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orange barFederal 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:
    • 4.99% (effective for loans first disbursed on or after July 1, 2022 and prior to July 1, 2023)
    • 3.73% (effective for loans first disbursed on or after July 1, 2021 and prior to July 1, 2022)
  • Repayment starts: 6 months after student graduates or enrollment falls below half-time
  • Origination fee:
    • for loans first disbursed on or after October 1, 2020 and before October 1, 2023: 1.057% of loan amount (.98943)
  • Loan Requirements:

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:
    • 4.99% (effective for loans first disbursed on or after July 1, 2022 and prior to July 1, 2023)
    • 3.73% (effective for loans first disbursed on or after July 1, 2021 and prior to July 1, 2022)
  • Repayment starts: 6 months after student graduates or enrollment falls below half-time
  • Origination fee:
    • for loans first disbursed on or after October 1, 2020 and before October 1, 2023: 1.057% of loan amount (.98943)
  • Loan Requirements:
  • 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:
    • 6.54% (effective for loans first disbursed on or after July 1, 2022 and prior to July 1, 2023)
    • 5.28% (effective for loans first disbursed on or after July 1, 2021 and prior to July 1, 2022)
  • Repayment starts: 6 months after student graduates or enrollment falls below half-time
  • Origination fee:
    • for loans first disbursed on or after October 1, 2020 and before October 1, 2023: 1.057% of loan amount (.98943)
  • Loan Requirements:

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:
    • 7.54% (effective for loans first disbursed on or after July 1, 2022 and prior to July 1, 2023)
    • 6.28% (effective for loans first disbursed on or after July 1, 2021 and prior to July 1, 2022)
  • Repayment starts: 6 months after student graduates or enrollment falls below half-time
  • Origination fee:
    • for loans first disbursed on or after October 1, 2020 and before October 1, 2023: 4.228% of loan amount (.95772)
  • Loan Requirements:

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)
  • For more information on the Federal Direct PLUS loan and the application process, visit the Federal Student Aid website
  • Interest rate:
    • 7.54% (effective for loans first disbursed on or after July 1, 2022 and prior to July 1, 2023)
    • 6.28% (effective for loans first disbursed on or after July 1, 2021 and prior to July 1, 2022)
  • 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:
    • for loans first disbursed on or after October 1, 2020 and before October 1, 2023: 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.