Federal Direct Loan

Federal Direct Subsidized Loan

The terms of the need based Federal Direct Subsidized Loan Program require that the student borrower repay, with interest, this source of financial assistance. This program is referred to as “subsidized” because the student is not charged interest while they are enrolled in school at least half-time and during any deferment periods. For loans issued after July 1, 2012, interest will accure during the grace period.  For loans issued prior to July 1, 2012 interest will not accure during the grace period. Additional terms, subject to revision by federal regulation, include:

  • Maximum annual limit varies by year in school
  • 3.76% fixed interest rate during repayment for loans disbursed prior to July 1, 2017
  • 4.45% fixed interest rate during repayment for loans first disbursed on July 1, 2017 and after
  • 1.069% origination fee for loans with a first disbursement date on or after October 1, 2016
  • Repayment on both principal and interest beginning six months after the student ceases to be enrolled in school on at least a half-time basis, generally extending over a 10-year period
  • $23,000 maximum base aggregate undergraduate borrowing limit

Federal Direct Unsubsidized Loan

The terms of the non-need-based Federal Direct Unsubsidized Loan Program require that the student borrower repay, with interest, this source of financial assistance. This program is referred to as “unsubsidized” because interest accrues (accumulates) while the student is enrolled in school. Interest on Unsubsidized Direct Loans begins to accrue after disbursement of the loan funds; however, the student may choose to have the payment of the interest deferred during enrollment and later capitalized (added to principal) at the time of repayment. Additional terms, subject to revision by federal regulation, include:

  • 3.76% fixed interest rate during repayment for loans disbursed prior to July 1, 2017
  • 4.45% fixed interest rate during repayment for loans first disbursed on July 1, 2017 and after
  • 1.069% origination fee for loans with a first disbursement date on or after October 1, 2016
  • Repayment on both principal and interest beginning six months after the student ceases to be enrolled in school on at least a half-time basis, generally extending over a 10-year period
  • $31,000 maximum base aggregate undergraduate borrowing limit (combined subsidized and unsubsidized loans) for dependent students

Borrowing Limits

Dependent Students
Year Subsidized Unsubsidized1 Annual Total Aggregate Subsidized Aggregate Total
(Subsidized & Unsubsidized)
1 $3,500 $2,000 $5,500 $23,000 $31,000
2 $4,500 $2,000 $6,500
3, 4, 5 $5,500 $2,000 $7,500
Independent Students2
Year Subsidized Unsubsidized1 Annual Total Aggregate Subsidized Aggregate Total
(Subsidized & Unsubsidized)
1 $3,500 $6,000 $9,500 $23,000 $57,500
2 $4,500 $6,000 $10,500
3, 4, 5 $5,500 $7,000 $12,500

1Students choosing to borrow the additional $2,000 Unsubsidized Loan should complete the Additional Direct Unsubsidized Loan Eligibility Form.

2If a Federal Direct PLUS Loan is applied for by a parent and denied based on credit, a dependent undergraduate may borrow at the independent levels listed above.

Additional information on the Federal Direct Student Loan Program is available from the Department of Education.

NOTE:   Information about your loans will be reported to the National Student Loan Data System (NSLDS).  Information in NSLDS is accessible to schools and loan servicers for specific purposes as authorized by the department.

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Federal Exit Loan Counseling

Federal regulations require that all students who have borrowed from the federal loan programs receive exit loan counseling upon ceasing at least half-time enrollment. Exit loan counseling provides details regarding a borrower’s rights and responsibilities for student loan repayment, deferment options, and loan consolidation benefits.

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Federal Student Loan Consolidation

Federal Direct Consolidation Loans are available for most federal loans, including FFELP (Stafford, PLUS and SLS), FISL, Perkins, Health Professional Student Loans, NSL, HEAL, Guaranteed Student Loans, and Direct loans. Loan consolidation is not for everyone but many graduating student borrowers have effectively refinanced their loans through this federal program in recent years, simplifying loan repayment and lowering monthly payments.

Borrowers should first give thorough review to the conditions and terms being offered by their lender. Check the lender's website and make a careful decision.

Additional information on federal loan consolidation is available from the Department of Education and the FinAid! website.