A loan is money you can borrow but must repay with interest. Borrowing can be costly so we recommend you consider borrowing only if you have exhausted all other options, and to only borrow what you need. You should start by making a budget for expenses for the year to determine if you need funds above the current aid offer.
Some loans are need-based while others are available to any enrolled student. An undergraduate financial aid offer may include a combination of Federal Direct Subsidized and Unsubsidized loans.
Subsidized loans are offered to eligible undergraduate students who have demonstrated financial need determined by the 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 the student's separation from school; and
- a deferment, which is a temporary, authorized time when payments may be postponed.
Unsubsidized loans are offered to eligible undergraduate, graduate, and professional students, but the you do not have to demonstrate financial need to be eligible for the loan.
Interest is charged with the first disbursement until the day the loan is repaid in full. You may either 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 the loan interest is capitalized, it will increase the amount of the loan to be repaid.
Annual and Maximum Federal Direct Loan Limits
The amount of Federal Direct Loan funds you are eligible to borrow each academic year is limited by your grade level (total earned credits), your dependency status, your financial need and your cost of attendance. You cannot borrow more than you cost of attendance for the academic year. The annual cost of attendance is included on your financial aid offer.
There are lifetime limits on how much you may borrow over the course of your undergraduate education. These amounts are determined by your dependent status. Dependent students are limited to borrowing no more than $31,000, of which no more than $23,000 may be in subsidized loans. Independent students are limited to borrowing no more than $57,500, of which no more than $23,000 may be in subsidized loans.