The Direct Loan program allows eligible institutions to offer federal student aid in the form of loans. There are two types of Direct Loans: subsidized and unsubsidized. It’s important to understand the federal interest rates and fees for these loans.

Subsidized loans are offered to undergraduate learners based on financial need. The federal government pays interest while you are active in courses and through the six-month repayment grace period following graduation or separation.

Unsubsidized loans are not offered based on financial need. The federal government does not pay interest on Unsubsidized loans; it is the student’s responsibility to pay the interest on this type of loan .Interest begins to accrue when the loan is disbursed. Both undergraduate and graduate learners are eligible for unsubsidized loans.

Direct loans are subject to lifetime and annual limits.

To learn more, visit the Federal Direct Loans on Campus or studentaid.gov.