Federal Direct Loans

Graduate students may borrow a maximum amount of $20,500 of Federal Direct Unsubsidized Loans per academic year, with a maximum aggregate total of $138,500 for all undergraduate and graduate loans of which a maximum of $65,500 is in subsidized loans. If enrolled in an eligible program at least half-time.

These loans must be coordinated with other aid and cannot exceed the total annual education costs.

With an unsubsidized loan, the student will be responsible for paying the interest that accrues during school, grace, and deferment periods. The student is not required to pay the interest while in school. If the student chooses not to make interest payments while in school, the interest will be "capitalized," which means that the lender will add the accrued interest to the principal balance of the loan. Future payments will be based on both the principal (original amount borrowed) plus any capitalized interest.

Federal Law requires both entrance and exit counseling for this loan.

Interest Rates and Fees

There is a loan origination fee deducted proportionately from each loan disbursement. The fee goes to the government to help reduce the cost of the loans. Also, if you don't make your loan payments when scheduled, you may be charged collection costs and late fees. The interest rate cap for Direct Unsubsidized Loans is 9.50%.

For loans first disbursed as of July 1, 2024, Federal Direct Unsubsidized Loans have a fixed interest rate of 8.08% fixed for graduate/professional students.

As of October 1, 2020, the loan fee for Direct Unsubsidized Loans will increase to 1.057%.

New interest rate cap for Military Members

Interest rate on a borrower's loan may be changed to six percent during the borrower's active-duty military service. This applies to both FFEL and Direct loans. Additionally, this law applies to borrowers in military service as of August 14, 2008.

Borrower must contact the creditor (loan holder) in writing to request the interest rate adjustment and provide a copy of the borrower's military orders.

In addition, no interest accrues (for a period of no more than 60 months) on Direct Loans disbursed on or after October 1, 2008, for eligible military borrowers while serving on active duty or performing qualifying National Guard duty during a war or other military operation or other emergencies, and serving in an area of hostilities qualifying for special pay