Federal Direct Loan Program

Direct Loans are fixed-rate loans available to eligible students and parents to help pay for the cost of a student's college education. The lender is the U.S. Department of Education, though the entity you deal with, your loan servicer, can be a private business. While other forms of financial aid such as grants and scholarships will be your first choice for financing your college education, these loans can be relied on to fill in any gaps. They can be divided into Stafford Loans and PLUS Loans.

Stafford Loans:

There are two types of Federal Stafford Loans for undergraduate students: subsidized and unsubsidized. Recipients of Federal Stafford Loans must be enrolled in school at least half-time (6 credit hours).

  • Federal Subsidized Stafford Loan is a loan program through which the government pays the loan interest for the student while the student is in school. This type of Stafford loan is need-based.
  • Federal Unsubsidized Stafford Loan is a loan program through which the loan interest accrues while the student is enrolled. This type of Stafford loan is non-need based.

Federal undergraduate student loans are limited by the government, based on grade level and dependency status. The financial aid office will review a student’s eligibility for both subsidized and unsubsidized Stafford loans, and offer these as part of the financial aid award. Subsidized Stafford loans cannot exceed the following amounts:

  • Freshmen: $3,500
  • Sophomores: $4,500
  • Juniors and Seniors: $5,500

These limits can be supplemented by unsubsidized loans. Under the provisions of the program, a qualified dependent undergraduate student may borrow up to the following maximum annual limits in total Stafford loans:

  • Freshmen: $5,500
  • Sophomores: $6,500
  • Juniors and Seniors: $7,500

Independent undergraduate students may be eligible for additional unsubsidized Stafford loan. In either case, additional lifetime aggregate borrowing limits apply.

PLUS Loans:

Parent Loans for Undergraduate Students (PLUS) are unsubsidized loans that can be used by parents of dependent students to help cover college expenses. Parents can use PLUS loans to borrow up to the cost of attendance minus all other financial assistance. These loans are partially credit-based; a parent must be approved based on their credit history. Interest is charged during all periods.