Federal Direct Loans

Subsidized and unsubsidized loans are federal student loans for eligible students to help cover the cost of higher education at a four-year college or university, community college, or trade, career, or technical school. The U.S. Department of Education offers eligible students at participating schools Direct Subsidized Loans and Direct Unsubsidized Loans.

Federal Direct Subsidized Loans

The Federal Direct Subsidized Loan is a need-based loan awarded on information given on the FAFSA. The federal government pays the interest during certain times (for example, while the student is enrolled in school).

Effective July 1, 2013, any first-time borrower will only be able to obtain Federal Direct Subsidized loans for a maximum of 150% of the published program length in which they are enrolled. For more information, view the Information Sheet (PDF) from the Department of Education.


Federal Direct Unsubsidized Loan

The Federal Direct Unsubsidized Loan is not contingent upon financial need; thus, the borrower is responsible for interest that accrues on the loan while in school.