Federal Loan Programs
Direct Subsidized and Unsubsidized Loans for Undergraduate and Graduate Students
Direct Subsidized Loans and Direct Unsubsidized Loans are federal student loans offered by the U.S. Department of Education (ED) to help eligible students cover the cost of higher education at a four-year college or university, community college, or trade, career, or technical school.
To receive either type of loan, you must be enrolled at least half-time at a school that participates in the Direct Loan Program. Generally, you must also be enrolled in a program that leads to a degree or certificate awarded by the school. Direct Subsidized Loans are available only to undergraduate students who have financial need. Direct Unsubsidized Loans are available to undergraduate, graduate, and professional degree students. You are not required to show financial need to receive a Direct Unsubsidized Loan.
Differences Between Direct Subsidized Loans and Direct Unsubsidized Loans
In short, Direct Subsidized Loans have slightly better terms to help students with financial need.
Quick Overview of Direct Subsidized Loans
Who can get Direct Subsidized Loans?
Direct Subsidized Loans are available to undergraduate students with financial need.
How much can you borrow?
Your school determines the amount you can borrow, and the amount may not exceed your financial need.
Who will pay the interest?
The U.S. Department of Education pays the interest on a Direct Subsidized Loan:
- while you’re in school at least half-time,
- 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).
Quick Overview of Direct Unsubsidized Loans
Who can get Direct Unsubsidized Loans?
Direct Unsubsidized Loans are available to undergraduate, graduate, and professional students; there is no requirement to demonstrate financial need.
Note: Award amounts will be reduced if students are enrolled for less than full-time enrollment.
Loan Amount Limits
There are important loan limit changes to be aware of with the signing of the One Big Beautiful Bill Act (OBBBA) on July 4, 2025. Please read the information below carefully.
Your school determines the loan type(s), if any, and the actual loan amount you are eligible to receive each academic year. However, there are limits on the amount in subsidized and unsubsidized loans that you may be eligible to receive each academic year (annual loan limits) and the total amounts that you may borrow for undergraduate, graduate, and professional study (aggregate loan limits). The actual loan amount you are eligible to receive each academic year may be less than the annual loan limit. These limits vary depending on:
- what year you are in school,
- whether you are a dependent or independent student,
- your enrollment status (full-time or less than full-time),
- the program of study in which you’re enrolled, and
- whether you’re eligible for the pre-OBBBA limit.
If you are a dependent student whose parents are not eligible for a Direct PLUS Loan, you may be able to receive additional Direct Unsubsidized Loan funds.
Review our detailed charts explaining the new annual loan limits and the pre-OBBBA exceptions.
Note: The graduate and professional aggregate limit can include up to $65,500 in subsidized loans that were received for periods of graduate enrollment that began before July 1, 2012 (when availability for subsidized loans ended for graduate students). Additionally, the lifetime maximum loan limit for these borrowers can’t exceed $65,500 in subsidized loans inclusive of undergraduate borrowing.
If the total loan amount you receive at the undergraduate, graduate, or professional level exceeds the aggregate limit for that level, you’re not eligible to receive additional loans at that level. However, if you repay some of your loans to bring your outstanding loan debt below the aggregate loan limit for that level, you could then borrow again, up to the amount of your remaining eligibility under the aggregate loan limit for that level.
If the total loan amount you receive over the course of your education reaches the aggregate lifetime loan limit, you are not eligible to receive additional loans.
Graduate and professional students who are eligible for the limited exception and are enrolled in certain health profession programs may receive additional Direct Unsubsidized Loan amounts each academic year beyond those shown in the loan limit charts. For these students, there is also a higher aggregate limit on Direct Unsubsidized Loans. This will only be available through the 2028–29 award year for students eligible for the limited exception. If you are enrolled in a health profession program, talk to the financial aid office at your school for information about annual and aggregate limits.
Who is Eligible
To receive either type of loan, you must be enrolled at least half-time at a school that participates in the Direct Loan Program. Generally, you must also be enrolled in a program that leads to a degree or certificate awarded by the school. Direct Subsidized Loans are available only to undergraduate students who have financial need. Direct Unsubsidized Loans are available to undergraduate, graduate, and professional degree students. You are not required to show financial need to receive a Direct Unsubsidized Loan.
How to Apply
To apply for a Direct Loan, you must first complete and submit the Free Application for Federal Student Aid (FAFSA®) form. Your school will use the information from your FAFSA form to determine how much student aid you are eligible to receive. Direct Loans are generally included as part of your financial aid package.
