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Federal Direct Subsidized and Unsubsidized Loans

The Federal Direct Subsidized Loan is a student loan that is available to undergraduate students only. The Federal Direct Unsubsidized Loan is a student loan that is available to undergraduate, graduate, and pharmacy students. Loan funds come directly from the U.S. government.

To Apply for the Federal Direct Subsidized or Unsubsidized Loan

First, the student must complete the Free Application for Federal Student Aid (FAFSA) and meet the eligibility requirements. Then, the student must follow the steps below.

Returning Students

There are no steps required to renew Federal Direct Subsidized or Unsubsidized loans for students who received this type of loan at Notre Dame during the previous academic year.

New Students/First Time Borrowers at Notre Dame

Go to studentloans.gov and log in using your FSA user ID, then:

  • Step 1: Choose the option Complete Counseling (choose ENTRANCE counseling).
  • Step 2: Choose the option Complete Master Promissory Note (MPN) (choose Subsidized/Unsubsidized for the loan type).

The priority deadline to complete the steps listed above is June 5, 2016.

For help with www.studentloans.gov, you may call 800-557-7394.

The Office of Financial Aid will receive confirmation of the 2 completed steps above, and then the loan(s) will be processed for the maximum eligibility unless you request otherwise. You will receive an email when the loan(s) are processed and when the funds disburse.

Please have the following information in front of you prior to beginning the MPN process so that you don't have to exit before completing it:

  1. Your permanent address and telephone number.
  2. Your e-mail address (optional). If you have an e-mail address we strongly suggest that you provide it so you will receive an e-mail confirmation of your E-MPN submission.
  3. Your full legal name and Social Security Number (you may wish to have your Social Security card in front of you).
  4. Your Driver's license number, if applicable (you may wish to have your Driver's license in front of you).
  5. Complete name, addresses, and telephone numbers of two references who have known you for at least three years. One reference should be a parent or legal guardian if available. The references must be two different people at different addresses within the United States.

Loan Cancellation Policy

New Students: The steps should be completed by the priority deadline, if possible. One month after the semester has started, loans will be cancelled if the steps have not been completed. If the student is awarded later, the loans will be canceled within one month of awarding.

Current Students: If the steps listed above have not been completed by the priority deadline, the loans will be cancelled. If the student is awarded late, the loans will be canceled within one month of awarding.

Subsidized vs. Unsubsidized Loans

Your Federal Direct Loan award may be Subsidized, Unsubsidized or the combination of the two.


  • The subsidized loan is only available to undergraduate students. 
  • The Subsidized Loan is awarded for the academic year and is based on your financial need, dependency status and academic grade level.
  • Financial need is determined by your Cost of Attendance minus your Estimated Family Contribution (EFC) from the FAFSA and any other aid you will receive.
  • The federal government subsidizes or pays the interest on the loan while you are enrolled at least half-time, in an eligible period of deferment, and during grace periods (The subsidy during grace periods is not available for loans first disbursed on or after July 1, 2012, and before July 1, 2014)


  • The Unsubsidized Loan is awarded based on your Cost of Attendance minus any other aid you will receive, your dependency status and your academic grade level.
  • You are responsible for the interest on this loan from the time the loan is disbursed until it is paid in full. The federal government DOES NOT subsidize the interest on this loan.
  • You may choose to defer the interest during enrollment and deferment periods, but it will be capitalized (added to the principal amount).

Interest Rates

Effective July 1, 2016  the interest rates on all Federal Direct Loans (both subsidized and unsubsidized)are as follows:

  • undergraduate students: 3.76%
  • graduate & pharmacy students: 5.31%


Prior to October 1, 2016, Direct Subsidized/Unsubsidized Loans have a 1.068% origination fee charged by the U.S. Department of Education. For example, a $10,000 loan will have an origination fee of 1.068% ($106.80) deducted from the loan before it is disbursed. $9,893 will disburse to the school. The student borrows $10,000 and must repay $10,000.

Direct Subsidized/Unsubsidized Loans disbursed after October 1, 2016, will have a 1.069% origination fee charged by the U.S. Department of Education.

Loan Limits for Each Year

In addition to the information below, please note that a new provision is in place that affects first-time borrowers:

  • Once the borrower has received Direct Subsidized Loans for a period that is 150% of the published length of the borrower's current education program, the borrower is no longer eligible for Direct Subsidized Loans.
  • A first-time borrower who loses eligibility for additional subsidized loans loses interest subsidy on subsidized loans received on or after July 1, 2013 of the borrower did not complete the program AND continues enrollment in the program OR enrolls in another program of the same of shorter length.
  • Subsidized Loan Time Limitation

For students enrolled as regular students in eligible programs, annual Federal Direct Loan limits are as follows:

Dependent Undergraduate Students

 Base Amount (Sub/Unsub)Additional Loan (Unsub)Total
First-year $3,500 $2,000 $5,500
Sophomore $4,500 $2,000 $6,500
Junior $5,500 $2,000 $7,500
Senior $5,500 $2,000 $7,500

Independent Undergraduate Students and 
Dependent Undergraduate Students Whose Parents
 Cannot Borrow PLUS

 Base Amount (Sub/Unsub)Additional Loan (Unsub)Total
First-year $3,500 $6,000 $9,500
Sophomore $4,500 $6,000 $10,500
Junior $5,500 $7,000 $12,500
Senior $5,500 $7,000 $12,500

Students pursuing Teacher Certification

 Base Amount (Sub/Unsub)*Additional Loan (Unsub)Total
Independent $5,500 $7,000 $12,500
Dependent $5,500 $2,000 $7,500

Graduate and Pharmacy Students

 Total Unsub Loan 
Graduate Students (pursuing Master's or Ph.D degree, CASE program) $20,500
Pharmacy Students $33,000

Cumulative Total Loan Limits

Federal regulations set aggregate, or total, loan limits in addition to the annual loan limits. You cannot borrow more than the aggregate loan limit for all subsidized and unsubsidized loans at all schools.

Aggregate Loan Limits

 Maximum SubsidizedMaximum Combined (sub & unsub)
Dependent Undergraduates $23,000 $31,000
Independent Undergraduates $23,000 $57,500
Graduate/Professional Students $65,500 $138,500
Certain Health Professional Students (ie Pharmacy) $65,500


More information about Federal Direct Subsidized and Unsubsidized Loans.