Direct Subsidized/Unsubsidized Loans
What’s the difference between Direct Subsidized and Unsubsidized Loans?
- Direct Subsidized Loans have slightly better terms to help out students with financial need.
- Direct Subsidized Loans are available to undergraduate students with financial need.
- The U.S. Department of Education pays the interest on a Direct Subsidized Loan while you’re in school at least half-time.
- Direct Unsubsidized Loans are available to undergraduate and graduate students; there is no requirement to demonstrate financial need.
- You are responsible for paying the interest on a Direct Unsubsidized Loan during all periods.
- If you choose not to pay the interest while you are in school and during grace periods and deferment or forbearance periods, your interest will accrue and be capitalized.
First-time Federal Direct Loan borrowers
If you are a first-time Federal Direct Loan borrower you must complete Entrance Counseling and sign a Master Promissory note (MPN).
- Interest rates are set by Congress each year.
- Loan Repayment and Consolidation
- Annual and lifetime loan limits are based on your academic level and dependency status:
Loan Limits
Annual and lifetime loan limits are based on your academic level and dependency status.
| Academic Level | Dependent Students | Independent Students |
|---|---|---|
| Freshman - < 30 units completed | $5,500 Sub and Unsub $3,500 maximum Sub | $9,500 Sub and Unsub $3,500 maximum Sub |
| Sophomore - between 30 and 59 units completed | $6,500 Sub and Unsub $4,500 maximum Sub | $10,500 Sub and Unsub $4,500 maximum Sub |
| Junior / Senior - 60 units and above completed | $7,500 Sub and Unsub $5,500 maximum Sub | $12,500 Sub and Unsub $5,500 maximum Sub |
| Undergraduate Second Degree or Teacher Certification | $7,500 Sub and Unsub $5,500 maximum Sub | $12,500 Sub and Unsub $5,500 maximum Sub |
| Graduate Degree or Teacher Certification | Not Eligible | $20,500 Unsub only |
| Lifetime Loan Limits - Effective 7/1/2008 | ||
| Dependent Undergraduate | $31,000 (Sub and Unsub) - $23,000 maximum Sub | |
| Independent Undergraduate | $57,500 (Sub and Unsub) - $23,000 maximum Sub | |
| Graduate or Professional | $138,500 (Sub and Unsub) - $65,500 | |
For more information on Federal Direct Subsidized and Unsubsidized loans, visit studentaid.ed.gov.