Who will pay the interest?
You are responsible for paying the interest on a Direct Unsubsidized Loan during all periods.
What are the current interest rates?
The interest rates for Direct Subsidized Loans and Direct Unsubsidized Loans first disbursed on or after July 1, 2025, and before July 1, 2026, are shown in the chart below.
| Undergraduate Borrowers | Graduate or Professional Borrowers |
|---|---|
| 6.39% | 7.94% |
| Direct Subsidized Loans and Direct Unsubsidized Loans | Direct Unsubsidized Loans |
Note: The interest rates shown above are fixed rates for the life of the loan.
Have other questions about interest?
- Understanding interest rates and fees—Find out how interest is calculated.
- Information for military members—If you are a member of the military, you may be eligible for special interest benefits relating to your federal student loans.
What are the loan fees?
All Direct Subsidized Loans and Direct Unsubsidized Loans have a loan fee. The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement. The percentage for all Direct Subsidized and Unsubsidized Loans first disbursed on or after Oct. 1, 2020, is 1.057%. Loans first disbursed before that date had different loan fees.
Steps to Accept a Loan
TLU students will use their Financial Aid Portal to accept, reduce, or decline loans that have been offered to them.
If it is your first time accepting and receiving a Direct Loan, you will be required to:
- complete entrance counseling, a tool to ensure you understand your obligation to repay the loan; and
- sign a loan contract called a Master Promissory Note, agreeing to the terms of the loan.
How Funds are Delivered
The school will first apply your loan funds to your school account to pay for tuition, fees, room and board, and other school charges. If any additional loan funds remain, they will be returned to you. All loan funds must be used for your education expenses. Learn more about the process of receiving federal student aid.
Loan Servicer’s Role
- When you receive your 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, 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 about your first payment due date. Payments are usually due monthly. Learn more about repaying your loan.
Loan Repayment
The repayment plans available to you will depend on when you receive your loan. Your loan servicer can help you understand which repayment options are available to you. Generally, you’ll have 10 to 30 years to repay your loan, depending on the repayment plan that you choose. Learn more about your repayment options.
Loan Deferment and Forbearance
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.
How to Cancel a Loan
Before your loan money is disbursed, you may cancel all or part of your loan at any time by notifying your school. After your loan is disbursed, you may cancel all or part of the loan within certain time frames. Your promissory note and additional information you receive from your school will explain the procedures and time frames for canceling your loan.
Loan Forgiveness or Discharge
Under certain conditions, you may be eligible to have all or part of your loan discharged or forgiven (canceled). Find out about loan cancellation, discharge, or forgiveness.
Find Your Student Loan Information
Visit “My Aid” to view information about all of the federal student loans and other financial aid you have received and to find contact information for the loan servicer for your loans.
Direct PLUS Loans for Parents
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, established new loan limits for the Direct PLUS Loan Program, impacting how much parents can borrow for their eligible dependent undergraduate students. The OBBBA provides a limited exception for certain parent borrowers.
Limited Exception
Eligible Parents: You are a parent borrower who qualifies for the limited exception and are subject to the prior Direct PLUS Loan limits if the dependent undergraduate student on whose behalf you are borrowing the Direct PLUS for:
- was enrolled in a program of study at an institution as of June 30, 2026;
- borrowed a Direct Loan for such program of study prior to July 1, 2026, (or you borrowed a Direct PLUS Loan on behalf of the dependent student for such program of study);
- is currently enrolled at the same institution in the same program of study, and
- has not stopped their enrollment in the same program at the same institution at any point as of July 1, 2026.
Please note that your student can change majors and you will still remain eligible for the limited exception. The student changing credential level will cause you to lose eligibility for the limited exception.
If you are a parent borrower who qualifies for this limited exception, for each academic year you may borrow up to—but not more than—the amount of your student’s estimated cost of attendance minus the amount of any other financial aid received for that academic year. The school determines the cost of attendance using federal guidelines.
Ineligible Parents: If you are a parent borrower who does not qualify for the limited exception, Direct PLUS Loans have an annual loan limit (the maximum amount you can borrow each academic year) and an aggregate loan limit (the maximum loan amount you can borrow for each dependent student’s undergraduate study).
