The subsidized loan is awarded to students who demonstrate financial need by filing the Free Application for Federal Student Aid (FAFSA). The federal government pays the interest on these loans while the student is in school at least half-time and during certain periods, such as grace and deferment.

Students who are first-time borrowers of the Federal Direct Stafford Loans, must complete an electronic Master Promissory Note (MPN) and on-line Entrance Loan Counseling to receive the funds. In most cases, the student will be required to complete the MPN and entrance counseling session only once during their years in college.  Each year students will need to accept their loan(s) on the Financial Aid To Do List page in MyUI.

Obtain information regarding grace periods and repayment plans from the Federal Student Aid website.

Important information for graduate and professional students:  The interest subsidy has been eliminated on Federal Direct Student Loans for periods of enrollment beginning on or after July 1, 2012. To find out how this may impact you, go to our Graduate and Professional Federal Direct Loans web page.

Lender:  Federal Government

Interest Rate - Undergraduate Students

  • Fixed at 5.50% for loans disbursed July 1, 2023 - June 30, 2024
  • Fixed at 4.99% for loans disbursed July 1, 2022 - June 30, 2023
  • Fixed at 3.73% for loans disbursed July 1, 2021 - June 30, 2022
  • Fixed at 2.75% for loans disbursed July 1, 2020 - June 30, 2021

Interest-Free in School:  Yes

Loan Fee

  • 1.057% for loans disbursed October 1, 2020 - September 30, 2024
  • 1.059% for loans disbursed October 1, 2019 - September 30, 2020

Annual Maximums
(If you change grade levels mid-year, you may be eligible for an increase in your loan amount.)

  • $3,500 freshman (0-29 earned hours)
  • $4,500 sophomore (30-59 earned hours)
  • $5,500 junior and senior (60+ earned hours)

Cumulative Maximums

  • $23,000 undergraduate
  • $65,500 graduate (includes amount borrowed as undergraduate)

Grace Period:  6 months