Federal Direct Subsidized & Unsubsidized Loans
Learn more about Federal Direct Subsidized and Unsubsidized loans
Federal Direct Loans offered by the federal government tend to have the best rates and repayment plans and are only available by filling out the FAFSA.
There are two types of Federal Direct Student 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. (The federal government pays the interest for the student during this time.)
Unsubsidized Loans
These loans are not based on need, and they do accrue interest for the student while they are in school.
Federal Direct Subsidized and Unsubsidized Loans
Federal Direct Loans are the most common type of loans for students.
Direct Loan limits vary by academic level and type. Repayment begins 6 months after a student graduates, leaves school or drops below half-time enrollment. Within each "class" level, students are limited in the amount of the Direct Loan they can borrow. Direct Loan benefits are discussed during the student's required entrance counseling session and may be reviewed on the Federal Student Aid website.
Federal Direct Subsidized Loans
Available only to undergraduate students and limited by the student's financial need, these loans do not accrue interest while the student is enrolled at least half time (6 credits for undergraduate students).
Federal Direct Unsubsidized Loans
The amount of loan is limited by the student's cost of attendance less any other financial aid that has been awarded. These loans begin to accrue interest after the first disbursement.
| Year |
Dependent Students |
Independent Students |
|---|---|---|
| First-Year Undergraduate Annual Loan Limit | $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 Annual Loan Limit | $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 Annual Loan Limit | $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 or Professional Students Annual Loan Limit | Not Applicable (all graduate and professional students are considered independent) | $20,500 (unsubsidized only) |
| Subsidized and Unsubsidized Aggregate Loan Limit | $31,000 - No more than $23,000 of this amount may be in subsidized loans. |
$57,500 for undergraduates - No more than $23,000 of this amount may be in subsidized loans. $138,500 for graduate or professional students - No more than $65,500 of this amount may be in subsidized loans. The graduate aggregate limit includes all federal loans received for undergraduate study. |
The interest rates are fixed for the life of the loan and are set for each disbursement within the academic year (July 1st - June 30th).
For 2025-26 the current interest rates are:
Subsidized Loans: 6.39%
Unsubsidized Loan (undergraduate student): 6.39%
Unsubsidized Loan (graduate/professional student): 7.94%
An origination fee is also charged on federal student loans. See below for rates:
For loans disbursed on or after 10/1/2020 and before 10/1/2026: 1.057%
For loans disbursed on or after 10/1/2019 and before 10/1/2020: 1.059%
New 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.
Students who have forgotten their FSA ID or password, can complete these steps to retrieve or reset their information.
Students can find out if they are missing these items via mySeattleU from the Financial Aid Self Service Portal.
Only students who wish to utilize these loans need to complete these requirements.
When a student's financial aid file is complete and the appropriate requirements have been completed, loan funds will automatically be disbursed to the student's Seattle University account at least 10 days before the 1st day of class each quarter.
Students must be enrolled at least half-time to be eligible for federal loans:
Undergraduate students: 6+ credits each term.
Graduate/Professional students: 3+credits each term.
After a loan has been disbursed, the Department of Education will assign it to one of their loan servicers. A loan servicer is a company that is assigned to handle billing, repayment plans, and other services such as deferment or forbearance, and is responsible for answering questions about the loan accounts of the students assigned to them.
It is the student's responsibility to ensure that their loan servicer always has their current billing address and phone number. Students who have more than one loan may have more than one loan servicer.
Students are able to see who is responsible for servicing their loans by going to the Federal Student Aid website and logging in to review their loan history or by calling the Federal Student Aid Information Center at 1-800-433-3243.
Once a student graduates, drops below half-time enrollment or leaves school (including SLOA), repayment typically begins after the 6-month grace period.
Students who graduate, drop below half-time or stop attending (including SLOA) and have borrowed from the Direct Loan Program are required to complete an Exit Counseling session. The exit process 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.