The Federal Direct Student Loan Program provides financial aid assistance to expand higher education opportunities for undergraduate, graduate, and professional students attending post-secondary schools on at least a half-time basis.  This form of financial aid assistance is the U.S. Department of Education's major form of self-help aid and is available through the William D. Ford Federal Direct Loan Program.   

Loans are awarded after all your eligibility for grants, scholarships and private financial aid is considered.  Your financial aid package may include loans in the form of need-based and/or non-need-based financial aid.  

You can review the total amount of federal loans you have borrowed, any outstanding balances you may have and your current loan status on the National Student Loan Data System (NSLDS). 

Students borrowing a Federal Direct Stafford Loan, including subsidized and/or unsubsidized, are subject to maximum allowable loan limits. There are limits of which you need to be aware.

  • Annual Maximum Loan Limit: Restricts the total amount of Direct Student Loans that may be borrowed annually.
  • Aggregate Maximum Loan Limit: Restricts the amount of Direct Student Loans that may be borrowed over a student's college career.
  • The combined total amount that you may borrow through Federal Direct Subsidized and/or Unsubsidized Loans cannot exceed your Cost of Attendance (COA) minus other financial aid or the maximum annual amount allowable by law, whichever is less.
  • The maximum annual amount you can borrow in the form of a Federal Direct Subsidized and/or Unsubsidized Loan(s) is determined by your class level and dependency status.


Subsidized Loan


A Federal Direct Subsidized Loan is awarded to meet financial need after other resource and/or financial aid grants and scholarships are subtracted or to the annual loan limits whichever is lower. It is the U.S. Department of Education's major form of self-help aid and is available through the William D. Ford Federal Direct Loan Program. For undergraduate students, Federal Direct Subsidized loans first disbursed on or after July 1, 2013 have a fixed interest rate of 6.8%. Repayment begins 6 months after you graduate or are no longer enrolled at least half time.

The Budget Control Act of 2011, signed into law on August 2, 2011, eliminated the in-school interest subsidy on federal loans for graduate and professional students effective July 1, 2012.

As a result of legislation enacted July 2012, eligibility for the Direct Loan interest subsidy will be limited for new borrowers on or after July 1, 2013. The law restricts the period of time for which a borrower may receive subsidized loans, in the aggregate, to 150 percent of the published length of the student's current educational program. Once the student reaches that limit, he or she may borrow only unsubsidized loans, and interest begins to accrue on the student's outstanding subsidized loan.


Unsubsidized Loan


A Federal Direct Unsubsidized Loan is not based on your financial need. It is available to you through the William D. Ford Federal Direct Loan Program, if your Estimated Cost of Attendance (COA) is greater than your financial aid and you have not reached your annual loan limit through the Federal Direct Subsidized Loan.  

Students are not required to show financial need to qualify for the unsubsidized loan. Unlike the subsidized loan, the borrower must pay all interest that begins to accrue immediately upon disbursement regardless of enrollment status or loan deferments. Interest can be paid monthly, quarterly, or be capitalized (added to the principal balance).

The interest rate for Federal Direct Unsubsidized loans disbursed on or after July 1, 2006 is fixed at 6.8%. You are charged interest on this loan from the time the loan is disbursed until it is paid in full. If the interest is allowed to accumulate, the interest will be added to the principal amount of the loan and increase the amount to be repaid.

The Federal Direct Loan amounts for an academic period cannot exceed the student's cost of attendance (as determined by the educational institution) less the student's estimated financial assistance and, if the loan is a subsidized loan, expected family contribution.

What do I need to do to obtain a loan?

You will need to have completed a 2012-2013 or a 2013-2014 FAFSA (depending on what award year you are applying for financial aid for).  Then, you MUST complete a Direct Loan Master Promissory Note (MPN) and complete Entrance Loan Counseling before your loan is eligible to be processed if you have not completed these already.  These can be completed at  You will need the same PIN that you used to complete your FAFSA to sign into the website.  If you do not have a PIN, you may obtain PIN at  If you have forgotten or misplaced your PIN, you may obtain a duplicate PIN at the same website.  You accept your Federal Direct Loan when you sign the MCU Financial Aid Award Letter.

Eligibility Criteria

 To be eligible for either the subsidized and/or the unsubsidized loan, the student must:

  • Have a valid EFC on file in the Financial Aid Office.

·      Be enrolled or accepted for enrollment at least half-time in an eligible degree or certificate program at an eligible institution.

·      Have a high school diploma or equivalent.

·      Be in good standing and making satisfactory academic progress if currently enrolled

  • Have not already borrowed the maximum aggregate Federal Direct Stafford Loan amount.

·      Be a citizen, permanent resident or eligible non-citizen of the United States.

·      Not be in default or owe a refund on any federal education grant or loan unless satisfactory arrangements have been made to repay the outstanding debt.

  • Are not ineligible for other reasons.

Financial need is determined for the Subsidized Direct Loan before eligibility is determined for the Unsubsidized Direct Loan. Schools will determine the student's eligibility.  Financial need is determined

Note:Beginning with the 2012-2013 award year, subsidized loans will not be available for Graduate/Professional students.


Maximum Loan Limits

A borrower may receive a subsidized loan, an unsubsidized loan, or a combination of both for an academic period. However, the amount of one loan or a combination of both loans may not exceed the loan limits for an academic year based on the borrower's dependency status, grade level, and the length of the program of study in which the borrower is enrolled.


Annual Maximum Loan Limits




Freshman: 0 – 29 credit hours

$5,500 (no more than $3500 can be subsidized)

$9,500 (no more than $3500 can be subsidized)

Sophomore: 30 - 59 credit hours

$6,500 (no more than $4500 can be subsidized)

$10,500 (no more than $4500 can be subsidized)

Junior/Senior: 60+ credit hours

$7,500 (no more than $5500 can be subsidized)

$12,500 (no more than $5500 can be subsidized)

Graduate Professional


$20,500 (all unsubsidized)


Aggregate Maximum Loan Limits



Dependent Student

$31,000 (no more than $23,000 can be subsidized)

Independent Student

$57,500 (no more than $23,000 can be subsidized)

Graduate Professional

$138,500 for all combined from all undergraduate, graduate   


The higher maximum loan for independent students reflects a combination of Federal Direct Subsidized and Unsubsidized Stafford Loans. The annual maximum Subsidized Loan Stafford eligibility is limited to the dependent eligibility for each class level.  These aggregate limits include both Direct Subsidized and Unsubsidized Loans and any subsidized and unsubsidized Federal Stafford Loans received through the Federal Family Education Loan Program (FFELP).

All or part of the loan can be cancelled within 90 days of the date the school notifies the student that the loan has been credited to their account.  Loan funds will first be used to pay for tuition, fees, room and board. If funds remain after these charges have been paid, the student will receive the remaining funds by check.


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