Federal Direct Subsidized/Unsubsidized Loan

The terms of the need-based Federal Direct Loan Program require that the student borrower repay, with interest, this source of financial assistance. Additional terms, subject to revision by federal regulation, include:

  • Maximum annual limit varies by year in school
  • 5.50% fixed interest rate for undergraduate students for loans first disbursed from July 1, 2023, through June 30, 2024
  • 1.057% origination fee for student loans with a first disbursement date from October 1, 2020, through September 30, 2023
  • Repayment on both principal and interest begins 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 for "Subsidized" loans. $31,000 maximum aggregate undergraduate borrowing limit for combined subsidized and unsubsidized loans for dependent students

Students who qualify for a “Subsidized” Federal Direct Loan are not charged interest while they are enrolled in school at least half-time and during any deferment periods. Students ineligible for a "Subsidized" loan are able to borrow an "Unsubsidized" federal direct loan. “Unsubsidized” Federal Direct Loans do accumulate interest while the student is enrolled in school. Interest 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. For more information about Federal Direct Loans, visit https://studentaid.gov/.

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Borrowing Limits

Undergraduate Dependent Students
Year Subsidized Unsubsidized 1 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
Undergraduate Independent Students 2
Year Subsidized Unsubsidized 1 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

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

If a parent applies for a Federal Direct PLUS Loan and is 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.

How to Apply

Borrowers who wish to utilize the Federal Direct Loan Program (Student), should complete the steps below as soon as possible to ensure Notre Dame can begin processing your loan(s) prior to the fall semester statement. The two steps below only need to be completed if you are a first time borrower at Notre Dame.

STEP 1. Complete Entrance Counseling (First-time Borrowers)

Visit studentaid.gov

“Log In” using the student's FSA ID (Federal Student Aid username and password)

Complete Entrance Counseling

The interactive entrance counseling session helps you to understand your loan responsibilities and provides tools to develop a budget for managing educational expenses. Entrance counseling takes 20-30 minutes to complete and requires your FSA ID (used to complete your FAFSA).

STEP 2. Complete Master Promissory Note (First-time Borrowers)

Complete/Submit "Master Promissory Note"

Select "Subsidized/Unsubsidized"

The Master Promissory Note (MPN) is a legal document in which you promise to repay your loan and any accrued interest and fees to the U.S. Department of Education. The MPN also offers details on the terms and conditions of the loan. Completion of the MPN takes up to 30 minutes and requires the following:

  • The names, addresses, and phone numbers of two references

  • Your driver’s license number (if applicable)

Federal Loan Processing Overview

  • The U.S. Department of Education will notify Notre Dame after you have completed entrance counseling and signed your MPN.
  • You will receive a disclosure statement from the U.S. Department of Education providing specific information about your loan, including loan amount, fees, and the expected disbursement dates.
  • To ensure your loan disbursement is credited to your University account for the start of the fall term, complete the two steps above as soon as you are able. Loans are processed starting in June as soon as the steps above are completed.
  • The Office of Financial Aid will notify you via email when your loan funds have been disbursed to your University account.
  • Loan applications cannot be processed after the academic year ends or if the student ceases to be enrolled at least half-time.

The timely repayment of your student loans is important to maintaining a good credit history, especially if you wish to consider applying for future consumer or student loans. Therefore, it is important to know who owns your loan, when your payments are due, how to make a payment, and your total amount of indebtedness. Federal regulations require that all students who have borrowed from the federal loan programs receive exit loan counseling. Exit loan counseling provides details regarding a borrower’s rights and responsibilities for student loan repayment, deferment options, and loan consolidation benefits.

Learn more about the Federal Direct Loan Program by visiting studentaid.gov.

Learn more about repayment options for Federal Direct Loans by visiting studentaid.gov/manage-loans/repayment.

Federal Student Aid Ombudsman Group

The Ombudsman Group is dedicated to helping resolve disputes related to Direct Loans, Federal Family Education Loan (FFEL) Program loans, and Guaranteed Student Loans. If you’ve completed the steps to resolve your loan dispute and you still are not satisfied, you may need to contact the Federal Student Aid (FSA) Ombudsman Group of the U.S. Department of Education (ED). The Ombudsman Group is a neutral, informal, and confidential resource to help resolve disputes about your federal student loans.

Additional information on the Federal Student Aid Ombudsman Group is available from the Department of Education.