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
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 FAFSA pin number, then:
Step 1: Choose the option Complete Entrance Counseling.
Step 2: Choose the option Complete Master Promissory Note (MPN).
- For help with www.studentloans.gov, you may call 800-557-7394.
- Beginning June 10, if the steps listed above have not been completed within one month of awarding for 2013-14, we will assume you decline the loan and it will be cancelled.
- Students who are awarded late may not have a full 30 days before cancellation. Refer to deadlines.
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:
- Your permanent address and telephone number.
- 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.
- Your full legal name and Social Security Number (you may wish to have your Social Security card in front of you).
- Your Driver's license number, if applicable (you may wish to have your Driver's license in front of you).
- 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.
Subsidized vs. Unsubsidized Loans
Your Federal Direct Loan award may be Subsidized, Unsubsidized or the combination of the two.
- Effective July 1, 2012, 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 and in an eligible period of deferment.
- Interest will be charged once your grace period begins.
- 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).
For 2013-14, the interest rates on all Federal Direct Loans (both subsidized and unsubsidized) is as follows:
- undergraduate students: 3.86%
- graduate students: 5.41%
Loans with a first disbursement between July 1, 2013 and December 1, 2013 , have a 1.051 origination fee charged by the U.S. Department of Education. For example, a $10,000 loan will have an origination fee of 1.051 percent ($105.10) deducted from the loan before it is disbursed. $9,895 will disburse to the school. The student borrows $10,000 and must repay $10,000.
Loans with a first disbursement on or after December 1, 2013 have a 1.072 origination fee charged by the U.S. Department of Education. For example, a $10,000 loan will have an origination fee of 1.072 percent ($107.20) 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.
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 as of July 1, 2013:
- 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.
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|
Independent Undergraduate Students and Dependent Undergraduate Students Whose Parents Cannot Borrow PLUS
|Base Amount (Sub/Unsub)||Additional Loan (Unsub)||Total|
Graduate and Pharmacy Students
|Base Amount (Sub/Unsub)*||Additional Loan (Unsub)||Total|
|Graduate Students (pursuing Master's or Ph.D degree, CASE program)||$8,500||$12,000||$20,500|
|Graduate Students (pursuing teaching certification, if independent)||$5,500||$7,000||$12,500|
*Effective July 1, 2012 graduate and pharmacy students will no longer be eligible for subsidized loans.
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
Effective July 1, 2008
|Maximum Subsidized||Maximum Combined (sub & unsub)|
|Certain Health Professional Students (ie Pharmacy)||$65,500||