Understand your Loans

Federal Student Loans

US Department of Education lends loans to fund various post-secondary educational options.
There are three main types of federal student loans:

  • Direct Subsidized Loans
    This is a need based undergraduate loan. The interest on this loan is being paid by the Government while the borrower remains above “half time” in credit hours.
  • Direct Unsubsidized Loans
    This is a non-need-based loan for undergraduate, graduate and professional students. The interest on this loan begins accruing upon disbursement.
  • Direct PLUS Loans
    PLUS loans are either for graduate/professional students or for parents of dependent undergraduate students to assist in educational expenses. This is a credit-based loan that can be endorsed in case of bad credit. If parents are denied the Parent PLUS loan, their student can request to have their unsubsidized loan increased.

Lastly, an alternative option to federal student loans is private student loans. These are non-Federal Loans made by a bank, credit union, state agency or school.

Use the National Student Loan Data System to retrieve your most current loan information!

Did you know there are limits to how much you can borrow?

The following chart shows the annual and aggregate limits for subsidized and unsubsidized loans.

Year Dependent Students (except students whose parents are unable to obtain PLUS Loans) Independent Students (and dependent undergraduate students whose parents are unable to obtain PLUS Loans)
First-Year Undergraduate Annual Loan Limit $5,500—No more than $3,500 of this amount may be in subsidized loans. $9,500—No more than $3,500 of this amount may be in subsidized loans.
Second-Year Undergraduate Annual Loan Limit $6,500—No more than $4,500 of this amount may be in subsidized loans. $10,500—No more than $4,500 of this amount may be in subsidized loans.
Third Year and Beyond Undergraduate Annual Loan Limit $7,500—No more than $5,500 of this amount may be in subsidized loans. $12,500—No more than $5,500 of this amount may be in subsidized loans.
Graduate or Professional Student Annual Loan Limit All graduate and professional students are considered independent $20,500 (unsubsidized only)
Subsidized and Unsubsidized Aggregate Loan Limit $31,000—No more than $23,000 of this amount may be in subsidized loans. $57,500 for undergraduates—No more than $23,000 of this amount may be in subsidized loans.
$138,500 for graduate or professional students—No more than $65,500 of this amount may be in subsidized loans.
The graduate aggregate limit includes all federal loans received for undergraduate study.

Current Interest Rates

The interest rates for Direct Subsidized Loans and Direct Unsubsidized Loans are shown in the chart below.

Interest Rates for Direct Loans First Disbursed on or After July 1, 2020, and Before July 1, 2021
Loan Type Borrower Type Fixed Interest Rate
Direct Subsidized Loans and Direct Unsubsidized Loans Undergraduate 2.75%
Direct Unsubsidized Loans Graduate or Professional 4.30%
Direct PLUS Loans Parents and Graduate or Professional Students 5.30%

Visit the Federal Interest Rates and Fees webpage for more information.