Student Financial Services

Federal Direct Loan Information and Interest Rates: Subsidized, Unsubsidized, & PLUS

Federal Direct student loans generally offer borrowers lower interest rates and more flexible repayment options.

Remember you need to file your FAFSA before being considered for any of these loan types.

Subsidized Federal Direct Loan: Awarded based on financial need. With this type of loan, the federal government pays the interest (fee for borrowing the money) while you are enrolled in college.
Unsubsidized Federal Direct Loan: Does not have a financial need requirement. Unsubsidized loans start accruing interest (fee for borrowing the money) once the loan has disbursed (paid to the student account). You can choose to pay the interest while in school and during grace, deferment, or forbearance periods. If not paid, the interest will be capitalized (added to the principal amount of the loan). If possible, it is always a good idea to pay interest on an Unsubsidized loan while you are in school and during any grace, deferment and/or forbearance periods since this will save you money.

How Much Money Can I Borrow in Federal Direct Loans?*

If you're an undergraduate student:

$5,500 to $12,500 per year in Direct Subsidized Loans and Direct Unsubsidized Loans depending on certain factors, including your year in college.

If you're an eligible non-degree student:

Up to $5,500 per year in Direct Subsidized Loans and Direct Unsubsidized Loans for a dependent student depending on certain factors, including your enrollment.
Up to $12,500 per year in Direct Subsidized Loans and Direct Unsubsidized Loans for an independent student depending on certain factors, including your enrollment.

If you're a graduate student:

Up to $20,500 each year in Direct Unsubsidized Loans.
The remainder of your college costs not covered by other financial aid in Direct PLUS Loans. Note: A credit check is required for a PLUS loan.

If you're a parent of a dependent undergraduate or eligible non-degree student:

The remainder of your child’s college costs that are not covered by other financial aid. Note: A credit check is required for a parent loan (called a Direct PLUS loan).

*source: US Department of Education

Federal Direct Subsidized Loan (Undergraduate and some Non-Degree Students)

Available to undergraduate students, and eligible non-degree students, who have financial need based on the FAFSA

Eligibility based on financial need and federal borrowing limits
No interest typically accrues while the student remains enrolled at least half-time. The interest subsidy may be limited for students who fail to complete their program within 150% of its published length.
Interest rates:
- 5.5% (effective for loans first disbursed on or after July 1, 2023 and prior to July 1, 2024)
Repayment starts: 6 months after student graduates or enrollment falls below half-time
Origination fee:
- A loan fee based on a percentage of the loan amount borrowed that is charged by the lender to process the loan. This fee is deducted from the disbursement.
- for loans first disbursed on or after October 1, 2020 and before October 1, 2024: 1.057% of loan amount (.98943)
Loan Requirements:
- First-time borrowers at UVM must complete a Subsidized/Unsubsidized Loan Master Promissory Note (MPN) and Entrance Counseling

Federal Direct Unsubsidized Loan (Undergraduate and some Non-Degree Students)

Available to undergraduate and eligible non-degree students

Eligibility based on federal borrowing limits
Financial need not required
Interest rate:
- 5.5% (effective for loans first disbursed on or after July 1, 2023 and prior to July 1, 2024)
Repayment starts: 6 months after student graduates or enrollment falls below half-time
Origination fee:
- A loan fee based on a percentage of the loan amount borrowed that is charged by the lender to process the loan. This fee is deducted from the disbursement.
- for loans first disbursed on or after October 1, 2020 and before October 1, 2024: 1.057% of loan amount (.98943)
Loan Requirements:
- First-time borrowers at UVM must complete a Subsidized/Unsubsidized Loan Master Promissory Note (MPN) and Entrance Counseling
Dependent students whose parents are not eligible for a PLUS loan may be eligible to receive additional Unsubsidized loan funds

Federal Direct Unsubsidized Loan (Graduate and Medical Students)

Available to graduate and medical students

Eligibility based on federal borrowing limits
Financial need not required
Interest rate:
- 7.05% (effective for loans first disbursed on or after July 1, 2023 and prior to July 1, 2024)
Repayment starts: 6 months after student graduates or enrollment falls below half-time
Origination fee:
- A loan fee based on a percentage of the loan amount borrowed that is charged by the lender to process the loan. This fee is deducted from the disbursement.
- for loans first disbursed on or after October 1, 2020 and before October 1, 2024: 1.057% of loan amount (.98943)
Loan Requirements:
- First-time borrowers at UVM must complete a Subsidized/Unsubsidized Loan Master Promissory Note (MPN) and Entrance Counseling

Federal Direct Graduate PLUS Loan

Available to graduate and medical students enrolled at least half-time

May be borrowed for up to the full cost of attendance, less other financial aid
Credit approval required (student may apply with co-signer)
- You must complete a Graduate PLUS Loan Credit Check Authorization Form which will be listed as a requirement through your myUVM portal once you accept the loan
Interest rate:
- 8.05% (effective for loans first disbursed on or after July 1, 2023 and prior to July 1, 2024)
Repayment starts: 6 months after student graduates or enrollment falls below half-time
Origination fee:
- A loan fee based on a percentage of the loan amount borrowed that is charged by the lender to process the loan. This fee is deducted from the disbursement.
- for loans first disbursed on or after October 1, 2020 and before October 1, 2024: 4.228% of loan amount (.95772)
Loan Requirements:
- First-time borrowers at UVM must complete a PLUS Master Promissory Note (MPN) and Entrance Counseling

Federal Direct Parent PLUS Loan

Available to parents of dependent undergraduate students and parents of eligible non-degree students

May be borrowed for up to the full cost of attendance, less other financial aid
Credit approval required (parent may apply with a co-signer)
- Each time the loan is borrowed, the parent must Apply for a PLUS Loan
- If you have adverse credit history, you may still have options to obtain the loan. PLUS Credit Counseling is required in these situations.
For more information on the Federal Direct PLUS loan and the application process, visit the Federal Student Aid website
Interest rate:
- 8.05% (effective for loans first disbursed on or after July 1, 2023 and prior to July 1, 2024)
Repayment starts: Immediately following full disbursement, though parents may request deferment until 6 months after the student’s enrollment falls below half-time
Origination fee:
- A loan fee based on a percentage of the loan amount borrowed that is charged by the lender to process the loan. This fee is deducted from the disbursement.
- for loans first disbursed on or after October 1, 2020 and before October 1, 2024: 4.228% of loan amount (.95772)
Loan Requirements:
- First-time borrowers at UVM must complete a PLUS (MPN)
To increase or decrease the parent PLUS loan log in to Apply for a PLUS Loan and specify change as the reason for submitting the PLUS loan request; entering your new total loan amount for the period you are requesting the change for. (This change must be made during the period in which the PLUS loan applies).

A Reminder About Interest Rates and Loans

Please note that interest rates are subject to change from year to year based on federal regulations. These loans are disbursed directly to the school to be applied to the student’s account. The actual amount of the loan disbursed to the school is the amount accepted, less the origination fee.