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 Graduate PLUS Loans.

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 of an educational loan(s)

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

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 once 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
First Year $5,500 $9,500 $3,500
Second Year $6,500 $10,500 $4,500
Pre-Junior (Drexel Only) and Junior $7,500 $12,500 $5,500
Senior $7,500 $12,500 $5,500
Post-bac Programs $5,500 $12,500 $5,500
Aggregate Amount $31,000 $57,500 $23,000

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

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 studentaid.gov.

Annual amounts of the Unsubsidized loan are dependent upon the type of and year in a 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 N/A $20,500
Medical (9 months) $20,500 $20,000 $40,500
Medical (10 months) $20,500 $22,222 $42,722
Medical (11 months) $20,500 $24,444 $44,944
Medical (12 months) $20,500 $26,667 $47,167
Public Health (9 months) $20,500 $12,500 $33,000
Public Health (12 months) $20,500 $16,677 $37,177
Aggregate Loan Limits
  • $138,500 - Graduate and Law Students
  • $224,000 - Certain Graduate Health Professional Programs

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

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 studentaid.gov.

Origination Fees 

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

How to Apply for 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 studentaid.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.

Please note: Federal loans disburse evenly over the course of one academic year based on your plan of study. See our Financial Aid Distribution page for more details.

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