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Federal Direct Student Loans

If you plan on borrowing for college, federal student loans are the most common – and usually the best – loan options.

A Federal Direct Loan (subsidized and unsubsidized) is a fixed interest loan made to students by the U.S. Department of Education. Federal Direct Loans are based on the cost of attendance (as determined by St. Thomas) minus any other financial aid, such as scholarships, grants and work-study funds the student is receiving.

All students who are interested in receiving Federal Loans must submit the Free Application for Federal Student Aid (FAFSA) annually.

Processing Requirements

If you do accept a federal student loan, there are a couple things you have to do before you can receive the funds. See Loan Processing Requirements for more information.

Direct Loan Details

  • Eligibility
  • Subsidized & Unsubsidized
  • Interest Rates & Fees
  • Borrowing Limits
  • Eligibility Requirements

    Generally, students are eligible if they:

    • Are a U.S. citizen or eligible noncitizen.
    • Have a valid Social Security number.
    • Are registered with Selective Service.
    • Are enrolled or accepted for enrolment in a degree or certificate program.
    • Are enrolled at least half-time in your program of study.
    • Maintain satisfactory academic progress.
    • Have filed a Free Application for Federal Student Aid (FAFSA) for the academic year.
    • Are not in default on a federal student loan or owe money on a federal student grant.

    Subsidized & Unsubsidized

    Federal Direct Subsidized Loans are need-based with interest paid by the federal government while the student is enrolled at least half-time (minimum of 6 credits). The amount of your Federal Direct Loan that is subsidized depends upon the results of your FAFSA and other financial aid that you may be offered.

    For new Subsidized Direct Loans, disbursed on or after July 1, 2014, the federal government will also pay the interest through the six-month grace period.

    Interest on unsubsidized loans accrues prior to repayment. The student has the option to make interest-only payments while they attend college or to defer payment (capitalization rules may apply).

    Interest Rates & Fees

    • Interest Rate: 6.53% (This fixed rate is effective July 1, 2024 through June 30, 2025.)
    • The federal loan origination fee is 1.057%. This fee is deducted from each disbursement.

    Annual Borrowing Limits

    • First-Year → $5,500 - no more than $3,500 will be subsidized plus additional $4,000 unsubsidized if student is independent
    • Sophomore → $6,500 - no more than $4,500 will be subsidized plus additional $4,000 unsubsidized if student is independent
    • Junior → $7,500 - no more than $5,500 will be subsidized plus additional $5,000 unsubsidized if student is independent
    • Senior → $7,500 - no more than $5,500 will be subsidized plus additional $5,000 unsubsidized if student is independent

    Eligibility

    Eligibility Requirements

    Generally, students are eligible if they:

    • Are a U.S. citizen or eligible noncitizen.
    • Have a valid Social Security number.
    • Are registered with Selective Service.
    • Are enrolled or accepted for enrolment in a degree or certificate program.
    • Are enrolled at least half-time in your program of study.
    • Maintain satisfactory academic progress.
    • Have filed a Free Application for Federal Student Aid (FAFSA) for the academic year.
    • Are not in default on a federal student loan or owe money on a federal student grant.

    Subsidized & Unsubsidized

    Subsidized & Unsubsidized

    Federal Direct Subsidized Loans are need-based with interest paid by the federal government while the student is enrolled at least half-time (minimum of 6 credits). The amount of your Federal Direct Loan that is subsidized depends upon the results of your FAFSA and other financial aid that you may be offered.

    For new Subsidized Direct Loans, disbursed on or after July 1, 2014, the federal government will also pay the interest through the six-month grace period.

    Interest on unsubsidized loans accrues prior to repayment. The student has the option to make interest-only payments while they attend college or to defer payment (capitalization rules may apply).

    Interest Rates & Fees

    Interest Rates & Fees

    • Interest Rate: 6.53% (This fixed rate is effective July 1, 2024 through June 30, 2025.)
    • The federal loan origination fee is 1.057%. This fee is deducted from each disbursement.

    Borrowing Limits

    Annual Borrowing Limits

    • First-Year → $5,500 - no more than $3,500 will be subsidized plus additional $4,000 unsubsidized if student is independent
    • Sophomore → $6,500 - no more than $4,500 will be subsidized plus additional $4,000 unsubsidized if student is independent
    • Junior → $7,500 - no more than $5,500 will be subsidized plus additional $5,000 unsubsidized if student is independent
    • Senior → $7,500 - no more than $5,500 will be subsidized plus additional $5,000 unsubsidized if student is independent