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Federal Loan Options

As you look into federal loans, a lot of confusing terms get thrown around. The federal student loan system is easier to understand if you break it down.

Federal Loan Types

Federal Subsidized Stafford Loans

  • Based on financial need.
  • Free Application for Federal Student Aid (FAFSA) required.
  • Government pays interest while you're in school.
  • Interest rate is fixed at 4.529%
  • Repayment begins six months after you graduate, leave college or drop to less than half time.
  • Annual loan limits are set by federal government.

Federal Unsubsidized Stafford Loans

  • Not based on financial need.
  • FAFSA required.
  • You pay the interest
  • Interest rate is fixed at 4.529%.
  • Repayment begins six months after you graduate, leave college or drop to less than half-time.
  • Annual loan limits are set by the federal government.

Federal Parent PLUS Loan

  • Parents can take out this loan on your behalf if you are dependent on them, an undergraduate student and enrolled at least half time.
  • Parents must pass a credit check.
  • Loan money is paid in multiple disbursements.
  • Loans are not based on financial need.
  • Parents pay the interest.
  • Interest rate is fixed at 7.079%.
  • Fees up to 4.276%
  • Loan limit is equal to the cost of attendance minus other financial aid received

Federal Stafford Loan Rates and Limits

The federal government sets the terms and conditions for all federal student loans. The interest rate varies depending on the loan type and (for most types of federal student loans) the first disbursement date of the loan. The table below provides the interest rates for Direct Loans first disbursed on or after July 1, 2019. All interest rates shown in the chart are fixed for the life of the loan.

Interest Rates for Direct Loans First Disbursed On or After July 1

These interest rates do not affect any prior loans made to borrowers; the terms and interest rates of those loans remain the same.

Direct Subsidized Loans

Borrower Type: Undergraduate

Interest Rate: 4.529% 
(loan first disbursed on or after 7/1/19 and before 7/1/20)

Interest Rate: 5.045%
(loans first disbursed on or after 7/1/18 and before 7/1/19)


Direct Unsubsidized Loans

Borrower Type: Undergraduate

Interest Rate: 4.529% 
(loan first disbursed on or after 7/1/19 and before 7/1/20)

Interest Rate: 5.045%
(loans first disbursed on or after 7/1/18 and before 7/1/19)


Direct Unsubsidized Loans

Borrower Type: Graduate or Professional

Interest Rate: 6.08% 
(loan first disbursed on or after 7/1/19 and before 7/1/20)

Interest Rate: 6.6%
(loans first disbursed on or after 7/1/18 and before 7/1/19)


Direct PLUS Loans

Borrower Type: Parents* and Graduate or Professional Students

Interest Rate: 7.079% 
(loan first disbursed on or after 7/1/19 and before 7/1/20)

Interest Rate: 7.595%
(loans first disbursed on or after 7/1/18 and before 7/1/19)

* If you're a dependent student whose parents applied for, but were not approved for, a Federal PLUS Loan (parent loan), you can borrow at the independent undergraduate level. Contact your financial aid office for details.


Annual Stafford Loan Limits for Undergraduate Students

Dependent Undergraduate Students

  • Freshman - $5,500 (maximum $3,500 in Subsidized Stafford Loan)
  • Sophomore - $6,500 (maximum $4,500 in Subsidized Stafford Loan)
  • Junior/Senior - $7,500 (maximum $5,500 in Subsidized Stafford Loan)

Independent Undergraduate Students

  • Freshman - $9,500 (maximum $3,500 in Subsidized Stafford Loan)
  • Sophomore - $10,500 (maximum $4,500 in Subsidized Stafford Loan)
  • Junior/Senior - $12,500 (maximum $5,500 in Subsidized Stafford Loan)
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