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Federal Direct Unsubsidized Loans

A Federal Direct Unsubsidized Stafford Loan is not based on financial need. It is available to undergraduate and graduate students who have not met their annual maximum loan eligibility. The interest rate is different for undergraduate and graduate students and changes each July 1.

It is always recommended that students check the interest rate before accepting the loan. The interest on an unsubsidized loan is the student’s responsibility from the date that the loan is disbursed by the institution until the loan is paid in full. A student borrowing an unsubsidized loan can opt not to make payments on the interest until after the loan is out of its grace period. Any unpaid interest accumulated during the time a student is in school will be added to the principal balance upon entering repayment. The student is responsible for paying off the principal amount borrowed and any interest accrued.

Like the Subsidized Stafford Loan, the unsubsidized loan also has an origination fee. This is a fee that will be deducted before the loan proceeds are sent to the institution. Therefore, students will see a disbursed amount of student loans that are slightly lower than the amount the student borrowed. It is recommended, if possible, that students contact their lenders to make quarterly payments on the interest. A student enters repayment on these loans six months after graduation or when the student drops below six credits.

A student is eligible to receive a Stafford Loan if he or she meets all of the requirements below:

  • The student must be a U.S. citizen of permanent resident
  • The student must be working toward a degree
  • The student must be meeting Satisfactory Academic Progress (SAP) standards
  • The student must be enrolled for at least six credits each semester
  • A current year FAFSA is required

If the student is selected for verification, all required documents must be submitted to the Financial Aid Office.

Interest Rates for Federal Loans