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Federal Direct Subsidized and Unsubsidized Loans

A loan is money you borrow and must pay back with interest. Borrowing can be costly. We recommend you consider borrowing only if you have exhausted all other options and only borrow what you need. Make a budget for yourself to keep your debt within manageable limits. An undergraduate financial aid offer may include a combination of Federal Direct Subsidized and Unsubsidized loans. 

Some loans are need-based; others are available to any enrolled student. Although loan terms may vary, Temple uses a scheduled academic year that begins with the fall semester. The academic year is 30 weeks in length and is defined as fall semester (15 weeks), spring semester (15 weeks) with summer sessions as a trailer. 

Subsidized Loans

Subsidized loans are made to eligible undergraduate students who have demonstrated financial need (determined by filing FAFSA) to help cover the costs of higher education.  The federal government pays the interest on the loan during:

  • your enrollment in school on at least a half time (6 credits or more) basis;
  • a six-month grace period immediately following your separation from school; and
  • a deferment, which is a temporary, authorized time when your payments may be postponed.

Unsubsidized Loans

Unsubsidized loans are made to eligible undergraduate, graduate, and professional students, but in this case, the student does not have to demonstrate financial need to be eligible for the loan. You are responsible for paying all interest on the loan.

Interest is charged beginning the day the loan is paid to you until the day the loan is repaid in full. You either may choose to pay the accumulated interest while you are in school, or to have the unpaid, interest capitalized, i.e., added to the principal balance of the loan. NOTE: If your loan interest is capitalized, it will increase the amount you have to repay.

Eligibility

Meet Temple University Financial Aid eligibility requirements.

Annual and Maximum Federal Direct Loan Limits

The amount of Federal Direct Loan funds that you are eligible to borrow each academic year is limited by your grade level (total completed credits), whether you are a dependent or an independent student, your financial need and your cost of attendance. You cannot borrow more than your cost of attendance for the academic year. 

Annual Loan Limits

Grade Level

(total completed credits)

Dependent Students

(except students whose parents are unable to obtain a PLUS loan)

Independent Students (and Dependent Students whose parents are unable to obtain PLUS loans)

 

1st year undergraduate (0-29 credits)

$5500

No more than $3500 of this amount may be in subsidized loans

$9500

No more than $3500 of this amount may be in subsidized loans

2nd year undergraduate (30-59 credits)

$6500

No more than $4500 of this amount may be in subsidized loans

$10,500

No more than $4500 of this amount may be in subsidized loans

 
3rd year undergraduate and beyond (60-122+ credits)

$7500 per year

No more than $5500 of this amount may be in subsidized loans

 

$12,500 per year

No more than $5500 of this amount may be in subsidized loans

 
Graduate or professional Degree students
not applicable
$20,500 per year
 
Preparatory coursework for entry into an undergraduate degree program
$2625 subsidized loan

$8625

No more than $2625 of this amount may be in subsidized loans

 
Preparatory coursework for entry into a graduate/professional program or teacher certification coursework
$5500

$12,500

No more than $5500 of this amount may be in subsidized loans

 
Maximum total debt from Subsidized and Unsubsidized Loans

$31,000

No more than $23,000 of this amount may be in subsidized loans

Undergraduates: $57,500

No more than $23,000 of this amount may be in subsidized loans
 

Graduate or Professional Students: $138,500

No more than $65,500 of this amount may be in subsidized loans. The graduate debt limit includes all federal loans received for undergraduate study.

Allopathic medicine and other graduate students in certain health professions: $224,000

No more than $65,500 of this amount may be in subsidized loans. The graduate debt limit includes all federal loans received for undergraduate study.

 

Learn more about borrowing levels for subsidized and unsubsidized loans.

Accept and Receive Your Federal Direct Loans

Temple University students must accept offered Federal Direct loans online in the Financial Aid section of Self-Service Banner in the TUportal after receiving email notification that the financial aid award is ready for review.

New Federal Direct loan borrowers must complete a Master Promissory Note and Entrance Interview

Interest Rates and Fees

If you receive a federal student loan, you will be required to repay that loan with interest.  It is important that you understand how interest is calculated and the fees associated with your loan.  Both of these factors will impact the amount you will be required to repay.

Subsidized vs Unsubsidized Loans
  Subsidized Direct Loan Unsubsidized Direct Loan
Demonstration of Financial Need Must demonstrate need Not need-based
Interest Accrual
The federal government pays the interest on the loan while you are enrolled in school at least half time (6 credits), for the first six months after you leave school (referred to as a grace period*) and during a period of deferment (a postponement of loan payments).
 
