Federal Direct Loans are for undergraduate and graduate* students who are U.S. citizens or permanent residents.   

Differences between Subsidized and Unsubsidized Loans

Subsidized	Unsubsidized
Need-based loans For undergraduate students only Interest Rate:  3.4% fixed (for loans disbursed between 07/01/212 and 06/30/2013) Interest free while enrolled (at least half time)	Not need-based loans For undergraduates and graduates Interest Rate: 6.8% fixed (for loans disbursed between 07/01/212 and 06/30/2013) Accrues interest while student is enrolled

*Important Change for Graduate Students - Effective for enrollment which begins after July 1, 2012, graduate students will no longer qualify for subsidized loans. They will only be eligible for Federal Direct Unsubsidized Loans and Grad PLUS loans.

Repayment
Repayment  begins six (6) months after the student is no longer enrolled at least half time.

Loan Fees
One percent (1%) is deducted from the loan amount prior to disbursement.  

Annual Borrowing Limits
(Combined Federal Direct Subsidized and Unsubsidized Loan Limits):

Grade Level	Dependent Student	Independent Student
Freshman	$5,500 ($3,500 sub max)	$9,500 ($3,500 sub max)
Sophomores	$6,500 ($4,500 sub max)	$10,500 ($4,500 sub max)
Junior/Seniors	$7,500 ($5,500 sub max)	$12,500 ($5,500 sub max)
Graduate Students	n/a	$20,500

Cumulative Lifetime Limits (Aggregate Limits):

Undergraduate Dependent Students	$31,000 ($23,000 sub max)
Undergraduate Independent Students	$57,500 ($23,000 sub max)
Graduate Students	$138,500

First Time Borrower Requirements

A Master Promissory Note (MPN) must be completed.  The MPN defines the conditions under which you are borrowing and the terms under which you agree to pay back the loan.  The MPN is generally required one time only (it is good for 10 years).
Direct Loan Entrance Counseling must be completed before loan funds are paid.  The purpose of the counseling is to ensure you fully understand your rights and obligations as a borrower.