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Federal Direct Subsidized & Unsubsidized Loans
What are Federal Direct Student Loans?
Federal Direct Student Loans are long-term, low interest loans from the U.S. Department of Education. Most students are eligible to borrow these loans because they don't require a credit check. There are two types of these loans:
- Direct Subsidized Loans
- Direct Unsubsidized Loans
The differences are their financial need requirements and when interest charges start accruing. Graduate students can’t borrow subsidized loans.
Direct Subsidized Loans
Direct Subsidized Loans require Financial Need and undergraduate status. For subsidized loans, no interest charges accrue and no principal payments are due until the end of your six-month grace period, which begins when you graduate, leave the university or drop below half-time enrollment.
Direct Unsubsidized Loans
Direct Unsubsidized Loans do not require Financial Need. Interest on unsubsidized loans begins the day the loan is disbursed and continues until it is repaid in full. You can pay the accumulating interest while you are in school, during the grace period or during deferment; or you can choose to capitalize the interest (adding unpaid, accumulated interest to the total amount borrowed when you begin repayment). Capitalizing interest postpones interest payments but increases borrowing costs.
Your aid offers may include a combination of subsidized and unsubsidized loans. Always borrow the subsidized portion first because of the interest terms above.
Eligibility Requirements
- You must meet all the Eligibility Requirements for federal aid.
- Subsidized Loans require Financial Need.
- Unsubsidized Loans do not require Financial Need.
Application Process
To apply for these loans, you must repeat all these steps every academic year.
- Complete a Free Application for Federal Student Aid (FAFSA).
- In March-April of each year, we start sending Financial Aid Notifications to FAFSA applicants.
- Next, follow the instructions for Accepting Aid.
Loan Disbursement Fees
The loan amounts disbursed and applied to your TU bill will be slightly less than the amounts you borrow because these federal disbursement fees will be deducted from your loan disbursements.
| LOAN TYPE | First Disbursed 10/1/20 to 9/30/27 |
|---|---|
| Direct Subsidized & Unsubsidized Loans | 1.057% |
| PLUS Loans | 4.228% |
Loan Limits
The maximum amounts you can borrow per year depend on your FAFSA Dependency Status and your grade level (freshman - senior) based on your earned units toward graduation.
Starting with the fall 2026 term, if you enroll part-time, we must prorate all the annual limits below based on your part-time enrollment level. If you will enroll part-time, please carefully review the new Federal Loan Proration Rules.
Subsidized loans require financial need. Students without sufficient financial need can still borrow the same Maximum Total Direct Loans, but more or all your loans will be Unsubsidized. Graduate students can only borrow Unsubsidized Loans.
Annual Limits — Dependent Undergrads
|
Grade Level Units earned |
Maximum Subsidized Loan | Additional Unsubsidized Loan | Maximum Total Direct Loans |
|---|---|---|---|
| Freshman 0-29 |
$3,500 | $2,000 | $5,500 |
| Sophomore 30-59 | $4,500 | $2,000 | $6,500 |
| Junior/Senior 60+ | $5,500 | $2,000 | $7,500 |
Annual Limits — All Independent Students
| Grade Level Units earned | Maximum Subsidized Loan | Additional Unsubsidized Loan | Maximum Total Direct Loans |
|---|---|---|---|
| Freshman 0-29 | $3,500 | $6,000 | $9,500 |
| Sophomore 30-59 | $4,500 | $6,000 | $10,500 |
| Junior/Senior 60+ | $5,500 | $7,000 | $12,500 |
| Graduate Students | NA | $20,500 | $20,500 |
Aggregate Undergraduate Limits
| Students | Maximum Subsidized LOANS | Additional Unsubsidized LOANS | Total Direct Loans |
|---|---|---|---|
| Dependent Undergraduates | $23,000 | $8,000 | $31,000 |
| Independent Undergraduates | $23,000 | $34,500 | $57,500 |
Aggregate Graduate Student Limits
The graduate aggregate limits have changed, but students who meet the legacy rules below must continue borrowing under the old legacy limits. For all students who are subject to the new limits, all your previous loans count against those limits.
Graduate new AGGREGATE Limits
- Aggregate Unsubsidized Loan Limit: Your total federal subsidized and unsubsidized borrowed as a graduate student can’t exceed $100,000.
- Currently, no TU graduate programs are eligible for the higher unsubsidized loan limits for “graduate professional” students.
- Lifetime Loan Limit: Your total combined undergraduate and graduate federal subsidized, unsubsidized and graduate PLUS Loans also can’t exceed $257,500.
Graduate legacy AGGREGATE Limits
- Aggregate Unsubsidized Loan Limit: Your total combined federal subsidized and unsubsidized loans borrowed as an undergraduate or graduate student can’t exceed $138,500.
- There was no additional lifetime loan limit.
graduate Legacy Limit Rules
If you meet all the legacy rules below, you must follow the legacy limits above.
- Must have taken classes at TU for your current graduate degree before fall 2026.
- Must have borrowed at least one graduate federal unsubsidized or graduate PLUS loan for your current graduate degree that was disbursed to TU before July 1, 2026.
- Must still be pursuing the same graduate academic program that you were pursuing when the last loan above was disbursed.
- Must have remaining legacy years based on the formula below.
Graduate Legacy Years Rules
Official length of your graduate program
- (minus) The years you have already been enrolled in that program
= (equals) Loan Legacy Years or a maximum of 3 years, whichever is less
Federal regulations prohibit any exceptions to these rules. This means:
- We can’t extend your legacy years if you enrolled part-time or haven’t finished your program yet.
- We also can't switch you to the new limits if you haven’t exhausted your legacy years yet.
These calculations use fall, spring and summer enrollment with summer as the end of the academic year. All these scenarios count as 1 year of enrollment:
- fall and spring
- fall, spring and summer
- fall and summer
- spring and summer
All these scenarios count as 0.5 years of enrollment:
- fall only
- spring only
- summer only
Examples
- 2-year Master’s degree program - (minus) 1 year of enrollment = 1 remaining Legacy Year.
- 1-year Certificate Program - (minus) 1 year of enrollment = 0 remaining Legacy Years.
Retaining graduate Legacy Status
- If you don’t enroll in a fall or spring semester or withdraw from all your fall or spring classes, you will lose legacy status for future semesters.
- Once you exhaust your legacy years or lose legacy status, you will become subject to the new loan limits, and all your previous loans will retroactively count against those limits.
Interest Rates and Disbursement Fees
Loan financing costs include the interest that accrues during the life of the loan and a Loan Disbursement Fee that is deducted from each loan disbursement before it is credited to your university account.
Interest Rates for loans first disbursed from 7/1/26 to 6/30/27
| Loan Type | Undergraduate Students | Graduate Students |
|---|---|---|
| Subsidized Loans | 6.52% | NA |
| Unsubsidized Loans | 6.52% | 8.07% |
| PLUS Loans | 9.07% | 9.07% |
Interest Rates for loans first disbursed from 7/1/25 to 6/30/26
|
Loan Type |
Undegraduate Students | Graduate Students |
|---|---|---|
| Subsidized Loans | 6.39% | NA |
| Unsubsidized Loans | 6.39% | 7.94% |
| PLUS Loans | 8.94% | 8.94% |
Loan Repayment Information
You must begin to repay your loan at the end of a six-month grace period that begins when you graduate, leave school or drop below half-time enrollment.
For more information, see Loan Repayment.