Federal Direct Subsidized and Unsubsidized Loans
Direct Lending Master Promissory Note (Log in with your verified FSA ID)
The information that students submit on their Free Application for Federal Student Aid (FAFSA) determines their eligibility for one or a combination of these programs. The Direct Subsidized/Unsubsidized Loan requires no credit or income requirement and is a low- or no-interest loan while the student is enrolled. Effective for loans disbursed on or after July 1, 2023, the interest rate is fixed at 5.50% for Federal Direct Student Loans for undergraduate students (subsidized and unsubsidized) and 7.05% for Federal Direct Unsubsidized Student Loans for graduate students. (For the 2022-23 academic year, for loans disbursed prior to July 1, 2023, the interest rate was 4.99% for undergraduate Stafford Loans and 6.54% for graduate students). Freshmen may borrow a maximum of $5,500 in Federal Direct Student Loans (subsidized and unsubsidized) their first year. Sophomores may borrow $6,500 per year, while juniors, seniors, and fifth-year undergraduates may borrow up to $7,500 per year. The total aggregate amount an undergraduate may borrow is $31,000. Federal Direct Subsidized Loan recipients have their interest paid by the federal government while they are in school and during their six-month grade period. Repayment of principal and interest begins six months after the student graduates or ceases to be enrolled for at least six credits a semester. Federal Direct Unsubsidized Loans accrue interest while students are in school. The student has the option to pay the interest on their loan while they are in school. Repayment of principal and interest begins six months after the student graduates or ceases to be enrolled for at least six credits. There is no pre-payment penalty for advanced or accelerated repayment.
Additional Federal Direct Unsubsidized Loan
Dependent students whose parents are unable to obtain a PLUS Loan due to credit problems may borrow an additional amount of the Direct Unsubsidized Loan. The additional Direct Unsubsidized Loan is also available to independent undergraduates. The annual maximum amounts available are: Freshmen $4,000, Sophomores $4,000, Juniors $5,000, and Seniors $5,000.
The Consolidated Appropriates Act, 2012 which was signed into law on December 23, 2011, affects the grace period for Federal Direct Subsidized/Unsubsidized Loans which are first disbursed on or after July 1, 2012 and before July 1, 2014. Federal Direct Subsidized/Unsubsidized Loans will still begin repayment 6 months after graduation or dropping below half time, however interest will accrue on the Federal Direct Subsidized loans during this time.