For each academic year beginning on or after July 1, 2026, the maximum amount of all Direct PLUS Loans that may be borrowed by all parents on behalf of each dependent student may not exceed $20,000. The maximum amount for all Direct PLUS Loans that may be borrowed by a parent for a dependent student over the course of their undergraduate study is $65,000 per child regardless of any amounts repaid, forgiven, or discharged.
Note: Regardless of the amount you may be eligible to borrow, your student’s school might limit the amount you may borrow based on their program.
A Direct PLUS Loan is commonly referred to as a Parent PLUS Loan when made to a parent borrower.
Who Is Eligible
To receive a Parent PLUS Loan, you must:
- be the biological or adoptive parent (or in some cases, the stepparent) of a dependent undergraduate student enrolled at least half-time at an eligible school;
- not have an adverse credit history (unless you meet certain additional requirements); and
- meet the general eligibility requirements for federal student aid.
Note: Grandparents (unless they have legally adopted the dependent student) and legal guardians are not eligible to receive Parent PLUS Loans, even if they have had primary responsibility for raising the student.
Loan Interest Rates and Fees
For Direct PLUS Loans first disbursed on or after July 1, 2025, and before July 1, 2026, the interest rate is 8.94%. This is a fixed interest rate for the life of the loan.
Additionally, there is a loan fee on all Direct PLUS Loans. The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement. The percentage for all Direct PLUS Loans first disbursed on or after Oct. 1, 2020, is 4.228%.
Loan Amount Limits
The table below outlines the loan limits for Parent PLUS Loans.
| Parents eligible for the limited exception | The maximum PLUS loan amount you can borrow is the cost of attendance at the school your child will attend minus any other financial assistance your child receives. The cost of attendance is determined by the school. |
| Parents NOT eligible for the limited exception* | The maximum amount of all Direct PLUS Loans that you (and all other parents) may borrow on behalf of each dependent student may not exceed $20,000. |
When to Make Loan Payments
If you request a deferment, you will not need to make payments while your child is enrolled at least half-time and for an additional six months after your child graduates, leaves school, or drops below half-time enrollment. If the school your child is attending requires you to submit your request for a Parent PLUS Loan at StudentAid.gov, you’ll have the option of requesting a deferment as part of the loan request process. You can also contact your loan servicer to request a deferment.
If you do not request a deferment, you will be expected to begin making payments after the loan is fully disbursed (paid out).
During periods of deferment, interest will accrue on your loan. You may choose to pay the accrued interest or allow the interest to be capitalized (added to your loan principal balance) when you have to start making payments. Your loan servicer will notify you when your first payment is due.
Adverse Credit History Options
A credit check will be performed during the application process. If you have an adverse credit history, you may still receive a Parent PLUS Loan through one of these two options:
- Obtaining an endorser who does not have an adverse credit history. An endorser is someone who agrees to repay the Parent PLUS Loan if you do not repay it. The endorser cannot be the child on whose behalf you are borrowing.
- Documenting to the satisfaction of the U.S. Department of Education that there are extenuating circumstances relating to your adverse credit history.
With either option 1 or option 2, you also must complete credit counseling for Parent PLUS Loan borrowers. You may also wish to read this article to learn more about what to do if you are denied a PLUS loan based on an adverse credit history.
If you are unable to obtain a Parent PLUS Loan, your child may be eligible for additional unsubsidized loans. Your child should contact the school’s financial aid office for more information. Important: If you’ve met the annual or aggregate Parent PLUS Loan limit for your child, that doesn’t make the child eligible for additional unsubsidized loans.
How to Apply
Go to the online Direct PLUS Loan Application for Parents.
Most schools (including TLU) require you to apply for a Direct PLUS Loan online.
Note: Before applying for a Parent PLUS Loan, make sure your child has filled out the FAFSA form.
Steps to Receive a Loan
If you are eligible for a Parent PLUS Loan, you will be required to sign a Direct PLUS Loan Master Promissory Note (MPN), agreeing to the terms of the loan.
TLU will also email the parent (to the email address on the PLUS application) a PLUS Loan Acceptance Form that must be signed and returned to Student Financial Services before the loan will be processed.
If you’re taking out Parent PLUS Loans for more than one child, you’ll need to sign separate Direct PLUS Loan MPNs for the loans you receive for each child.
How Funds Are Delivered
The school will first apply Parent PLUS Loan funds to the student’s school account to pay for tuition, fees, room and board, and other school charges. If any loan funds remain, your child’s school will give them to you to help pay other education expenses for the student. With your authorization, the school can pay the remaining loan funds directly to the student. Get more information about receiving aid.
