Federal Direct Subsidized Loan

Eligibility

Complete FAFSA
Demonstrate financial need
Awarded to undergraduate students
Must enroll at least halftime
Must complete a Direct Loan Master Promissory Note and Entrance Interview prior to first disbursement.
Exit Interview must be completed if student drops below half time or ceases enrollment.

Interest Rates

Fixed interest rate of 2.75 percent for loans first disbursed on or after July 1, 2020, and before July 1, 2021
Fixed interest rate of 3.73 percent for loans first disbursed on or after July 1, 2021, and before July 1, 2022

Loan Fees

First Disbursement Date	Loan Fee
On or after Oct. 1, 2020, and before Oct. 1, 2021	1.057 percent
On or after Oct. 1, 2021, and before Oct. 1, 2022	1.057 percent

Master Promissory Note

Once the Direct loan has been awarded and guaranteed, the Department of Education will send you a notification to complete a Master Promissory Note (MPN). Loan funds will not be disbursed until the borrower completes the MPN.

You are only required to complete an MPN one time as it can be used for up to 10 years of borrowing for educational expenses. A new MPN must be signed if you cease enrollment for one full academic year or if your MPN has expired after 10 years. Each academic year, all students using the MPN will be notified of their loan eligibility.

Annual Loan Limits

Annual Loan Limits - Direct Loan
Dependent Students (whose parents were not denied a PLUS loan)	Combined Base Limit for Subsidized and Unsubsidized Loans	Additional Limit for Unsubsidized Loans	Total Limit for Unsubsidized Loans (minus subsidized amounts)
First-Year Undergraduate (Freshman)	$3,500	$2,000	$5,500
Second-Year Undergraduate (Sophomore)	$4,500	$2,000	$6,500
Third-Year and Beyond Undergraduate (Junior, Senior)	$5,500	$2,000	$7,500
Preparatory Coursework (for enrollment in an undergraduate program)	$2,625	$0	$2,625
Preparatory Coursework (for enrollment in a graduate or professional program)	$5,500	$0	$5,500
Teacher Certification Coursework	$5,500	$0	$5,500
Independent Students (and dependent students whose parents were denied a PLUS loan)	Combined Base Limit for Subsidized and Unsubsidized Loans	Additional Limit for Unsubsidized Loans	Total Limit for Unsubsidized Loans (minus subsidized amounts)
First-Year Undergraduate (Freshman)	$3,500	$6,000	$9,500
Second-Year Undergraduate (Sophomore)	$4,500	$6,000	$10,500
Third-Year and Beyond Undergraduate (Junior, Senior)	$5,500	$7,000	$12,500
Preparatory Coursework (for enrollment in an undergraduate program)	$2,625	$6,000	$8,625
Preparatory Coursework (for enrollment in a graduate or professional program)	$5,500	$7,000	$12,500
Teacher Certification Coursework	$5,500	$7,000	$12,500

Aggregate Loan Limits

Aggregate Loan Limits - Direct Loan
Student Type	Combined Base Limit for Subsidized and Unsubsidized Loans	Additional Limit for Unsubsidized Loans	Total Limit for Unsubsidized Loans (minus subsidized amounts)
Dependent Undergraduate Students (whose parents were not denied a PLUS loan)	$23,000	$8,000	$31,000
Independent Undergraduate Students (and dependent students whose parents were denied a PLUS loan)	$23,000	$34,500	$57,500

Repayment

When you receive your first Federal Direct Loan, you will be contacted by your loan servicer. Your loan servicer will provide regular updates on the status of your Federal Direct Loan(s). After you graduate, leave school, or drop below half-time enrollment, you will have a six-month grace period before you are required to begin repayment. During this period, you'll receive repayment information from your loan servicer, and you'll be notified of your first payment due date. Payments are usually due monthly.