Skip to main content
Hub

Federal Loans

Direct Subsidized and Unsubsidized Loans

Application Process

Complete the Free Application for Federal Student Aid (FAFSA) for consideration for subsidized and unsubsidized loans. Federal loans are managed through federal loan servicers, not private banks, as part aid eligibility determined through the FAFSA.

Students must complete a FAFSA every year for continued federal loan consideration.

Borrower Responsibility

The student is the borrower of Federal Direct Subsidized and Unsubsidized Loans. This means the student is responsible for:

  • Completing disbursement requirements
  • Maintaining satisfactory academic progress for financial aid eligibility
  • Monitoring the amount they have borrowed on the Federal Student Aid website

Comparing Subsidized and Unsubsidized Loans

Federal Direct Subsidized Loans

  • Only undergraduate students may be eligible
  • Student must demonstrate financial need
  • Interest paid by the federal government as long as you are enrolled at least half-time.

Federal Direct Unsubsidized Loans

  • Both undergraduate and graduate/professional students may be eligible
  • Financial need is not necessary
  • Interest begins to accrue as soon as the loan is disbursed and must either be paid during in-school periods or deferred.*

*This is called "capitalization" because the interest is added to the principal (loan amount borrowed). Then interest accrues on this new, increased principal amount.

Direct PLUS Loans

These federal loans include both Parent PLUS Loans and Graduate PLUS Loans. Each require their own applications and have their own eligibility criteria. For additional details about each of these loan options, please visit our Parent PLUS Loan and Graduate PLUS Loan webpages.

Additional Information

Interest Rates

Federal Direct Loans have fixed interest rates. This means the interest rate on the amount borrowed for an academic year will remain the same for the life of the loan.

A borrower has 120 days after disbursement to return any portion of a federal loan to the institution without being assessed any interest or fees on the amount returned.

Federal loan borrowers can monitor loan debt, check interest rates, and find their loan servicer by logging into the Federal Student Aid website with their Federal Student Aid ID (FSA ID). Additional information on interest rates, fees, and calculation can be found on the Federal Student Aid website about understanding interest.

Origination Fees

An origination fee is retained by the federal government for federal loans. It is a percentage of the amount of the loan, and it is deducted before the loan disburses to the institution. This means the loan amount accepted and borrowed will be different from the amount that disburses. You can refer to our Origination Fee webpage for additional information and a tool that will help you calculate the amount that will disburse as payment toward your institutional charges.

Federal Student Aid Resources

Find information about Federal Direct Student Loan account balances, contact information, repayment and grace periods, billing, and payment options for your loan servicer by logging in to the Federal Student Aid website with your Federal Student Aid ID (FSA ID).