Federal Direct Subsidized & Unsubsidized Loans
Learn more about Federal Direct Subsidized and Unsubsidized loans
There are two types of Federal Direct Loans that a student may see on their financial aid offer letter.
Subsidized Loans
These loans are need-based and don’t accrue interest while in school at least half-time, during the 6-month grace period after leaving school or during a period of deferment.
Unsubsidized Loans
These loans are not based on need, and they do accrue interest for the student while they are in school.
Direct loan limits are set forth by the Department of Education and vary by academic level and student type. Within each class level, students are limited in the amount of the direct loan they can borrow each year based on several factors including their dependency status and the cost of attendance less any other financial aid that has been awarded.
Direct loan benefits are discussed during the student's required entrance counseling session and may also be reviewed on the Federal Student Aid website.
Annual Limits
| Class Level | Dependent Students (except students whose parents are unable to obtain PLUS Loans) |
Independent Students (and dependent undergraduate students whose parents are unable to obtains PLUS Loans) |
|---|---|---|
| First-Year Undergraduate | $5,500 - No more than $3,500 of this amount may be in subsidized loans. | $9,500 - No more than $3,500 of this amount may be in subsidized loans. |
| Second-Year Undergraduate | $6,500 - No more than $4,500 of this amount may be in subsidized loans. | $10,500 - No more than $4,500 of this amount may be in subsidized loans. |
| Third-Year and Beyond Undergraduate | $7,500 - No more than $5,500 of this amount may be in subsidized loans. | $12,500 - No more than $5,500 of this amount may be in subsidized loans. |
| Graduate Student | Not Applicable (all graduate students are considered independent) | $20,500 (unsubsidized only) |
| Professional Student | Not Applicable (all professional students are considered independent) |
Current: $25,500 (unsubsidized only) After July 1, 2026: $50,000 (unsubsidized only) |
Aggregate Limits
| Class Level | Amount | Loans Included in Calculation |
|---|---|---|
| Undergraduate | $57,500 | Includes subsidized and unsubsidized loans. No more than $23,000 of this amount may be in subsidized loans. |
| Graduate | $100,000 | Includes unsubsidized loans borrowed as a graduate student (loans borrowed as an undergraduate are not included). |
| Professional | $200,000 | Includes unsubsidized loans borrowed as a professional student (loans borrowed as an undergraduate student are not included). |
| Total Lifetime | $257,500 | Includes all federal loans borrowed (subsidized, unsubsidized) in all class levels (undergraduate, graduate and professional) including amounts repaid, forgiven, canceled, or discharged. |
Interest Rates
The interest rates are set by the Department of Education each academic year and are fixed for the life of the loan.
For 2025-26 the current interest rates are:
Subsidized Loans: 6.39%
Unsubsidized Loans (undergraduate student): 6.39%
Unsubsidized Loans (graduate/professional student): 7.94%
Loan Fees
An origination fee is also charged on federal student loans. See below for rates:
For loans disbursed on or after 10/1/2019 and before 10/1/2020: 1.059%
For loans disbursed on or after 10/1/2020 and before 10/1/2026: 1.057%
Eligibility Requirements
Direct Subsidized Loans are available only to undergraduate students who have financial need.
Direct Unsubsidized Loans are available to both undergraduates and graduate or professional degree students, regardless of financial need.
To receive either type of loan, students must be enrolled at least half-time in a program that leads to a degree or certificate awarded by the school.
New student borrowers must complete both an Entrance Counseling session and sign a Master Promissory Note online using the same Federal Student Aid (FSA) ID and password used to electronically sign the FAFSA before these loans can be disbursed. Only students who wish to utilize these loans need to complete these requirements. Students who would like to decline the federal direct loans awarded to them should review What to Do with Loans in Your Financial Aid Offer Letter for instructions.
Students who have forgotten their FSA ID or password, can complete these steps to retrieve or reset their information.
How To Apply
Students only need to file a FAFSA to be considered for Federal Direct Subsidized and Unsubsidized loans. The Student Financial Services office will include these loans in the financial aid offer letter based on student's eligibility and financial need.
Loan Processing
Seattle University awards these loans at the "accepted" status. Students who would like to decline or reduce the Federal Direct Loans awarded to them should review What to Do with Loans in Your Financial Aid Offer Letter for instructions.
Disbursement
Loan funds will automatically be disbursed to the student's Seattle University account at least 10 days before the first day of class each quarter as long as all the requirements are met including minimum enrollment.
Students must be enrolled at least half-time to be eligible for federal loans; however, students enrolled less than full-time will have their loans pro-rated based on actual enrollment.
| Full-time | Half-time | |
|---|---|---|
| Undergraduate | 12+ credits | minimum of 6 credits |
| Graduate/Professional | 6+ credits | minimum of 3 credits |
Loan funds disbursed in excess of the tuition balance due will be processed as a Credit Balance Refund. Students can decide to return the excess funds to reduce the overall amount borrowed by submitting the Financial Aid Revision Request Form.
Loan Servicer
After a loan has been disbursed, the Department of Education will assign it to one of their loan servicers. A loan servicer is responsible for answering loan account questions, sending out bills and processing loan payments, setting up repayment plans, and other services such as processing deferments or forbearances. Students who have more than one loan may have more than one loan servicer.
It is the student's responsibility to ensure that their loan servicer always has their current billing address and phone number.
Students are able to see who is responsible for servicing their federal loans on the Federal Student Aid website and reviewing their loan history or by calling the Federal Student Aid Information Center at 1-800-433-3243.
Repayment
Once a student graduates, drops below half-time enrollment or leaves school (including SLOA), repayment typically begins after the 6-month grace period.
Exit Counseling
Students who graduate, drop below half-time or stop attending (including SLOA) are required to complete an Exit Counseling session. The exit counseling session must be completed even if the student plans to return to Seattle University or has transferred to another school. Students will receive an email from Student Financial Services requesting they complete the exit counseling session. The same FSA ID and password used on the FAFSA will also be used when signing in to complete exit counseling.
Bankruptcy Limitations
Students who file for bankruptcy may still be required to pay back this loan.