Federal Direct Subsidized and Unsubsidized Loans
The Federal Direct Subsidized Loan is a student loan that is available to undergraduate students only. The Federal Direct Unsubsidized Loan is a student loan that is available to undergraduate, graduate, and pharmacy students. Loan funds come directly from the U.S. government.
To Apply for the Federal Direct Subsidized or Unsubsidized Loan:
First, the student must complete the Free Application for Federal Student Aid (FAFSA) and meet the eligibility requirements. Then, the student must follow the steps below.
Returning Students
There are no steps required to renew Federal Direct Subsidized or Unsubsidized loans for students who received this type of loan at NDMU during the previous academic year.
New Students/First Time Borrowers at Notre Dame:
Go to studentloans.gov and log in using the FSA ID, then:
Step 1: Choose the option Complete Entrance Counseling.
Step 2: Choose the option Complete Master Promissory Note (MPN).
Subsidized vs. Unsubsidized Loans
A student's Federal Direct Loan award may be Subsidized, Unsubsidized or the combination of the two.
Subsidized Direct Loan
- Subsidized loans are only available to undergraduate students.
- The Subsidized Loan is awarded for the academic year and is based on the student's financial need, dependency status, and academic grade level.
- Financial need is calculated by the Cost of Attendance minus the Estimated Family Contribution (EFC) determined by FAFSA and any other aid received.
- The federal government subsidizes or pays the interest on the loan while the student is enrolled at least half-time and in an eligible period of deferment.
- Interest will be charged once the student's grace period begins.
Unsubsidized Direct Loan
- The Unsubsidized Loan is awarded based on the Cost of Attendance minus any other aid the student will receive, the student's dependency status, and the student's academic grade level.
- Students are responsible for the interest on this loan from the time the loan is disbursed until it is paid in full. The federal government DOES NOT subsidize the interest on this loan.
- Students may choose to defer the interest during enrollment and deferment periods, but it will be capitalized (added to the principal amount).
Interest Rates
For 2018-2019, the interest rates on all Federal Direct Loans (both subsidized and unsubsidized) is 4.45% for undergraduate students, and 6% for graduate students.
Fees
For 2018–2018 loans, which will disburse after October 1, 2018, a 1.069% origination fee will be charged by the U.S. Department of Education.
Loan Limits for Each Year
Once the borrower has received Direct Subsidized Loans for a period that is 150% of the published length of the borrower's current education program, the borrower is no longer eligible for Direct Subsidized Loans.
A first-time borrower who loses eligibility for additional subsidized loans loses interest subsidy on subsidized loans received on or after July 1, 2013 if the borrower did not complete the program AND continues enrollment in the program OR enrolls in another program of the same of shorter length.
For students enrolled as regular students in eligible programs, annual Federal Direct Loan limits are as follows:
|
BASE AMOUNT (SUB/UNSUB) |
ADDITIONAL LOAN (UNSUB) |
TOTAL |
|
|
First-year |
$3,500 |
$2,000 |
$5,500 |
|
Sophomore |
$4,500 |
$2,000 |
$6,500 |
|
Junior |
$5,500 |
$2,000 |
$7,500 |
|
Senior |
$5,500 |
$2,000 |
$7,500 |
Independent Undergraduate Students and Dependent Undergraduate Students Whose Parents Cannot Borrow PLUS
|
BASE AMOUNT (SUB/UNSUB) |
ADDITIONAL LOAN (UNSUB) |
TOTAL |
|
|
First-year |
$3,500 |
$6,000 |
$9,500 |
|
Sophomore |
$4,500 |
$6,000 |
$10,500 |
|
Junior |
$5,500 |
$7,000 |
$12,500 |
|
Senior |
$5,500 |
$7,000 |
$12,500 |
Graduate and Pharmacy Students
|
BASE AMOUNT (SUB/UNSUB)* |
ADDITIONAL LOAN (UNSUB) |
TOTAL |
|
|
Graduate Students (pursuing Master's or Ph.D degree, CASE program) |
$8,500 |
$12,000 |
$20,500 |
|
Graduate Students (pursuing teaching certification, if independent) |
$5,500 |
$7,000 |
$12,500 |
|
Pharmacy Students |
$8,500 |
$24,500 |
$33,000 |
Cumulative (Total) Loan Limits
Federal regulations set aggregate, or total, loan limits in addition to the annual loan limits. Students cannot borrow more than the Aggregate Loan Limit for all subsidized and unsubsidized loans at all schools.
|
MAXIMUM SUBSIDIZED |
MAXIMUM UNSUBSIDIZED |
|
|
Dependent Undergraduates |
$23,000 |
$31,000 |
|
Independent Undergraduates |
$23,000 |
$57,500 |
|
Graduate/Professional Students |
$65,500 |
$138,500 |
|
Certain Health Professional Students (ie Pharmacy) |
$65,500 |
$224,000 |