Federal Direct Subsidized/Unsubsidized Loan (Student)
The terms of the need-based Federal Direct Loan Program require that the student borrower repay, with interest, this source of financial assistance. Additional terms, subject to revision by federal regulation, include:
- The maximum annual limit varies by year in school
- 2.75% fixed interest rate for undergraduate students during repayment for loans first disbursed from July 1, 2020, through June 30, 2021
- 1.057% origination fee for student loans with a first disbursement date from October 1, 2020, through June 30, 2021
- Repayment on both principal and interest begins six months after the student ceases to be enrolled in school on at least a half-time basis, generally extending over a 10-year period
- $23,000 maximum base aggregate undergraduate borrowing limit for "Subsidized" loans. $31,000 maximum aggregate Dependent undergraduate borrowing limit for combined subsidized and unsubsidized loans for dependent students
- 57,500 maximum Independent undergraduate borrowing in total.
Students who qualify for a “Subsidized” Federal Direct Loan are not charged interest while they are enrolled in school at least half-time and during any deferment periods. Students ineligible for a "Subsidized" loan are able to borrow an "Unsubsidized" federal direct loan. “Unsubsidized” Federal Direct Loans do accumulate interest while the student is enrolled in school. Interest begins to accrue after disbursement of the loan funds; however, the student may choose to have the payment of the interest deferred during enrollment and later capitalized (added to principal) at the time of repayment. For more information about Federal Direct Loans, visit https://studentaid.gov/.
Borrowing Limits
Undergraduate Dependent Students
Year Subsidized Unsubsidized Annual Total Aggregate Subsidized Total Sub&Unsub
1 $3,500 $2,000 $5,500 $23,000 $31,000
2 $4,500 $2,000 $6,500
Undergraduate Independent Students
1 $3,500 $6,000 $9,500 $23,000 $57,500
2 $4,500 $6,000 $10,500
If a parent applies for a Federal Direct PLUS Loan and is denied based on credit, a dependent undergraduate may borrow at the independent levels listed above.
Additional information on the Federal Direct Student Loan Program is available from the Department of Education.
**Note as a community college a student attending HutchCC can get no more than year 2 limits even if they attend after the 2nd year.
Federal Student Aid Ombudsman Group
The Ombudsman Group is dedicated to helping resolve disputes related to Direct Loans, Federal Family Education Loan (FFEL) Program loans, and Guaranteed Student Loans. If you’ve completed the steps to resolve your loan dispute and you still are not satisfied, you may need to contact the Federal Student Aid (FSA) Ombudsman Group of the U.S. Department of Education (ED). The Ombudsman Group is a neutral, informal, and confidential resource to help resolve disputes about your federal student loans.
Additional information on the Federal Student Aid Ombudsman Group is available from the Department of Education.