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Federal Direct Subsidized & Unsubsidized 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: Subsidized and Unsubsidized. The differences are their financial need requirements and when interest charges start accruing. Graduate students can't borrow Subsidized Loans.
- 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 6-month grace period, which begins when you graduate, leave the university, or drop below half-time enrollment.
- 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 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 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 Loan Limits
Dependent Undergraduate Students
| 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 |
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 | $3,500 | $6,000 | $10,500 |
| Junior/Senior 60+ | $3,500 | $7,000 | $12,500 |
| Graduate Students | NA | $20,500 | $20,500 |
Undergraduate Aggregate (Lifetime) 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 |
New Graduate Aggregate Limits
For all TU graduate programs, starting with the Fall 2026 term, the new graduate student Unsubsidized Loan program aggregate limit is $100,000. (No TU graduate programs are eligible for the higher loan limits for "graduate professional" students.)
Legacy Graduate Aggregate Limits
Legacy/grandfathering provisions will apply the old aggregate limits to graduate students who borrowed graduate federal Unsubsidized Direct Loans at TU before July 1, 2026, who are still pursuing the same graduate academic program at TU, and who didn't withdraw from TU or that academic program. These legacy provisions extend the old aggregate limit to legacy borrowers for up the three years or until they complete that TU graduate program, whichever comes first. The legacy graduate student Unsubsidized Loan aggregate limit is $138,500 for all Federal Subsidized and Unsubsidized Loans borrowed as an undergraduate or graduate student.
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
These interest rates apply to academic year loans first disbursed from 7/1/25 to 6/30/26. For loans first disbursed after 6/30/26, new rates will be released in June.
| LOAN TYPE | UNDERGRADUATE INTEREST RATE | GRADUATE INTEREST RATE |
|---|---|---|
| Direct Subsidized Loans | 6.39% | N/A |
| Direct Unsubsidized Loans | 6.39% | 7.94% |
| PLUS Loans | 8.94% | 8.94% |
Loan Disbursement Fees
The following disbursement fees will be deducted from your semester loan disbursements based on the date of the first disbursement of each loan.
| LOAN TYPE | First Disbursed 10/1/20 to 9/30/26 |
|---|---|
| Direct Subsidized & Unsubsidized Loans | 1.057% |
| PLUS Loans | 4.228% |
Loan Repayment Information
You must begin to repay your loan at the end of a 6-month grace period that begins when you graduate, leave school, or drop below half-time enrollment.
For additional information, visit these U.S. Department of Education web pages:
- Use the Loan Simulator to estimate your monthly payments.
- Compare the Federal Repayment Plan options. The Standard Repayment Plan offers the lowest total borrowing costs because it pays off your loan the fastest, but the other plans can be helpful if the monthly payments from the standard plan are too high. If you want to pay off your loan faster, you can prepay all or a portion of your loan at any time without penalty.
- If you have repayment problems or questions, contact your federal loan servicer. To find your servicer, login to studentaid.gov. They can help you to avoid the consequences of delinquent payments and default. Many options are available including different repayment plans, Deferments, and Forbearance.
- Learn about your Loan Deferment and Forbearance options.
- During qualified enrollment deferment periods, you may defer making payments on your loans. For Subsidized Loans, interest will not accrue during these deferment periods. For Unsubsidized Loans, interest will continue to accrue during all deferment periods.
- If you don't qualify for a deferment, but are having trouble making your payments, you can request Forbearance. If your request is approved, you can temporarily postpone your loan payments, but interest will continue to accrue.
- You could also consider switching to a different Repayment Plan.
- Direct Loans are also eligible for several Loan Forgiveness, Cancellation, and Discharge options including but not limited to Total and Permanent Disability Discharge, Teacher Loan Forgiveness, and Public Services Loan Forgiveness.
- If you have borrowed from several different federal loan programs, you may want to use a Direct Consolidation Loan to simplify and reduce your payments by combining your loans into a new loan with a single monthly payment.