Federal Loans

1. Purpose and Eligibility:

Direct Unsubsidized Loans are federal student loans offered through the William D. Ford Federal Direct Loan Program. Unlike Direct Subsidized Loans, eligibility is not based on financial need.

Direct Unsubsidized Loans are available to eligible undergraduate, graduate, and professional students. To qualify, a student generally must:

• Be a U.S. citizen or eligible noncitizen.

• Have a valid Social Security number, unless an exception applies.

• Be enrolled at least half-time in an eligible degree or certificate program.

• Meet the general eligibility requirements for federal student aid.

• Maintain satisfactory academic progress (SAP).

• Complete the Free Application for Federal Student Aid (FAFSA).

The institution determines the amount a student is eligible to borrow based on the student’s cost of attendance, grade level, dependency status, enrollment, applicable loan limits, and other financial aid received.

2. Interest Accrual:

Interest begins accruing when a Direct Unsubsidized Loan is disbursed. The borrower is responsible for paying all interest that accrues, including interest that accrues while enrolled in school, during the six-month grace period, and during most periods of deferment or forbearance.

Borrowers may choose to pay the interest while enrolled or allow unpaid interest to remain outstanding. Borrowers should review their loan information and contact their federal loan servicer to understand how unpaid interest may affect repayment.

3. Fixed Interest Rates:

Direct Unsubsidized Loans have fixed interest rates, meaning the interest rate assigned to a loan remains the same for the life of that loan. Federal student-loan interest rates are established under federal law and may change each award year for newly issued loans.

The applicable interest rate is generally based on the student’s academic level and the date the loan is first disbursed. Current rates are available on the Federal Student Aid website.

4. Borrowing Limits:

Direct Unsubsidized Loan limits depend on several factors, including the student’s academic level, grade level, dependency status, program type, cost of attendance, other financial aid received, and previous federal student-loan borrowing.

Beginning with applicable loan periods in the 2026–27 award year:

• Annual loan limits must be reduced when a student is enrolled less than full-time.

• New annual and aggregate loan limits apply to graduate and professional students unless the student qualifies for a limited interim exception.

• A federal lifetime borrowing limit may also affect eligibility.

• Institutions may establish lower loan limits for students enrolled in particular programs when applied consistently in accordance with federal requirements.

Students must be enrolled at least half-time to receive a Direct Unsubsidized Loan disbursement. Changes in enrollment may reduce the amount a student is eligible to borrow.

Federal annual, aggregate, and lifetime loan limits are established by law and are subject to change.

5. Repayment Options:

Available repayment options depend on when the borrower received the loans, the types of federal loans held, and other borrower-specific circumstances. Options may include:

• A standard or tiered standard repayment plan with scheduled monthly payments.

• An income-driven repayment plan, including the Repayment Assistance Plan (RAP), when the borrower and loans are eligible.

• Other repayment plans available to borrowers with qualifying older federal loans.

• Public Service Loan Forgiveness (PSLF) for borrowers who work full-time for a qualifying employer and make 120 qualifying monthly payments while meeting all other program requirements.

Federal repayment options are changing under federal law. Some existing repayment plans are being phased out, and not every borrower will qualify for every plan.

Borrowers should use the Federal Student Aid Loan Simulator or contact their federal loan servicer to determine which repayment options are available for their loans.

Additional information is available on the Federal Student Aid repayment plans webpage.

6. Loan Fees:

Direct Unsubsidized Loans have a federal loan origination fee. The fee is deducted proportionately from each disbursement, so the amount credited to the student’s account will be less than the amount borrowed. The borrower remains responsible for repaying the full amount of the loan.

Current loan fee information is available on the Federal Student Aid website.

7. Application Process:

To be considered for a Direct Unsubsidized Loan, a student must complete the Free Application for Federal Student Aid (FAFSA). Although eligibility is not based on financial need, the institution must use FAFSA information and other eligibility criteria to determine the student’s loan eligibility.

If offered a Direct Unsubsidized Loan, the student must accept the loan through the institution’s financial aid process and complete all applicable requirements. Students should complete the FAFSA and any additional institutional requirements by the applicable deadlines.

8. Loan Counseling:

Before receiving a first Direct Loan, a student may be required to complete entrance counseling. Entrance counseling explains the loan’s terms and conditions, interest accrual, repayment obligations, and the borrower’s rights and responsibilities.

A borrower may also be required to complete exit counseling after graduating, leaving school, or dropping below half-time enrollment.

9. Master Promissory Note (MPN):

Before receiving a Direct Unsubsidized Loan, the borrower must complete a Master Promissory Note (MPN). The MPN is a legally binding agreement under which the borrower promises to repay the loan, accrued interest, and any applicable fees.

The MPN also explains the terms and conditions of the loan and the borrower’s rights and responsibilities. Loan acceptance through the institution may be a separate step.

10. Grace Period:

Direct Unsubsidized Loans generally have a six-month grace period after the borrower graduates, leaves school, or drops below half-time enrollment. Payments are generally not required during the grace period, but interest continues to accrue.

Borrowers should contact their federal loan servicer before the grace period ends to confirm their first payment date and available repayment options.

11. Responsibilities of Borrowers:

Borrowers are responsible for:

• Remaining enrolled at least half-time to receive loan disbursements.

• Maintaining eligibility for federal student aid and satisfactory academic progress.

• Using loan funds only for authorized educational expenses.

• Notifying the institution and loan servicer of changes to enrollment, contact information, or other relevant circumstances.

• Completing required entrance and exit counseling.

• Understanding the loan’s interest, fees, repayment terms, and total amount owed.

• Making required payments on time.

• Monitoring loan balances and progress toward forgiveness, when applicable.