Federal Student Loan Programs

Federal Student Loans, from the William D. Ford Federal Direct Loan Program, are low-interest loans for eligible students to help cover the cost of higher education. Eligible students borrow directly from the U.S. Department of Education at participating schools.

Most students who complete the Free Application for Federal Student Aid (FAFSA) are eligible for Direct Loans. Direct Loans are the best student loans available for college students. A student can borrow money in their own name. They do not need a co-signer, and they are not required to go through a credit check. Interest rates are fixed, and repayment begins six months after the student graduates or ceases to be enrolled at least half-time. We advise students to borrow the minimum amount of loan funds they need.

Eligible students must be enrolled at least part-time (6 credit hours for undergraduates and 3 credit hours for graduates) in an eligible program.


Types of Loans

Federal Subsidized Direct Loan – a federal need-based low-interest loan program. Loans are obtained from a lending institution such as a bank or credit union. Repayment does not begin and interest does not accrue until six months after the student graduates or drops below half-time enrollment. Students must be enrolled at least half-time (6 hours) to qualify. Repayment may be deferred during enrollment in graduate school. Other deferment options are available such as unemployment and disability.

Federal regulations mandate that the loan be disbursed in at least two equal payments (usually half of the proceeds in the fall semester and the other half in the spring semester). A processing fee not to exceed four percent will be deducted by the lender from the proceeds of the loan. The lifetime aggregate limit is $23,000. The FAFSA is required.

  • Interest rate 4.53% for loans disbursed after July 1, 2019, and before July 1, 2020.
  • Interest rate 2.75% for loans disbursed after July 1, 2020, and before July 1, 2021.

* Note that a 1.059% origination fee is charged by the lender for processing a loan between October 2019 and October 2020. A 1.057% origination fee is charged by the lender for processing a loan between October 2020 and October 2021.

Federal Unsubsidized Direct Loan – a federal non-need based loan program. All terms as stated under the Subsidized Stafford Loan apply to this loan as well, except that this loan is NOT interest-free while the student is enrolled. Interest does begin to accrue within 60 days of receiving loan proceeds. Payment of interest, however, may be deferred or capitalized. Students not qualifying for the full amount of Subsidized Stafford Loan may borrow the remaining annual maximum amount in an unsubsidized loan.

Federal regulations mandate that the loan be disbursed in at least two equal payments (usually half of the proceeds in the fall semester and the other half in the spring semester). A processing fee not to exceed four percent will be deducted by the lender from the proceeds of the loan. Annual maximums vary for dependent and independent students. The FAFSA is required.

  • Interest rate 4.53% for loans disbursed on or after July 1, 2019, and before July 1, 2020.
  • Interest rate 2.75% for loans disbursed on or after July 1, 2020, and before July 1, 2021.

* Note that a 1.059% origination fee is charged by the lender for processing a loan between October 2019 and October 2020. A 1.057% origination fee is charged by the lender for processing a loan between October 2020 and October 2021.

Federal PLUS Loan – a federal non-need based low-interest loan program for parents of undergraduate students. Parents without adverse credit history (determined by the lender) may borrow an amount not to exceed the difference between the total financial aid budget and all other financial assistance the student is expected to receive. The loan is obtained from a lending institution.

  • Interest rate 7.08% for loans disbursed on or after July 1, 2019, and before July 1, 2020.
  • Interest rate 5.3% for loans disbursed on or after July 1, 2020, and before July 1, 2021.

* Note that a 4.236% origination fee is charged by the lender for processing a loan between October 2019 and October 2020. A 4.228% origination fee is charged by the lender for processing a loan between October 2020 and October 2021.

Repayment begins within 60 days after receiving the final disbursement with a minimum payment of $50 per month (minimum payment is based upon the total amount borrowed and therefore may be higher than $50 for some borrowers). Federal regulations mandate that the loan be disbursed in at least two equal payments (usually half of the proceeds in the fall semester and the other half in the spring semester). A processing fee not to exceed four percent will be deducted by the lender from the proceeds of the loan. The FAFSA is required.

For more information on student loans, explore this resource from studentaid.gov.


Annual and Aggregate Loan Limits

YearDependent UG StudentIndependent UG Student
(and dependent students
whose parents are unable
to obtain PLUS Loans)
First Year$5,500
No more than $3,500 may be in subsidized loans
$9,500
No more than $3,500 may be in subsidized loans
Second Year$6,500
No more than $4,500 may be in subsidized loans
$10,500
No more than $4,500 may be in subsidized loans
Third Year$7,500
No more than $5,500 may be in subsidized loans
$12,500
No more than $5,500 may be in subsidized loans
Fourth Year$7,500
No more than $5,500 may be in subsidized loans
$12,500
No more than $5,500 may be in subsidized loans
Beyond$7,500
No more than $5,500 may be in subsidized loans
$12,500
No more than $5,500 may be in subsidized loans
Maximum Total Debt from Direct Loans$31,000
No more than $23,000 may be in subsidized loans
$57,500
No more than $23,000 may be in subsidized loans
UG is an abbreviation for Undergraduate
Annual limits include fall, spring, and summer

Applying For and Managing Loans

Remember when applying for a federal student loan to complete entrance counseling and a master promissory note on the studentloans.gov website.

You will need your FSA ID when logging in.

Direct Loans (manage your federal student loans)