Federal Direct Student Loan Information

Federal Direct Loan

There are two types of Federal Direct Loans; Subsidized and Unsubsidized.

Students who demonstrate financial need may obtain the loan on a subsidized basis. The borrower does not pay interest on the subsidized loan while they are in school. Students who do not demonstrate a financial need may obtain the Federal Direct Loan on an unsubsidized basis. The borrower does pay the interest on the unsubsidized loan while they are in school and during the repayment period.

 

The Federal Direct Loan (Subsidized) interest rate, effective July 1, 2012, is a fixed rate at 6.8%. The Federal Direct Loan (Unsubsidized) interest rate will remain 6.8%. An origination fee of up to 1.0% for undergraduate and graduate students is deducted from the loan proceeds. There are lenders and guarantors that may pay all or a portion of these fees.

 

Although the University determines the financial need and the amount of subsidized and/or unsubsidized eligibility, the loan is made by the Federal Department of Education. 

 

The loan limits are established by the federal government; the amount of subsidized loan eligibility, however, is contingent on financial need.

 

The annual loan limits as of July 1, 2008 are as follows:

 

Dependent
Undergraduate Student
Credits Total
Loan
Amount
Maximum
Subsidized
Amount
Unsubsidized
Freshman 0 – 27 $5,500 $3,500 $2,000
Sophomore 28 – 59 $6,500 $4,500 $2,000
Junior 60 – 87 $7,500 $5,500 $2,000
Senior 88 + $7,500 $5,500 $2,000

 

 

Dependent with
Plus Denial/Independent
Undergraduate Student
Credits Total
Loan
Amount
Maximum
Subsidized
Amount
Unsubsidized
Freshman 0 – 27 $9,500 $3,500 $6,000
Sophomore 28 – 59 $10,500 $4,500 $6,000
Junior 60 – 87 $12,500 $5,500 $7,000
Senior 88 + $12,500 $5,500 $7,000

 

 

Federal Direct Loan Aggregate Limits

The aggregate loan limits are the total amount of Federal Direct Loan a student can borrow during their educational program. The aggregate limits are as follows:

 

Dependent Undergraduate $31,000 – No more than $23,000 can be Subsidized Stafford Loan money
Independent Undergraduate or Dependents with PLUS Denials $57,500– No more than $23,000 can be Subsidized Stafford Loan money
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