Federal Direct Loans
There are two types of Federal Direct Loans, subsidized and unsubsidized. Students must demonstrate financial need to qualify for a subsidized loan. The federal government will pay (subsidize) the interest that accrues on subsidized Direct loans while the student is enrolled at least half time and during the grace period. For the 2012-2013 year, the interest rate for the loan is 3.4%. Unsubsidized loans are not need-based, and the student is responsible for paying the interest that accrues until the loan is paid in full. The student can opt to pay the interest while in school or allow it to be capitalized (add to the principal of the loan) when he or she goes into repayment. For the 2012-2013 the interest rate for the loan is 6.8%
Students must have a valid FAFSA on file and be enrolled at least half time to be eligible to borrow the Direct loan. Students will be notified of their Direct loan eligibility via the award notification. Students who wish to borrow the Direct loan must complete a Master Promissory Note (MPN) and entrance counseling. Once the MPN is signed, it is valid for 10 years while attending USF. After the MPN and entrance counseling are completed, students will automatically have loan funds they are eligible for disbursed to their student accounts unless they notify the Office of Financial Aid in writing that they wish to decline all or a portion of the loan.
Students are not required to make payments on Direct Loans while they are enrolled at least half-time (at least 6 credit hours per semester). Students have a six month grace period prior to entering repayment on Federal Direct loans. The grace period begins when the student graduates, drops below half-time, or ceases to be enrolled.
Loan limits for Federal Subsidized and Unsubsidized Direct Loans are as follows:
Undergraduate (Dependent Students)
| Completed Credit Hours | Subsidized Maximum | Unsubsidized Maximum | Total Annual Direct Limit |
|---|---|---|---|
| 1-31 | $3,500 | $2,000 | $5,500 |
| 32-63 | $4,500 | $2,000 | $6,500 |
| 64+ | $5,500 | $2,000 | $7,500 |
"Dependent" students have an undergraduate aggregate lifetime limit of $31,000 (no more than $23,000 of which may be Subsidized) for Direct loan borrowing.
Undergraduate (Independent Students)
| Completed Credit Hours | Subsidized Maximum | Unsubsidized Maximum | Total Annual Direct Limit |
|---|---|---|---|
| 1-31 | $3,500 | $6,000 | $9,500 |
| 32-63 | $4,500 | $6,000 | $10,500 |
| 64+ | $5,500 | $7,000 | $12,500 |
"Independent" students have an undergraduate aggregate limit of $57,500 (no more than $23,000 of which may be Subsidized) for Direct loan borrowing.
Graduate (Independent Students)
All new Direct loans for graduate students will be unsubsidized beginning with loans disbursed after July 1, 2012. The total annual Direct loan limit for graduate students is $20,500. Graduate students have an aggregate lifetime limit of $138,500.