Direct Subsidized & Unsubsidized Loans are a type of Federal Student Aid. You apply for them by submitting the Free Application for Federal Student Aid (FAFSA) form.

You will have to fill out the FAFSA form every award year that you are in school to stay eligible for federal student aid.

For more information, visit Federal Student Aid.

Direct Subsidized Loans

The amount you can borrow is determined by:

• your academic year,

• whether you will be attending for a full academic year,

• your Student Aid Index (SAI),

• your cost of attendance (CoA),

• and the amount of other student aid (such as Pell Grants).

The amount may not exceed your financial need.

Direct Unsubsidized Loans

The amount you can borrow is determined by:

• your academic year,

• whether you will be attending for a full academic year,

• your Student Aid Index (SAI),

• your cost of attendance (CoA),

• and the amount of other student aid (such as Pell Grants).

The amount may not exceed your cost of attendance (CoA).

The amounts also may not exceed the annual loan limit or the aggregate loan limit.

Annual Loan Limits are based on your academic year and whether you are a dependent or independent student.

If you are a dependent student whose parents are not eligible for a Direct PLUS Loan, you may be able to receive additional Direct Unsubsidized Loan funds.

Dependent Student:

• First-Year Undergraduate: $5,500-No more than $3,500 of this amount may be in subsidized loans.

• Second-Year Undergraduate: $6,500-No more than $4,500 of this amount may be in subsidized loans.*

Independent Student:

• First-Year Undergraduate: $9,500-No more than $3,500 of this amount may be in subsidized loans.*

• Second-Year Undergraduate: $10,500-No more than $4,500 of this amount may be in subsidized loans.*

*The Manicuring program, Esthetics program, and second year of the Cosmetology program are less than a full academic year, so amounts will be prorated.

If you have borrowed a Direct Subsidized or Unsubsidized Loan at another school, you will not be able to borrow more than the remaining annual loan limit until the academic year has expired.

Aggregate (or Lifetime) Loan Limits are based on whether you are whether you are a dependent or independent student and whether you are an undergraduate or graduate student.

Dependent Subsidized and Unsubsidized Aggregate Loan Limit:

• $31,000-No more than $23,000 of this amount may be in subsidized loans.

Independent Subsidized and Unsubsidized Aggregate Loan Limit:

• $57,500 for undergraduates-No more than $23,000 of this amount may be in subsidized loans

• $138,500 for graduate or professional students-No more than $65,500 of this amount may be in subsidized loans. The graduate aggregate limit includes all federal loans received for undergraduate study.

If the total loan amount you receive over the course of your education reaches the aggregate loan limit, you are not eligible to receive additional loans. However, if you repay some of your loans to bring your outstanding loan debt below the aggregate loan limit, you could then borrow again, up to the amount of your remaining eligibility under the aggregate loan limit.

Interest is additional money that you pay to a lender as a cost of borrowing money.

Direct Loans are “simple daily interest” loans. On daily interest loans, interest accrues (adds up) every day. The amount of interest that accrues per day is calculated by dividing the interest rate on your loan (as a decimal) by the number of days in a year and then multiplying that by the outstanding principal balance of the loan.

For example, on a $10,000 Direct Unsubsidized Loan with a 6.8% interest rate, the amount of interest that accrues per day while the loan has an outstanding balance of $10,000 is $1.86, calculated as follows:

(0.068 / 365) X $10,000 = $1.86

If you have a Subsidized Loan, the U.S. Department of Education pays the interest while you are in school at least half-time, during the 6 months after you leave school (your grace period), and during deferments.

If you have an Unsubsidized Loan, you are responsible for paying the interest during all periods.

For more information, visit https://studentaid.gov/understand-aid/types/loans/interest-rates.

Once you receive an official Financial Aid Offer, you can indicate whether you are accepting all of the loans you are eligible for, or if you would like to decline all or part of them. Sign, date, and return to the Financial Aid Administrator! If it is your first time receiving a Direct Loan, you will be required to

• complete entrance counseling, a tool to ensure you understand your obligation to repay the loan; and

• sign a loan contract called a Master Promissory Note, agreeing to the terms of the loan.

If you borrow a Subsidized or Unsubsidized loan, you'll receive your funds in at least two payments called disbursements. Generally, Federal Student Aid disbursements are scheduled for the beginning and midpoint of your academic year or program.

Federal Student Aid disbursements are first used to pay your tuition and fees. Any money left over is paid to you directly for other education-related expenses.

For more information, visit https://studentaid.gov/complete-aid-process/receive-aid.