Student loans are the type of financial aid that must be repaid. For this reason, loans are considered to be a ‘self-help’ form of assistance.

Borrowing is a serious financial obligation. Therefore, before applying for a student loan, be sure to seek other forms of financial aid funds that do not have to be paid back – such as grants and scholarships. Many times, grants and scholarships will cover tuition, fees, and books.

Your eligibility for Direct Loan is part of your Financial Aid Award.  You are not required to take out all or any of the Direct Loans offered to you.  You can accept, decrease or decline your Direct Loan offer through your LOIS account, under your financial aid award.

Types of Federal Direct Loans

Federal Direct Subsidized Student Loan 

Direct Subsidized Loans are for students who have financial need. With a subsidized Stafford Loan, the federal government will pay the interest while you’re enrolled at least half-time, during your grace period, and during deferment periods. The amount of a subsidized loan cannot exceed a student’s financial need.

This loan is subject to verified financial need and not to exceed educational costs. Repayment begins six months after you graduate, leave school, or drop below half-time enrollment, with a fixed interest rate of 5.045% percent for loans disbursed after July 1, 2018 and before July 1, 2019. 

Federal Direct Unsubsidized Student Loan  

Direct Unsubsidized loans do not require students to have financial need. With an unsubsidized Loan, you are responsible for paying the interest during all periods, starting from the date the loan is first disbursed. Information regarding repayment can be obtained from the Financial Aid Office.
Repayment begins six months after you graduate, leave school, or drop below half-time enrollment, with a fixed interest rate of 5.045% percent for loans disbursed after July 1, 2018 and before July 1, 2019. 

Federal Direct Parent Loans for Undergraduate Students 

Parents of dependent students can borrow from the PLUS loan program. They require that the applicant not have an adverse credit history and have an interest rate fixed at 7% for loans disbursed after July 1, 2017 and before July 1, 2018. Repayment begins on the date the loan is fully disbursed. If a parent is borrowing on behalf of a dependent undergraduate student, the student and parent must meet the general eligibility requirements for federal student aid.

Federal Student Loan Fee 

Most federal student loans have loan fees that are a percentage of the total loan amount. The loan fee is deducted proportionately from each loan disbursement you receive. This means the money you receive will be less than the amount you actually borrow. You’re responsible for repaying the entire amount you borrowed and not just the amount you received. The chart below shows the loan Fees for Direct Subsidized Loans, Direct Unsubsidized Loans and Direct PLUS Loans disbursed.

Loan TypeFirst Disbursement DateLoan Fee
Direct Subsidized Loans and Direct Unsubsidized Loans On or after 10/1/17 and before 10/1/18 1.066%
Direct PLUS LoansOn or after 10/1/17 and before 10/1/184.264%

Annual and Aggregate Limits for Subsidized and Unsubsidized Loans

If the total loan amount you receive over the course of your education reaches the aggregate loan limit, you are not eligible to receive additional loans. However, if you repay some of your loans to bring your outstanding loan debt below the aggregate loan limit, you could then borrow again, up to the amount of your remaining eligibility under the aggregate loan limit.

YearDependent StudentsIndependent Students
First Year Undergraduate$5,500 Annual Loan Limit ($3,500 max in subsidized)$9,500 Annual Loan Limit ($3,500 max in subsidized)
Second Year Undergraduate $6,500 Annual Loan Limit ($4,500 max in subsidized)$10,500 Annual Loan Limit ($4,500 max in subsidized)
Third Year and Beyond Undergraduate Annual Loan Limit (Bachelor Students Only)$7,500 Annual Loan Limit ($5,500 max in subsidized) $12,500 Annual Loan Limit ($5,500 max in subsidized)
Subsidized and Unsubsidized Aggregate Loan Limit $31,000 Annual Loan Limit ($23,000 max in subsidized) $57,500 Annual Loan Limit ($23,000 max in subsidized)