Types of Financial Aid - Federal
Interest Rates, Fees and Limits
The Federal Direct Loan is a guaranteed student loan which may be subsidized, unsubsidized, or a combination of both subsidized and unsubsidized. Interest rates differ depending on whether you are an undergraduate or graduate/professional student and the time frame that you borrow the loan. The federal government sets interest rates for the Direct Loan each July 1st for the upcoming academic year.
Interest Rates and Loan Fees:
- Undergraduate students: The fixed interest rate for subsidized and unsubsidized Direct Loans first disbursed on or after July 1, 2013 and before July 1, 2014 is 3.86%. The interest rate for loans first disbursed on or after July 1, 2014 and before July 1, 2015 is 4.66%.
- Graduate/professional students: The unsubsidized fixed interest rate for Direct Loans first disbursed on or after July 1, 2013 and before July 1, 2014 is 5.41%. The interest rate for loans first disbursed on or after July 1, 2014 and before July 1, 2015 is 6.21%.
- The Direct Loan has a loan (origination) fee that is deducted from each loan disbursement you receive. The origination fee is 1.072% for loans first disbursed on or after December 1, 2013 and before October 1, 2014. The fee is 1.073% for loans first disbursed on or after October 1, 2014 and before October 1, 2015. See the chart for more information.
- The subsidized loan is a need-based loan available to undergraduate students. Subsidized Direct Loans for graduate and professional students were eliminated under the Budget Control Act of 2011 for loans made for enrollment periods beginning on or after July 1, 2012.
- The federal government pays the interest on the subsidized loan while you are in school at least half-time (6 credits). NOTE: Undergraduate borrowers of subsidized loans disbursed between July 1, 2012 and June 30, 2014 are responsible for any interest that accumulates during the six-month grace period.
- You can borrow up to your financial need as determined by the federal financial aid formula or up to the program maximum, whichever is less.
- The unsubsidized loan is not based on need. Interest accrues beginning the date of disbursement, during the in-school period, the grace period, and periods of repayment or deferment.
- The interest may be paid during the in-school period or deferred and students are encouraged to do so to avoid capitalization of interest. Deferring interest payments will capitalize interest (add your interest to the principal amount of the loan) and will increase the amount of your loan.
|Direct Loan Limits per Grade Level
|Grade level 1 (0-29 semester credits completed)
|Grade level 2 (30-59 semester credits completed)
|Grade levels 3 or 4 and 5 (post-baccalaureate)
|Grade levels 6 or 7 (graduate student)
The maximum aggregate Direct Loan limits are specified by federal law. Federal regulations also stipulate that a student cannot receive financial aid in excess of the cost of attendance. Therefore, some students are not able to borrow the full amounts listed.
- Dependent Undergraduate: $31,000 (only $23,000 subsidized)
- Independent Undergraduate: $57,500 (only $23,000 subsidized)
- Graduate and Professional Students: $138,500
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