Direct Loan Program

The three types of loans available under the DL program are Subsidized, Unsubsidized, and Parent loans for undergraduate students (PLUS).

SUBSIDIZED & UNSUBSIDIZED LOANS

The subsidized and unsubsidized loan programs are available to both dependent and independent students. Eligibility for the subsidized Stafford loan is based on financial need while eligibility for the unsubsidized loan is not based on financial need.

If your financial need is not great enough, you may not be eligible for the entire amount of the subsidized Stafford loan. In this situation the amount not received in the subsidized Stafford loan may be received in the unsubsidized Stafford loan program.

  • Dependent Students: The maximum amount a dependent student can borrow per academic year is $5,500, no more than $3,500 from the subsidized loan program. If a parent applies for a PLUS loan on behalf of their dependent student and is denied, the student may apply for an additional $4,000 from the unsubsidized program.

  • Independent Students: The maximum amount an independent student can borrow per academic year is $9,500, no more than $3,500 from the subsidized loan program. Under the subsidized loan program the government pays the interest due until the student enters repayment, six months after ceasing at least half-time enrollment. Under the unsubsidized loan program the student is responsible for interest that accrues from the date of the first disbursement.

PLUS LOANS

The PLUS loan program is available to parents of dependent students. An eligible parent borrower for a federal PLUS loan is a student's natural mother or father, adoptive parent or legal guardian. An eligible parent borrower must meet the same citizenship or residency requirements that a student borrower is required to meet. The government does not provide an in-school interest subsidy on this loan.

PAYING IT BACK

Repayment on the Subsidized and the Unsubsidized loan begins six months after the student ceases to be enrolled at least half-time. The minimum monthly payment is $50 per loan. The interest rate on both loans is fixed at 4.66%.

Repayment on the PLUS loan begins 60 days after the first disbursement has been made. The interest rate is fixed at 7.21%.

ORIGINATION FEE

In all federal loan programs, a loan origination fee is charged. The origination fee for the subsidized and unsubsidized loan program is 1.073% and the origination fee for the PLUS loan is 4.292%.