loan plus the amount of interest that accrued. More information is provided during Entrance Counseling at Students can also monitor their Subsidized usage on

Direct Unsubsidized Loan

The Direct Unsubsidized Loan is offered to students who do not qualify, on the basis of calculated financial eligibility, for a Direct Subsidized Loan or who qualify for only a portion of the Subsidized Direct Loan annual limit. Interest accrues on a Direct Unsubsidized Loan after the loan is disbursed regardless of the student’s enrollment status. Students may elect to pay the interest while in school or have it capitalized (added to the principal) at the end of the loan’s grace period and pay it during the repayment period. The 2018-2019 year interest rate for the Unsubsidized Loan is 5.05 percent, fixed for the life of the loan.

Loan Disbursement

Once you have completed your MPN and Entrance Counseling your loan will be processed. Loan funds are typically disbursed after the first 45 calendar days in each semester. Students who have credit balances after their charges have been paid will be eligible for a refund check. For loans with a FIRST disbursement on or after October 1, 2018 and before October 1, 2019, an origination fee of 1.062 percent, is deducted automatically from amounts borrowed. The net result is that the amount disbursed is slightly less than the loan amount approved, so you need to make sure you are requesting the correct amount to cover your bill and other educational expenses. Students who have credit balances after their charges have been paid will be eligible for a refund check. If you withdraw from the college or drop below six credits before your loan is disbursed, you may not be eligible for the loan funds. Check with the Financial Aid Office before withdrawing or reducing your course load to less than six credits. We want assist you in understanding the impact of changes to your enrollment and how it relates to your financial aid eligibility. We pride ourselves in assisting our students to make informed decisions.

Leaving School or Falling Below Six Credits

In order to receive loan funds, you must be enrolled at least half time (6 credits) at the time of disbursement. If you are less than half time at the time of disbursement, you no longer are eligible to receive loan funds. If you leave school or drop below six credits, you will enter the 6-month grace period leading to repayment of your loan(s). If either situation occurs you are required to complete an Exit Interview. If you return to MassBay or another school with an enrollment status of half-time or more, you should file an in school deferment form to notify your loan servicer to postpone repayment of your loan.


The Direct Loan Servicing Center will contact you at your last known address you provided them with to inform you about going into repayment and who your Loan Servicer is. Your Loan Servicer will send you a monthly statement by mail or you can sign up for electronic billing. You are responsible for notifying the Loan Servicer and the Financial Aid Office of any changes to your name or address. Failure to make payments may result in delinquency and default that will affect your ability to obtain further financial aid at any school and will directly impact your ability to obtain consumer credit in the future.


A deferment is a postponement of payment on a loan. If your loan is subsidized, you will not be required to make any interest payments. You may qualify for a deferment while you are:

  • Enrolled at least half time in an eligible post-secondary school or studying full time in a graduate fellowship program or an approved disability rehabilitation program.
  • Unemployed or meet federal rules for economic hardship (limited to 3 years).
  • You may also be eligible for a deferment based on qualifying active duty service in the U.S. Armed Forces or National Guard. In most cases, you need to submit a deferment request to your Loan Servicer along with documentation of your eligibility for the deferment. Visit for more information.
  • You may also be eligible for a deferment if you are diagnosed with cancer and undergoing cancer treatment. To learn more, please visit for more information.
  • If you’ve gone back to school and National Student Loan Data System (NSLDS) receives enrollment information that shows you’re enrolled at least half time, it will automatically put your loans into deferment and notify you. If you are in default on your loan, you are not eligible for a deferment.



If you cannot make your scheduled loan payments, but don’t qualify for a deferment, your Loan Servicer may be able to grant you a forbearance. Forbearance allows you to temporarily stop making payments on your loan, temporarily make smaller payments, or extend the time for making payments. Some common reasons for being granted forbearance are illness or financial hardship. If you are in default on your loan, you are not eligible for forbearance.

PLEASE NOTE: Borrowing money for your education is a serious and binding legal obligation.

You are advised to use care in determining if and how much you should borrow. Please do not hesitate to ask for assistance or advice in making this decision. Your loans are a part of your present and your future.

If you have any questions about the loan or loan processing, or do not understand the information provided, please contact the Financial Aid Office by email at and a financial aid counselor will respond to your inquiry as soon as possible. Please note: Depending on the time of year, emailing us during peak enrollment periods may result in substantial response times.

Additional Information:

MassBay Cohort Default Rate: Search by OPE-ID 002171

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