 
Interest begins accumulating as soon as funds are disbursed until the loan is paid in full. If you choose not to pay the interest while you are in school and during grace periods and deferment or forbearance periods, your interest will accrue (accumulate) and be capitalized (that is, your interest will be added to the principal amount of your loan).
 
NOTE: You are not required to pay the interest while you are in school, but Student Financial Services recommends you do.
Undergraduate Interest Rate

4.29% (for loans first disbursed on or after 7/1/15 and before 7/1/16)

3.76% (for loans first disbursed on or after 7/1/16 and before 7/1/17)

4.29% (for loans first disbursed on or after 7/1/15 and before 7/1/16)

3.76% (for loans first disbursed on or after 7/1/16 and before 7/1/17)

Graduate Fixed Interest Rate As of fall 2012, graduate students are no longer eligible for subsidized loans

5.84% (for loans first disbursed on or after 7/1/15 and before 7/1/16)

5.31% (for loans first disbursed on or after 7/1/16 and before 7/1/17)

Origination Fees

1.068% for loans disbursed on or after October 1, 2015 and before October 1, 2016

 

1.068% for loans disbursed on or after October 1, 2015 and before October 1, 2016

 

If you are a member of the military, you may be eligible for special interest benefits relating to your federal student loans. More information about aid for military families.

Learn more about interest rates and fees for subsidized and unsubsidized loans .

Net vs. gross Federal Direct Loan amounts

The Direct Subsidized and Unsubsidized loan fee will be proportionately deducted from each loan disbursement.

Your Federal Direct loan amount on the financial aid award offer will be listed as the gross loan amount while the Bursar e-bill on TUpay will list the net loan amount. The Bursar tuition e-bills will reflect the net amount after the loan origination fees have been deducted. Once you have accepted your loan on Self-Service Banner in the TUportal and made the minimum payment on the first semester Bursar e-bill, funds will automatically disburse to your student account after classes begin.

Decrease or cancel your Federal loans

To decrease or cancel your Federal loans, log into the Financial Aid section of Self-Service Banner in the TUportal, submit the Student Financial Services Authorization to Reduce or Cancel Federal Loan form to SFS or send an email to SFS (sfs@temple.edu) from your TUmail account including your full name, TUID and exact semester/year amount to cancel or reduce.

After your loan is disbursed, you may cancel all or part of the loan within certain time frames. Your promissory note and Student Financial Services office will explain the procedures and time frames for canceling your loan.

Loan proration for graduating undergraduate students

If you are a graduating senior and only attending one semester, your Federal Direct loans may be prorated based on the number of credits for which you are enrolled. This means that you may not be eligible to receive your maximum annual loan limit.

This affects students enrolled for only one final semester in an academic year: either fall-only, spring-only, or summer-only. For example, this will not affect students who are enrolled in fall and spring semesters and graduate at the end of the spring semester.

Federal Direct Loan Repayment

When you receive your first Direct Loan, you will be contacted by your loan servicer (you repay your loan to the loan servicer). Your loan servicer will provide regular updates on the status of your Direct Loan, and any additional Direct Loans that you receive. 

After you graduate, leave school, or drop below half-time enrollment (less than 6 credits for undergraduate and less than 4.5 credits for graduate students), you will have a six-month grace period before you are required to begin repayment. During this period, you'll receive repayment information from your loan servicer, and you'll be notified of your first payment due date. Payments are usually due monthly.

To calculate estimated loan payments, use the Direct Loan Repayment Calculator.

There are several repayment options available that are designed to meet the individual needs of borrowers. Your loan servicer can help you understand which repayment options are available to you. Generally, you’ll have 10 to 25 years to repay your loan, depending on the repayment plan that you choose. Learn more about your repayment options.

If you are unable to make your scheduled loan payments, contact your loan servicer immediately. Your loan servicer can help you understand your options for keeping your loan in good standing. For example, you may wish to change your repayment plan to lower your monthly payment or request a deferment or forbearance that allows you to temporarily stop or lower the payments on your loan. Learn more about deferment or forbearance options.

Under certain conditions, you may have all or part of your loan canceled, discharged, or forgiven. Find out about loan cancellation, discharge, or forgiveness.   

Understand Default

NEVER ignore delinquency or default notices from your loan servicer.  If you don’t make your monthly loan payments, you will become delinquent on your student loan and risk going into default. Contact your servicer immediately if you are having trouble making payments or won't be able to pay on time. Find out what may happen if you default, what steps you can take to keep your loan from going into default, and what your options are for getting out of default. Learn about federal student loan default.

Resolving Disputes

If you have a dispute about your loan, you may be able to resolve it by simply contacting your loan servicer and discussing the issue. If you need additional help, find out what you can do to be better prepared before you seek help to resolve a dispute.