Loan Servicer’s Role
After you receive your Parent PLUS Loan, you will be contacted by your loan servicer (you will repay your loan to the loan servicer). Your loan servicer will provide regular updates on the status of your Parent PLUS Loan.
Loan Repayment Plans
On July 4, 2025, the One Big Beautiful Bill Act was signed into law, resulting in significant changes to federal student aid programs including repayment plans. We are working to update this information. In the meantime, stay current on the big updates.
Parent PLUS borrowers are eligible for the following repayment plans if the parent borrower has no loans disbursed on or after 7/1/26:
Important: For a limited time, parent borrowers can become eligible for the Income-Contingent Repayment Plan by consolidating their Parent PLUS Loans into a Direct Consolidation Loan. The loans must be consolidated and disbursed by July 1, 2026. To meet that date, parents should complete the Consolidation Loan application by the end of April 2026. Once on the ICR Plan and after at least one payment is made while on the ICR plan, parents can then access the Income-Based Repayment Plan.
If a borrower takes out or consolidates a Parent PLUS Loan after July 1, 2026, they will only be eligible for the Tiered Standard Plan and will not have access to any income-driven repayment plans or to Public Service Loan Forgiveness.
Use the Loan Simulator to get an early estimate of what your monthly payment amount would be under the plans for which you’re eligible.
Loan Deferment and Forbearance
If you are unable to make your scheduled loan payments, contact your loan servicer immediately. Your 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 and forbearance options.
Can the Loan Be Transferred to the Student?
No, a Direct PLUS Loan made to a parent cannot be transferred to the child. You, the parent borrower, are legally responsible for repaying the loan.
How to Cancel a Loan
Before your loan money is disbursed, you may cancel all or part of your loan at any time by notifying your child’s school. After your loan is disbursed, you may cancel all or part of the loan within certain time frames. Your promissory note and additional information you’ll receive from the school will explain the procedures and time frames for canceling your loan.
Loan Forgiveness and Discharge
Under certain conditions, you may be eligible to have all or part of your loan forgiven (canceled) or discharged. Find out about loan forgiveness, cancellation, and discharge.
Find Your Parent PLUS Loan Information
Visit “My Aid” to view information about all of the federal student loans and other financial aid you have received and to get contact information for your loan servicer.
Direct PLUS Loans for Graduate or Professional Students
The One Big Beautiful Bill Act (OBBBA) establishes new loan limits for the Direct PLUS Loan Program and will gradually end PLUS loan eligibility for graduate and professional students. The law defines an exception that allows eligible graduate and professional students to continue borrowing Direct PLUS Loans during their expected time to credential.
Starting July 1, 2026, “expected time to credential” means how long it should take you to finish your program. This amount of time is whichever is the shorter:
- three academic years, or
- the remaining length of your program, based on how long the program is and how much of it you’ve already completed.
Limited Exception
Eligible Students: If you are a graduate or professional student, you may be eligible to borrow a Direct PLUS Loan under the limited exception for your expected time to credential only if you:
- were enrolled in a program of study at a school as of June 30, 2026;
- borrowed a Direct Loan for that program of study prior to July 1, 2026;
- are currently enrolled at the same school in the same program of study, and
- haven’t had any break in your enrollment in the same program and the same school at any time as of July 1, 2026. [An approved leave of absence isn’t considered a break in your enrollment.]
Ineligible Students: Graduate and professional students who don’t (or no longer) qualify for this limited exception are not eligible to borrow Direct PLUS Loans.
A graduate student is defined as a student enrolled in a program of study that is above the baccalaureate level and awards a graduate credential (other than a professional degree) upon completion of the program.
A professional student is defined as a student enrolled in a program of study that awards a professional degree upon completion of the program. A professional student may not receive Title IV aid as an undergraduate student for the same period of enrollment.
A Direct PLUS Loan is commonly referred to as a Grad PLUS loan when made to a graduate or professional student.
Who Is Eligible
To receive a Grad PLUS loan, you must:
- qualify for the limited exception established in the OBBBA and outlined above;
- be a graduate or professional student enrolled at least half-time at an eligible school in a program leading to a graduate or professional degree or certificate;
- not have an adverse credit history (unless you meet certain additional eligibility requirements), and
- meet the general eligibility requirements for federal student aid.
