Get a Direct Loan

Federal Direct Loans help undergraduate, graduate and professional students attending college at least half-time pay for their education.

If you show financial need, you will qualify for a subsidized loan. The federal government pays the interest that accrues while you're in school, during authorized deferment periods and for six months after you're no longer enrolled at least half-time. You pay the interest when your loan enters repayment. Only undergraduate students are eligible for subsidized loans.

You don't have to show financial need to qualify for an unsubsidized loan. However, you are responsible for the interest while you're in school. You can pay the interest monthly or quarterly or have it added to the principal.

Eligibility Criteria

You must:

  • Be enrolled or accepted for enrollment at least half-time in an eligible degree or certificate program at an eligible institution.
  • Have a high school diploma or its equivalent.
  • Be in good standing and making satisfactory academic progress if currently enrolled.
  • Be a citizen, permanent resident, or eligible noncitizen of the United States.
  • Not be in default or owe a refund on any federal education grant or loan unless you have made satisfactory arrangements to repay the outstanding debt.

Your need for a subsidized loan is determined before your eligibility for an unsubsidized loan is determined. Your college determines your eligibility.

Loan Limits

How much you can borrow in Direct Loans depends on your year in college, the cost of attendance, the length of the program, whether you're a dependent or independent student and the other financial aid you're getting. Your expected family contribution is considered in the case of a subsidized loan. You may be offered a subsidized loan, an unsubsidized loan or both.

Federal Direct Annual Loan Limits
Grade Level Dependent Status Independent Status
First Year $5,500 $9,500
Second Year $6,500 $10,500
Each Remaining Year of Undergraduate Study $7,500 $12,500
Each Year of Graduate or Professional Study N/A $20,500

The total maximum outstanding debt allowed is:

Federal Direct Aggregate Loan Limits
Dependent Undergraduate $31,000
Independent Undergraduate $57,500
Graduate or Professional Student* $138,500

*Includes any Federal Stafford Loan and/or Federal Supplemental Loans for Students received as an undergraduate.

Interest Rate

Interest for subsidized loans is generally paid by the Department of Education while you are in school. You are responsible for the interest on unsubsidized loans, beginning when you receive the funds. New Direct Loans have an interest rate tied to the yield on 10–year Treasury notes. That means the interest you pay will probably change from year to year.

Fees Paid by the Borrower

You will be charged a 1% federal default fee. Any fees are deducted from the principal before your loan is disbursed.