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Direct Loan - Subsidized

Eligibility:
  • Award is based on financial need.

Interest Rates

Fixed Rate Loans

Loan Type

Date of First Disbursement

Fixed Interest Rate

Direct Subsidized Loans
Undergraduate Students

7/1/14–6/30/15

4.66%

7/1/13-6/30/14

3.86%

7/1/11-6/30/13

3.40%

7/1/10–6/30/11

4.50%

7/1/09–6/30/10

5.60%

7/1/08–6/30/09

6.00%

7/1/06–6/30/08

6.80%

Direct Subsidized Loans
Graduate and
Professional
Students

On or after 7/1/06 - 6/30/12

6.80%

(Graduate/Professional students are not eligible to receive Direct Subsidized loans for periods beginning on or after July 1, 2012)

Comments:

  • Loans disbursed prior to July 1, 2006, will continue to have a variable interest rate capped at 8.25%.
  • The Department of Education pays the interest for a student borrower who receives a Subsidized loan while they are in school at least half-time, during deferment periods, and during the six months after they leave school. The interest which accrues during the qualifying periods mentioned above is referred to as the interest subsidy. Starting July 1 2013, the interest subsidy will be limited to 150% of program length for new borrowers. This means that an undergraduate student working on a four-year degree will be able to borrow Subsidized loans to cover a total of six years of schooling (four years plus an additional 2 years should extra time be needed to graduate). After the sixth year, a student borrower will not have any remaining subsidized loan eligibility and will be eligible for an Unsubsidized Stafford loan. Additionally, any subsidized loans received by the student from July 1, 2013 on will lose their subsidy when the student has reached 150% of their subsidized loan eligibility.
  • Grace period refers to the six month period after a student borrower graduates, withdraws or ceases to be enrolled at least half-time. During the grace period before repayment begins, the Department of Education pays the interest accrued on a Direct Subsidized loan. Borrowers who receive Direct Subsidized loans with first disbursements occurring between July 1, 2012 and July 1, 2014 will be responsible for interest which accrues during the grace period. The accrued interest will be added to the loan principal if a borrower chooses not to make payments during the grace period.
  • First-time borrowers who have been offered a Direct Subsidized Loan should complete a master promissory note (MPN) online from the Promissory Notes page.
  • In addition to completing a MPN, first-time Stafford loan borrowers must also complete entrance loan counseling before any loan proceeds can be disbursed. The counseling includes an online tutorial and a quiz. Borrowers should complete entrance loan counseling via the Direct Loan Counseling page.
  • The maximum awards differ by grade level, dependency status, and length of academic program.
  • Repayment begins 6 months after the borrower graduates, leaves school, or drops below half-time status.
  • Repayment may be deferred or modified under certain conditions. There are several repayment plans available.