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Office of Financial Aid & Scholarships

Federal Direct Loans

Direct Loans, from the William D. Ford Federal Direct Loan Program, are low-interest loans for eligible undergraduate and graduate students to help cover the cost of higher education. These federal loans are borrowed directly from the U.S. Department of Education at participating schools. These loans do not require a credit check. A small origination fee is withheld from the loan when it is disbursed to you. 

There are borrowing limits on the maximum amount you are eligible to borrow each academic year (annual loan limit) and in total (aggregate loan limit). You may qualify to borrow both subsidized and unsubsidized loans based upon your demonstrated financial need and the maximum loan limit per grade level. The actual amount that you can borrow depends on your grade classification, whether you are a dependent or independent student and other factors. It may be less than the maximum amounts shown in the loan limit chart.

There are two types of Federal Direct Loans: Subsidized and Unsubsidized.


1. Direct Subsidized Loans provide a fixed interest rate of 3.76% disbursed July 1, 2016 through June 30, 2017 and are available to undergraduate students who demonstrate financial need based on the results of the Free Application for Federal Student Aid (FAFSA). You are not charged interest on these loans while you are in school at least half-time and during deferment periods. The interest on your subsidized loan begins during your grace period.  Graduate students are no longer eligible for subsidized loans.

A new borrower on or after July 1, 2013 must complete your degree within 150% of the published length of your program to remain eligible for the interest subsidy benefits on all subsidized loans. If a degree is not completed within the 150% timeframe, you will lose all subsidy benefits and future eligibility for subsidized loans.


2. Direct Unsubsidized Loans provide a fixed interest rate of 3.76% for undergraduate loans (5.31% for graduate students) disbursed July 1, 2016 through June 30, 2017 and are available to students regardless of financial need (although the FAFSA must still be filed). Interest accrues on an unsubsidized loan from the time it is first disbursed to you. You can pay the interest while you are in school or allow it to accrue and be capitalized (added to the principal of the loan) upon repayment.

Borrowing a Direct Loan: Master Promissory Note & Entrance Counseling
  • If you are a first-time borrower of Direct Loans you will need to complete a Direct Loan Master Promissory Note (MPN) at www.studentloans.gov using your FSA ID. The MPN is a legal document in which you promise to repay your loans and any accrued interest and fees to the U.S. Department of Education. The MPN explains the terms and conditions of your loan and is used for loans that you receive over a period of multiple academic years.

  • New borrowers of Direct Loans also need to complete Entrance Counseling at www.studentloans.gov using the FSA ID. This process helps you to understand the rights and responsibilities as a Direct Loan borrower.

  • If you have borrowed Direct Loans at UNI in previous years, you have already completed both of these requirements. However, new students who may have borrowed Direct Loans while attending another institution will still need to complete Entrance Counseling before receiving loans at UNI.