Types of Financial Aid - Federal
Interest Rates and Loan Limits
Interest Rates
The Federal Direct Loan is a guaranteed student loan which may be subsidized, unsubsidized, or both.
Direct Subsidized Loan
- The subsidized loan is a need-based loan. The federal government pays the interest on the subsidized loan while you are in school at least half-time (6 credits) and during the 6 month grace period.
Interest begins to accrue after the 6 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.
- Undergraduate students: The subsidized fixed interest rate for undergraduate students is 3.4% through June 30, 2012. Effective for loans made for periods of enrollment beginning on or after July 1, 2012 the interest rate will reset to 6.8% fixed.
- Graduate students: The subsidized fixed interest rate for graduate students is 6.8% through June 30, 2012. Under the Budget Control Act of 2011, effective for Federal Direct Loans made for periods of enrollment beginning on or after July 1, 2012 graduate and professional students are no longer eligible to receive subsidized loans.
Direct Unsubsidized Loan
- The unsubsidized loan is not based on need. Interest accrues beginning on 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. When you defer interest payments, the interest is capitalized (added to the principal amount of the loan) and will increase the amount of your loan.
- The unsubsidized fixed interest rate is 6.8% for undergraduate and graduate students.
Loan Limits
| Direct Loan Limits per Grade Level |
Dependent Student |
Independent Student |
| Grade level 1 (0-29 semester credits completed) |
$5,500 |
$9,500 |
| Grade level 2 (30-59 semester credits completed) |
$6,500 |
$10,500 |
| Grade levels 3 or 4 and 5 (post-baccalaureate) |
$7,500 |
$12,500 |
| Grade levels 6 or 7 (graduate student) |
$8,500 |
$20,500 |
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 (only $65,500 subsidized)
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