Loan Interest Rates and Fees
For Direct PLUS loans first disbursed on or after July 1, 2025, and before July 1, 2026, the interest rate is 8.94%. This is a fixed interest rate for the life of the loan.
Additionally, there is a loan fee on all Direct PLUS loans. The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement. The percentage for all Direct PLUS loans first disbursed on or after Oct. 1, 2020, is 4.228%. Loans first disbursed before that date had different loan fees.
Loan Amount Limits
The maximum PLUS loan amount you can borrow is the cost of attendance (determined by the school) minus any other financial assistance you receive.
When to Make Loan Payments
You’ll receive an automatic deferment while you’re enrolled in school at least half-time, and for an additional six months after you graduate, leave school, or drop below half-time enrollment. You don’t have to start making payments until after this deferment period ends.
During periods of deferment, interest will accrue on your loan. You may choose to pay the accrued interest or allow the interest to be capitalized (added to your loan principal balance) when you have to start making payments. Your loan servicer will notify you when your first payment is due.
Adverse Credit History Options
A credit check will be performed during the application process. If you have an adverse credit history, you may still receive a Grad PLUS loan through one of these two options:
- obtaining an endorser who does not have an adverse credit history. An endorser is someone who agrees to repay the Grad PLUS loan if you do not repay it, or
- documenting to the satisfaction of the U.S. Department of Education that there are extenuating circumstances relating to your adverse credit history.
With either option 1 or option 2, you must also complete credit counseling for PLUS loan borrowers. You may also wish to read this article to learn more about what to do if you are denied a PLUS loan based on an adverse credit history.
How to Apply
Go to the online Direct PLUS Loan Application for Graduate/Professional Students.
Important: Most schools require you to apply for a Direct PLUS Loan online, but some schools have different application processes. This site has a list of schools that participate in the Direct Loan Program. When you select your school from the list, the site will tell you if the school has a different application process. In that case, check with the school’s financial aid office to find out how to request a Grad PLUS loan.
Note: Before applying for a Grad PLUS loan, you must complete the FAFSA form.
Steps to Receive a Loan
If you are eligible for a Grad PLUS loan, you will be required to sign a Direct PLUS Loan Master Promissory Note (MPN), agreeing to the terms of the loan. If you haven’t previously received a PLUS loan, you will also be required to complete entrance counseling. Contact the financial aid office at the school you are planning to attend for instructions on how to complete entrance counseling.
How Funds Are Delivered
The school will first apply Grad PLUS loan funds to your school account to pay for tuition, fees, room and board, and other school charges. If any loan funds remain, your school will give them to you to help pay other education expenses. Get more information about receiving aid.
Loan Servicer’s Role
After you receive your Grad PLUS loan, you will be contacted by your loan servicer (you will repay your loan to the loan servicer). Your loan servicer will provide regular updates on the status of your Grad PLUS loan.
Loan Repayment Plans
The repayment plans available to you will depend on a number of factors, including when you receive your loan. Your loan servicer can help you understand which plans you’re eligible for. Generally, you’ll have 10 to 30 years to repay your loan, depending on the repayment plan that you choose. Learn about your repayment options.
Use the Loan Simulator to get an early estimate of what your monthly payment amount would be under the plans for which you’re eligible.
Loan Deferment and Forbearance
If you are unable to make your scheduled loan payments, contact your loan servicer immediately. Your 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 and forbearance options.
Before your loan money is disbursed, you may cancel all or part of your loan at any time by notifying the school. After your loan is disbursed, you may cancel all or part of the loan within certain time frames. Your promissory note and additional information you’ll receive from the school will explain the procedures and time frames for canceling your loan.
Loan Forgiveness and Discharge
Under certain conditions, you may be eligible to have all or part of your loan forgiven (canceled) or discharged. Find out about loan forgiveness, cancellation, and discharge.
Find Your Grad PLUS Loan Information
Visit “My Aid” to view information about all of the federal student loans and other financial aid you have received and to get contact information for your loan servicer.
Private/Alternative Loans
Private student loans provided by banks, credit unions, and other lenders can help bridge the gap between the financial aid you have already received for college and the total cost of attendance.
ELMSelect is a transparent, lender neutral, free service. Lenders provide the loan information available for comparison. You decide what private student loan makes the most sense for you. Lenders in ELMSelect give you the option to apply for private student loans from their lender products.