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Federal Direct Loans for Graduate Students

These fixed-rate, federally guaranteed loans are processed through the Federal Direct Loan Program. Loans will be issued in the student’s name, and the student will be responsible for repayment.

Eligibility

To be eligible, students must be admitted into a graduate degree program and be enrolled in a minimum six credit hours of degree-level coursework.

Eligibility for Federal Direct subsidized loans is based on financial need as determined by the FAFSA, and maximum subsidized loan eligibility will be processed prior to determining unsubsidized loan amounts. Starting July 1, 2012, graduate students will no longer be eligible to receive subsidized loans – however, annual loan limits will not change.

Benefits

There are of two types of Federal Direct Loans:

  • Subsidized loans –Interest is not charged on the loan until repayment begins, with the interest rate set at 6.8% fixed.
  • Unsubsidized loans –Interest accrues while in school, with the interest rate set at 6.8% fixed. In-school interest payments are optional, but are recommended to help reduce a student’s overall debt burden.

Federal student loans will automatically be processed and listed on award letters, and students may contact our office or use STARS to cancel/reduce loan amounts. Receiving other forms of aid (scholarships, assistantships, etc.) can reduce the total amount of loans a student may receive for the academic year.

Annual Loan Limits for Graduate Students

Enrollment Base Award (Sub/Unsub) Additional Unsubsidized
Minimum six hours graduate-level courses $8,500* $12,000
Six hours prerequisite undergraduate courses (alone/combined with less than six hours of graduate courses) $5,500* $7,000
Six hours of required coursework in a teacher certification program or post-baccalaureate certificate program $5,500* $7,000
Six hours of required undergraduate course work in a second baccalaureate program $3,500-$5,500* depending on hours needed $2,000

* Starting July 1, 2012, graduate students will no longer be eligible to receive subsidized loans – however, annual loan limits will not change.

Aggregate loan limits cap the total amount of Federal Direct Loans a student can accumulate. Keep track of your outstanding federal student loans online.

  Maximum for Subsidized Combined Maximum (Sub + Unsub)
Graduate $65,500* $138,500

Once a student reaches aggregate loan limits, they are no longer eligible to receive federal student loans, and may instead consider a Federal Grad PLUS Loan or a private student loan.

Application

To be considered for Federal Direct Loans, a student must submit a Free Application for Federal Student Aid (FAFSA).

Additional Requirements

First time federal student loan borrowers must complete Entrance Counseling and a Master Promissory Note in order to receive their loan funds.

Repayment Information

Federal Direct Loans are deferred (repayment is delayed) until the student graduates, leaves school, or drops below half-time enrollment. Once deferment ends, the student will have a six-month grace period before repayment begins.

Students who may have difficulty repaying their loans should always communicate with their loan servicer and review options for postponing repayment. There are also a variety of repayment plan options for eligible students.

Students may also consider consolidation of their federal loans through the Direct Loan Consolidation programs.