William D. Ford Federal Direct Loans

Federal Direct Loans are fixed-rate, low interest loans available to degree-seeking undergraduate and graduate students attending accredited schools at least half time. They are the most common source of college loan funds.

There are two types of Direct Loans:

  • Subsidized Direct Loans are need-based, and the government pays the interest on these loans while you are in school.  Subsidized loans are only available to undergraduate students.
  • Unsubsidized Direct Loans are not need-based, and you are responsible for all of the interest that accrues on the loan, including while you are in school.

For Direct Loans first disbursed between July 1, 2015 and June 30, 2016, the interest rate for undergraduate students is 4.29% for Subsidized and Unsubsidized Loans. The interest rate for graduate students is 5.84% for Unsubsidized Loans. For Direct Loans first disbursed between July 1, 2016 and June 30, 2017, the interest rate for undergraduate students is 3.76% for Subsidized and Unsubsidized Loans. The interest rate for graduate students is 5.31% for Unsubsidized Loans.


Notice of Upcoming Direct Loan Origination Rate Increase 

Due to the changes brought on by the Federal Sequester, any Federal loans that are disbursing on or after October 1, 2015 will have an origination fee of 1.068% for Direct Loans and 4.272% for Parent and Graduate PLUS Loans. Loans with a first disbursement before December 1, 2013 will be charged the original 2013-2014 origination fee of 1.051% for Direct Loans and 4.204% for Parent and Graduate PLUS Loans for any subsequent disbursements. An origination fee is an expense of borrowing a Federal loan and is subtracted from the total loan amount prior to disbursement. The borrower is responsible for repaying the total loan amount.


As an example, a Direct Subsidized or Direct Unsubsidized Loan of $5,500 disbursed prior to December 1, 2013 would have a 1.051% origination fee, for a total of $57.80. On or after October 1, 2015, the same loan would have an increased origination fee of 1.068% for a fee of $58.74. A Parent or Graduate PLUS Loan of $10,000 disbursed prior to December 1, 2013 would have an origination fee of 4.204% for a loan fee of $420.40 versus a 4.272% origination fee and a loan fee of $427.20 for a Parent or Graduate PLUS loan disbursed on or after October 1, 2015.


Direct Subsidized Loan Limit 

If you are a “first-time borrower” on or after July 1, 2013, there is a limit on the maximum period of time (measured in academic years) that you can receive Direct Subsidized Loans. A “first-time borrower” is defined as an individual with no outstanding Direct Loan or FFEL Program Loan balance on July 1, 2013, or on the date the individual borrows a Direct Loan after July 1, 2013.


Students defined as “first-time borrowers” may not receive Direct Subsidized Loans for more than 150 percent of the published length of their academic program. For example, students enrolled in four-year bachelor’s degree program are limited to six years of Subsidized Loan funding. In some cases, borrowers subjected to this limit may also become responsible for paying the interest that accrues on a Direct Subsidized Loan. This interest usually would have been paid by the U.S. Department of Education.


 Get additional information and examples of enrollment that may require the borrower to be responsible for interest..

Federal regulations limit the dollar amount a student may receive in an academic year from a Federal Subsidized Loan (see chart below for limits).

To view your federal student loan history, visit the National Student Loan Data System (NSLDS) and log in with your FAFSA ID and PIN.

Annual Loan Limits for Direct Subsidized and Unsubsidized Loans

Loan limits are for a full academic year (fall, spring and summer). You may not receive more than half of each loan limit per semester up to the annual limit at your academic level.

 Year Dependent Studentsa   Independent Studentsa
(0-29 credit hours)
(maximum $3,500 subsidized)
(maximum $3,500 subsidized)
(30-59 credit hours)
(maximum $4,500 subsidized)
(maximum $4,500 subsidized)
Junior and beyondb
(60+ credit hours)
(maximum $5,500 subsidized)
(maximum $5,500 subsidized)
Teacher Certification
(after Bachelor's degree)
(maximum $5,500 subsidized)
Graduate and Professional N/A
(unsubsidized only)


Aggregate Loan Limits: Maximum Total Outstanding Loan Debt

 Student Level Dependent Students  Independent Studentsc  
Undergraduate $31,000
maximum $23,000 subsidized)
(maximum $23,000 subsidized)
Graduate and Professional N/A $138,500

a -- Dependent students whose parents are unable to borrow PLUS Loans are eligible to apply for the Independent undergraduate loan limits.
b -- Second Bachelor candidates are treated as Undergraduate students for purposes of determining loan limits.
c -- The Graduate/Professional maximum includes Stafford Loans received for undergraduate study.