Federal Direct Subsidized Loan

Federal Direct Subsidized Loans are government-subsidized loans available to students through the Department of Education.

Federal Direct Loans are available to undergraduate students who demonstrate financial need and meet the federal eligibility requirements. Undergraduate applicants are required to have their eligibility for a Federal Pell Grant determined before they may be certified for a Federal Direct Loan.

The current maximum annual Federal Direct Loan limit for freshmen is $3,500; sophomore $4,500; and juniors/seniors $5,500. Accumulated Federal Direct/Stafford Undergraduate borrowing for dependent students cannot exceed $23,000 for an undergraduate degree.

A loan fee is normally charged to the borrower and is deducted from your loan amount before you receive it. At present this fee of 1.069% is subtracted from the total loan before the funds are disbursed.

Beginning October 1, 2016, all borrowers qualified for the fixed interest rate set at 3.76%.

While the borrower is in school at least half-time, interest on a Stafford Loan is paid by the federal government on the borrower’s behalf.

Repayment begins six months after you leave school or drop below half-time status. The minimum annual repayment is $600 ($50 monthly). You may have up to ten years to repay depending upon your loan size.