Direct Loans

What do subsidized and unsubsidized mean?

There are two types of Federal Direct Loans: subsidized and unsubsidized.

Subsidized loans

Direct Subsidized Loans are available to undergraduate students whose Expected Family Contribution shows that they need money for college. If you get a Direct Subsidized Loan, the U.S. Department of Education pays any interest that accrues while you’re enrolled at least half time. (Note that there are certain situations where you’ll become responsible for paying interest on the loan.)

There is a time limit on how long you may receive Direct Subsidized Loans: up to 150 percent of the published length of your program.

Learn about the time limit

Unsubsidized loans

Direct Unsubsidized Loans are available to both undergraduate and graduate students. You do not need to show financial need to qualify. You’re responsible for paying all interest on the loan.

Learn more differences

You’ll begin repaying your loan six months after you graduate or drop below half-time status. First, you’ll be asked to complete exit counseling, which will provide you with information on repaying your loan. We’ll send you email to notify you when it’s time for you to go through exit counseling.

Learn more about repaying your loan