Federal Direct Loan Overview

A Federal Direct Loan is a fixed rate loan made to students. Generally, every student who files a FAFSA is eligible to borrow a Federal Direct Loan. Students may qualify to have a portion of their federal loan eligibility subsidized based on their financial need as determined by the FAFSA results. A student must be enrolled at least half-time to be eligible to receive a Federal Direct Loan.

Helpful information regarding Federal Student Aid is available online at www.studentaid.ed.gov.

Steps to Receiving Your Loan(s)

  1. Accept your loan(s) Voyager (click here for instructions)
  2. Complete Entrance Counseling* - Entrance counseling will walk you through the Direct Loan process and explain your rights and responsibilities as a borrower. 
  3. Complete Master Promissory Note* - The Master Promissory Note (MPN) is a legal document in which you promise to repay your loans and any accrued interest and fees to the U.S. Department of Education. It explains the terms and conditions of your loan(s). 

*You are only required to complete Entrance Counseling and the MPN once. If you previously borrowed a Federal Direct Loan at Lawrence, you do not need to complete these steps again.

Federal Direct Loan Interest Rates & Fees

Interest Rates for (Undergraduate) Direct Subsidized Loans and Direct Unsubsidized Loans
Academic Year Direct Subsidized Loans Direct Unsubsidized Loans
7/1/2021 - 6/30/2022 3.73% 3.73%
7/1/2020 - 6/30/2021 2.75% 2.75%
7/1/2019 - 6/30/2020 4.53% 4.53%
7/1/2018 - 6/30/2019 5.05% 5.05%
7/1/2017 - 6/30/2018 4.45% 4.45%
7/1/2016 - 6/30/2017 3.76% 3.76%

 

Loan Fees for (Undergraduate) Direct Subsidized Loans and Direct Unsubsidized Loans
First Disbursement Date Loan Fee
On or after Oct. 1, 2020, and before Oct. 1, 2021 1.057%

On or after Oct. 1, 2019, and before Oct. 1, 2020

 1.059%
On or after Oct. 1, 2018, and before Oct. 1, 2019 1.062%
On or after Oct. 1, 2017, and before Oct. 1, 2018 1.066%
On or after Oct. 1, 2016, and before Oct. 1, 2017

1.069%

*The origination fee is deducted from each disbursement.

What is the Difference Between Subsidized and Unsubsidized Loan?

Federal Subsidized Loan

The Federal Direct Subsidized Loan is awarded to students who demonstrate financial need as determined by the FAFSA. Interest on a Direct Subsidized Loan is paid by the federal government while the student is enrolled at least half-time, during deferment periods and, for loans disbursed before July 1, 2012, during the 6-month grace period. Repayment begins 6 months after a student graduates or is no longer enrolled at least half-time (8 units).

Federal Direct Unsubsidized Loan

You are not required to demonstrate "financial need" to receive a Unsubsidized Direct Loan. Interest begins accruing on the loan at the time of disbursement. The student has the option to make interest payments during the in-school period, or to allow the accrued interest to be capitalized (added on) to the principal balance. Repayment begins 6 months after a student graduates or is no longer enrolled at least half-time (8 units).

  Federal Direct Subsidized Loan

Federal Direct Unsubsidized Loan
Is interest charged when the students is enrolled in school? No - interest does not accrue when the student is enrolled in school.     Yes - interest accrues when the student is enrolled in school.          
Is interest charged during Deferment? No.

Yes.
Is interest charged during the Grace Period? No. Yes.
Is interest charged during Repayment? Yes.

Yes.