Federal Direct Loans
Federal Direct Loans require a completed and correct FAFSA and other requirements. These loans are not based on your credit history unless you previously defaulted on another federal student loan or owe money for an over-award on a federal grant. There are two types of loans available: subsidized and unsubsidized.
This is a low-cost option to help undergraduate students supplement the cost of their education. If qualified, you may be eligible for up to $5,500 depending on financial need and grade level. Even though interest accrues on this loan, the federal government pays it while you are enrolled at least half-time in an eligible degree program (enrollment must consist of courses required for your degree completion). You have a six-month grace period after graduation, or enrolling less than half-time, before entering into repayment.
This option is available to both undergraduate and graduate students, and it is not based on financial need. Graduate students may be eligible for up to $20,500 per academic year, and undergraduate students may be eligible for up to $12,500 per academic year (see chart below). Interest accrues at the time of disbursement. Typically, students defer the accrued interest until after they go into repayment in a process called “capitalization;” however, this will increase the balance of your loan. We encourage students to set up quarterly interest payments with their lender if possible.
Doctoral students majoring in Clinical Psychology are eligible for an additional unsubsidized loan of $12,500 for a nine-month academic year or $16,667 for a 12-month academic year. Students in this program are also eligible for higher aggregate loan limits for their subsidized and unsubsidized loans. (See chart below.)
Interest Rates
The interest rates on your Direct Subsidized and Unsubsidized Loans are based on the dates the loans were disbursed. All Direct Loans disbursed prior to July 1, 2006 have a variable rate that is adjusted annually. Loans disbursed after July 1, 2006 until June 30, 2013 have a FIXED interest rate.
All loans disbursed on or after July 1, 2013 will have a “variable-fixed” interest rate based on financial markets at the time of disbursement. “Variable-fixed” means that interest rates are variable based on financial markets annually; however, the interest rate for a specific award year will be fixed for the life of that loan. For information on the current rates, please visit the Federal Interest Rates page.
| Annual Limits for Direct Loans | Subsidized | Total (Subsidized & Unsubsidized) |
| Dependent – Undergraduate Students | ||
| First Year (0 to 29 credits) | $3,500 | $5,500 |
| Second Year (30 to 59 credits) | $4,500 | $6,500 |
| Third Year & Beyond (60+ credits) | $5,500 | $7,500 |
| Independent – Undergraduate Students | ||
| First Year (0 to 29 credits) | $3,500 | $9,500 |
| Second Year (30 to 59 credits) | $4,500 | $10,500 |
| Third Year & Beyond (60+ credits) | $5,500 | $12,500 |
| Graduate & Professional Studies | N/A | $20,500 |
| Psy. D. Students | N/A | $37,167 |
| Aggregate Limits for Direct Loans | Subsidized | Total (Subsidized & Unsubsidized) |
| Dependent – Undergraduates | $23,000 | $31,000 |
| Independent – Undergraduates | $23,000 | $57,500 |
| Graduate & Professional Students | N/A | $138,500 |
| Psy. D. Students | N/A | $224,000 |
Loan Eligibility
In order to qualify to receive a student loan (Direct or private), a student must be enrolled and attend classes/submit assignments on at least a half-time basis, regardless of the stage of his/her program. Loan borrowers must notify the Office of Advising if they wish to register for any courses not required in their degree plan as this can adversely impact their federal aid. Visit our Financial Aid Enrollment Requirements website page here for detailed credit hour requirements required for halftime enrollment.
If a student plans on changing their enrollment after a loan has disbursed, he/she should contact Student Financial Aid before making any final decision or submitting paperwork. A representative will review with you the effects of changing your enrollment.
The total loan amount a student is eligible for is based on the following formula:
Cost of Attendance (COA) – Aid (scholarships, etc.) = Total Loan Eligibility
The following formula determines a student’s eligibility for a Subsidized Loan:
COA – Expected Family Contribution (EFC) – Aid = Subsidized Loan Eligibility
Students are encouraged to begin the financial aid application process in conjunction with their admissions application. Although a financial aid award cannot be made until a student is accepted, all necessary paperwork will be on file to expedite the awarding process upon acceptance. Students interested in borrowing a Federal Direct Loan should complete the Free Application for Federal Student Aid (FAFSA) as soon after October 1 as possible. The FAFSA application will require you to submit your tax information from the prior prior year. Student Financial Aid suggests submitting the FAFSA by March 15 to ensure timely processing and arrival of funds for the fall semester.
The FAFSA may be submitted one of two ways. The student may fill out the paper application or complete the FAFSA online. Submitting the FAFSA online greatly reduces the processing time of the application.
Early submission of applications helps to ensure the arrival of funds by the final payment deadline. It also allows for necessary information to be available when Student Financial Aid begins the awarding process.