Federal Direct Loans

The William D. Ford Federal Direct Loan (Direct Loan) Program is a federal student loan program under which eligible students and/or parents borrow directly from the U.S. Department of Education at participating schools. If you apply for federal student aid, you may be offered one or more of these loans as part of your financial aid award. A loan is money that you or your parents (if applicable) must pay back with interest. If you do decide to borrow one of the federal loans listed make sure you understand the terms and conditions of the loans.

Types of Federal Direct Loans

There are several different types of federal direct loans. Each loan type has different stipulations with regard to annual limits and loan rates.

  • Direct Subsidized Loan

    This loan program provides low interest loans to students who are enrolled at least half-time in a degree or teacher certification program and have a “demonstrated need” based upon the information provided as a result of the completion of their Free Application for Federal Student Aid 3(FAFSA). No interest accrues while in school at least half-time. Borrowers are assessed an origination/guarantee fee which is deducted prior to the disbursement of the loan to HBU. Repayment begins six months after dropping below half-time and interest will begin to accrue during the grace period.

    Annual limits:

    • $3500 – Freshman
    • $4500 – Sophomore
    • $5500 – Junior/Senior

    Aggregate limits:

    • Undergraduate Dependent Students: $31,000 (no more than $23,000 of which can be subsidized).
    • Undergraduate Independent Students: $57,500 (no more than $23,000 of which can be subsidized).
  • Unsubsidized Loan for Dependent Students

    This loan is available to dependent students who are enrolled at least half-time in a degree or teacher certification program and do not demonstrate a financial need based upon the information provided as a result of the completion of their Free Application for Federal Student Aid (FAFSA). Applicants must seek aid from the Direct Subsidized Loan program before receiving loans from the Direct Unsubsidized Loan. Borrowers are assessed an origination/guarantee fee which is deducted prior to the disbursement of the loan to HBU. Repayment begins six months after dropping below half-time. The student is responsible for the interest that accrues on the Direct Unsubsidized Loan during in-school and deferment periods.

    Undergraduate students are eligible for up to a $2,000 unsubsidized loan annually in addition to the Direct Subsidized Loan limits.

  • Unsubsidized Loan for Independent Students

    This loan is available to independent undergraduate and graduate students who are enrolled at least half-time in a degree or teacher certification program who do not demonstrate a financial need based upon the information provided as a result of the completion of their Free Application for Federal Student Aid (FAFSA). The annual limit is $6,000 for the first and second year undergraduates. Students who have achieved third or fourth year status are eligible to borrow up to $7,000 annually, and graduate students may borrow up to $20,500 annually, not to exceed the cost of education. These amounts are in addition to the Direct Subsidized Loan amounts.

    The subsidized and unsubsidized Direct Loan interest rates are variable and adjusted on an annual basis every July 1, but will not exceed 8.25%. Borrowers are assessed an origination/guarantee fee which is deducted prior to the disbursement of the loan to HBU. Repayment begins six months after dropping below half-time. The student is responsible for the interest that accrues on the Direct Unsubsidized Loan during in-school and deferment periods.

    Annual maximum award:

    • $6,000 – Freshman/Sophomore
    • $7,000 – Junior/Senior
    • $20,500 – Graduate

    Aggregate limits:

    • Undergraduate Dependent Students: $31,000 (no more than $23,000 of which can be subsidized)
    • Undergraduate Independent Students: $57,500 (no more than $23,000 of which can be subsidized)
    • Graduate Students: $138,500 (prior to July 1, 2012, no more than $65,500 of which can be subsidized)

Loan Requirements

Federal Loans for Parents and Graduate Students

Additional Federal Loans are available for Parents and Graduate students.

View Parent and Graduate Loans