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Federal Direct Loan Programs for Students

Depending upon what type of student you are, the Department of Education offers three different types of Federal Direct Loans: Subsidized, Unsubsidized, and PLUS (Graduate and Parent).

Eligibility Requirements

Students need to complete a Free Application for Federal Student Aid (FAFSA) in order to be considered for federal direct loans. Generally, students also must meet the following criteria to be eligible:

  • U.S. citizen or permanent resident
  • Enrolled at least half-time in a degree-seeking program (6 credits for undergraduate, 4.5 for graduate/professional)
  • Not currently in default on education loan(s)

The specific loan program eligibility is listed below for undergraduate and graduate students. 

Note: The total annual amount limit may not exceed Drexel's cost of attendance less other financial assistance you receive.

Undergraduate Students

Undergraduate students may be eligible for two different types of direct loans: 

  • Subsidized Loan – The Department of Education pays the interest on the loan during the student's in-school deferment period; interest does not start to accrue on the loan until the student graduates, drops below part-time status, or withdraws from the University.
  • Unsubsidized Loan – Interest starts to accrue on the loan after it disburses to the student's account.

Annual total amounts of direct loans are determined by the student's grade level and dependency status. There is an annual maximum of how much of a student's annual direct loan eligibility can be provided as a Subsidized loan. This is determined based on the student's financial need. The current limits are listed below.

Grade Level Dependent Students Annual Maximum Independent Students Annual Maximum Subsidized Maximum Amount
Freshman $5,500.00 $9,500.00 $3,500.00
Sophomore $6,500.00 $10,500.00 $4,500.00
Pre-Junior (Drexel Only) and Junior $7,500.00 $12,500.00 $5,500.00
Senior $7,500.00 $12,500.00 $5,500.00
Post-bac Programs $5,500.00 $12,500.00 $5,500.00
Aggregate Amount $31,000.00 $57,500.00 $23,000.00

Graduate and Professional Students

Students in graduate or professional programs are eligible for two types of direct loans:

  • Unsubsidized Loan – Interest starts to accrue on the loan after it disburses to the student's account.
  • Graduate PLUS Loan - This is a credit-based loan that requires a separate application in addition to completing the FAFSA. Students can apply online at studentloans.gov.

Annual amounts of the Unsubsidized loan are dependent upon the type and year in program. Graduate PLUS Loans are limited to the student's cost of attendance minus all financial aid awards and resources being received.  

The annual limits for the Unsubsidized loan are listed below:

Grade Level Limit for Unsubsidized Loans Additional Loan Amount Total
Graduate and Law $20,500.00 N/A $20,500.00
Medical (9 months) $20,500.00 $20,000.00 $40,500.00
Medical (10 months) $20,500.00 $22,222.00 $42,722.00
Medical (11 months) $20,500.00 $24,444.00 $44,944.00
Medical (12 months) $20,500.00 $26,667.00 $47,167.00
Public Health (9 months) $20,500.00 $12,500.00 $33,000.00
Public Health (10 months) $20,500.00 $13,889.00 $34,389.00
Public Health (11 months) $20,500.00 $15,278.00 $35,778.00
Public Health (12 months) $20,500.00 $16,677.00 $37,177.00
Aggregate Loan Limits
  • $138,500.00 - Graduate and Law Students
  • $224,000.00 - Medical Students

Interest Rates and Fees

Interest Rates

Interest rates for Federal Direct loans are calculated on a year-by-year basis using the 10-Year Treasury Note index rate in combination with an add-on amount determined by Congress. Each loan has a rate cap should the Treasury Note index increase in subsequent years.

View information about interest rates for federal direct loans at studentloans.gov.

Origination Fees 

Most federal student loans have fees that are a percentage of the loan amount. View more information about Origination Fees.

Steps to Receiving Federal Direct Loans

Students interested in federal loans should complete the following steps:

Graduate or professional students who are interested in supplementing their financial aid package with a Graduate PLUS Loan should take the following steps:

  • Review your financial aid award summary and personal budget to determine how much you will need (only borrow the amount you actually will use to minimize your overall loan debt).
  • Apply online at studentloans.gov. Remember - the Graduate PLUS Loan is based on satisfactory credit criteria established by the Department of Education. 
  • You will receive an instant decision regarding your application. 
  • Follow the next steps supplied to you by the Department of Education. Drexel will be notified of your loan approval and add it to your financial aid package once you have completed all steps.