Federal Direct Loans For Undergraduates

The Office of Financial Aid encourages students to explore various grants and scholarship opportunities and to evaluate loan options carefully. Borrow only what is really needed and remember that loans must be repaid. Both loans require the completion of the Federal Application for Federal Student Aid FAFSA to determine a student’s financial need. The subsidized Direct Loan is for students who have a demonstrated financial need, as determined by the FAFSA. The unsubsidized Direct Loan is a non-need-based loan.

Recipients of a Federal Direct Loan are required to complete entrance counseling before the funds are disbursed. Students must also complete exit counseling upon dropping below half-time status, withdrawing or graduating

What is a Federal Direct Student loan?

Federal Direct Student loans are one form of student “self help” financial aid. Through the federal Direct Student loan program students borrow money for college from the federal government.

How much can I borrow?

  • $5,500.00 is the maximum annual amount a first year student is eligible for, no more than $3,500 of which can be subsidized.
  • $6,500.00 is the maximum annual amount a second year student is eligible for, no more than $4,500.00 of which can be subsidized.
  • $7,500.00 is the maximum annual amount a third or fourth year student is eligible for, no more than $5,500 of which can be subsidized.
  • Independent students and students whose parent(s) are denied a Federal PLUS Loan qualify for additional unsubsidized loans.

— Borrowing Limits for Direct Stafford Loans —

Subsidized Loan Base Amount

Additional Unsubsidized Loan Amount
(as of July 1, 2013)

For All Undergraduates

For Graduate Students*

For Dependent

For Independent

First Year



$2,000 ($5,500 total)

$6,000 ($9,500 total)




$2,000 ($6,500 total)

$6,000 ($10,500 total)

Third Year
and Beyond



$2,000 ($7,500 total)

$7,000 ($12,500 total)

Subsidized Loan Debt Limit

Total Loan Debt Limit (Subsidized* + Unsubsidized)


$65,500; limit includes Direct
Loans received as an undergraduate

(only $23,000 can be subsidized)

(only $23,000 can be Subsidized Loan)


What is the difference between a Direct Subsidized and a Direct Unsubsidized Loan?

The Federal Government pays the interest for Direct Subsidized Loans while the student is in college or while the loan is in deferment. Interest begins accruing for Direct Unsubsidized Loans as soon as the loan is taken out.
How much can I borrow?

For subsidized loans, the maximum is $3,500 for freshmen, $4,500 for sophomores, and $5,500 for juniors and seniors. Undergraduates who are not eligible for Direct Subsidized Loans may borrow an identical amount in a Direct Unsubsidized Loan. Undergraduates may also borrow an additional $2,000 in a Direct Unsubsidized Loan after they have exhausted their initial subsidized/unsubsidized eligibility. Graduate students may borrow a Direct Unsubsidized Loan for up to $20,500.
Undergraduates may not borrow subsidized loans in excess of their financial need (the difference between the cost of attending Drew and our estimate of your contribution to you or your child’s education). No student may borrow unsubsidized loans in excess of his/her cost of attendance.

What are the interest rates?

Direct Loan Interest Rates for 2018-2019

The chart below shows the interest rates for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed on or after
July 1, 2018 and before July 1, 2019.

Interest Rates for
Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans
First disbursed on or after July 1, 2018 and before July 1, 2019
Loan Type10-Year Treasury Note High YieldAdd-OnFixed Interest Rate
Direct Subsidized Loans and Direct Unsubsidized Loans for Undergraduate Students2.995%2.05%5.05%
Direct PLUS Loans for Parents of Dependent Undergraduate Students and for Graduate or Professional Students2.995%4.60%7.60%

Origination Fee

The table below reflects the origination fee percentages based on the first disbursement date for Direct Subsidized Loan, Direct Unsubsidized Loan, and Direct PLUS Loan awards

For any loan disbursement for a loan where the first disbursement is/will be…The origination fee percentage for Direct Subsidized Loans and Direct Unsubsidized Loans is…The origination fee percentage for Direct PLUS Loans is…
On or after October 1, 2017 and before October 1, 20181.0664.264
On or after October 1, 2018 and before October 1, 20191.0624.248

When are the payments due?

Repayment begins six months after leaving college, payments are made monthly, and you have ten years to repay the loan.

B. CBT College Institutional Loans

Institutional loans are provided by educational institutions as a way to help bridge the gap left by state and federal funds, as these funds are sometimes short of covering the entire cost of a college education. Funds are awarded to eligible students as part of the Financial Aid award process. Institutional loan options will be presented to the student with the financial aid estimates when other types of federal and institutional financing options have been exhausted.

  1. Loan Limits: There are no loans limits since it is based on the cost of the program and the gap that will be generated after taking into account other financial options. However, the loans cannot exceed an accumulated total amount of $3000.
  2. Interest Rate: There’s no interest rate applied on a loan if this payment is made before the graduation date. If the payments are extended after Graduation then a 5% rate will apply for the remaining balance on the principal.
  3. Loan Payments: Payments for an institutional loan is are due within the five first days of the month. If the student extended the payments after graduation, a new payment schedule containing the number of payments, interest rate, date of the first payment, and frequency of payments will be provided. Monthly payment amount depends on the amount borrowed.
  4. Minimum Payments: The minimum payment for a loan will be $50 to $150 per month based on the amount of the loan.
  5. Maximum Time Length: The maximum length of time for repayment of all loans is 5 years.

period: Institutional loan do not have a grace period.