Direct Unsubsidized Loans

Summary: Direct Unsubsidized Loans (sometimes called Unsubsidized Stafford Loans) are federal student loans borrowed through the Direct Loans program that offer undergraduate and graduate and professional students a low, fixed interest rate and flexible repayment terms. Demonstrated financial need is not required to qualify. Students are responsible for paying all of the interest that adds up, until the loan balance is paid off.

Find & Compare Private Student Loans for Your School:

Direct Unsubsidized Loans (sometimes called Unsubsidized Stafford Loans) are low-cost, fixed-rate federal student loans available to both undergraduate and graduate students. Financial need is not required, so even students from wealthier families can borrow Direct Unsubsidized Loans.

Key benefits:

  • Fixed interest rate of 4.53% for undergraduate students for the 2019-2020 academic year
  • Fixed interest rate of 6.08% for graduate and professional students for the 2019-2020 academic year
  • No payments while enrolled in school
  • Eligibility not based on demonstrated financial need or credit
  • Multiple repayment plans (including income-based) available

How to Apply for a Direct Unsubsidized Loan

  1. Complete the Free Application for Federal Student Aid (FAFSA®)  or Renewal FAFSA (for returning students) at FAFSA.ed.gov.
  2. Receive your financial aid award letter by mail or email from your school's financial aid office. This letter will summarize your available financial aid, including Direct Subsidized Loans (if eligible) and Direct Unsubsidized Loans.
  3. Contact your financial aid office to accept the financial aid, including student loans.
  4. Sign any associated paperwork, such as the Master Promissory Note (MPN).

Direct Unsubsidized Loan Eligibility

Most students who qualify for federal aid are eligible to take out a Direct Unsubsidized Loan.

Your family’s financial circumstances do not matter. Even wealthy families can qualify.

Required:

  • U.S. citizen, national, or eligible non-citizen
  • Have received a high school diploma or the equivalent (e.g., GED)
  • Enrolled at least half-time in an eligible degree or certificate program
  • Not in default on any existing federal student loans
  • Meet general eligibility requirements for federal student aid

Not Required:

  • Credit check
  • Cosigner
  • Separate loan application

Interest Rates and Fees for Direct Unsubsidized Loans

The interest rates on Direct Unsubsidized Loans are fixed and do not change over the life of the loan.

Every year on July 1, interest rates reset for new loans first disbursed on or after July 1.

compare student loan interest rates 2019

The interest on a Direct Unsubsidized Loan starts to add up (accrue) from the date the loan is first disbursed. If you don’t pay the interest as it accrues, it will be capitalized (added to the loan balance) when you enter repayment, increasing the size of the loan.

The current fee (October 1, 2019 - September 30, 2020) on Direct Loans is 1.059%. Fees are deducted from each loan disbursement. You can ask the college financial aid office to increase the loan amount to cover the fees, up to the annual loan limit.

Sallie Mae student loans offer competitive fixed and variable rates for undergraduates, graduate students and parents. Learn More

Direct Loan Limits: How Much You Can Borrow

The amount you can borrow from the Direct Loans program is subject to annual and aggregate loan limits:

  • Annual limits specify how much you can borrow each academic year.
  • Aggregate limits (also called cumulative limits) specify how much you can borrow through the loan program.

The following graphic outlines the various loan limits for different types of students, and annual and aggregate limits for subsidized and unsubsidized loans.

unsubsidized student loan annual limits

I am a dependent undergraduate student. How can I get my loan limits increased?

Dependency Override

If you have unusual family circumstances (such as a parent in prison), contact your school’s financial aid office and ask for a dependency override to get independent student limits.

Parent PLUS Loan Denial

If your parent is denied for a Parent PLUS Loan, you become eligible for the same loan limits as independent students. Contact your school’s financial aid office for details.

Loan limits are also capped at the college’s annual cost of attendance.

The cost of attendance includes:

  • Tuition and fees
  • Room and board
  • Books
  • Supplies
  • Equipment
  • Transportation
  • Miscellaneous personal expenses

Graduate School Student Loans

How Loan Funds are Distributed

If you are a first-time Direct Loans borrower, you will be required to attend entrance counseling before your loan funds are sent to your school (disbursed). Some schools require in-person counseling, but many offer online counseling. You will learn about the loan terms and requirements during the counseling session.

You will also be required to sign a Master Promissory Note (MPN) before the loans can be disbursed.

The Direct Loan program sends the funds to your school to be credited to your student account. In most cases, the loan will be sent (disbursed) in at least two installments.

Special reminder: There is typically a 30-day delay in disbursing student loans to first-time, first-year borrowers.

Loan funds are credited to your account in this order:

  1. Tuition and fees
  2. Room and board (if you are living in college-owned student housing)
  3. Other school charges (with your permission)

If any loan funds remain in your account, the credit balance will be refunded to you by check, cash, debit card, or electronic funds transfer (EFT) to your bank account. Remember, the refund must be used to pay for your direct and indirect education expenses, such as textbooks, supplies, and equipment.

Read our blog on financial aid disbursement for more details.

In-School Deferment and Grace Period

While you are enrolled in school at least half-time, your Direct Loans will be placed into deferment, which means you don’t have to make any payments. In addition, you don’t have to make payments during the 6-month grace period after you graduate or drop below half-time enrollment status.

The interest on your Direct Unsubsidized Loans will start to accrue (add up) as soon as all of the loan funds are sent to your school. Even though you aren’t making any payments, interest is still adding up.

Repayment

The standard repayment term on Direct Loans is 10 years. However, you can qualify for a longer repayment term if you consolidate the loans or have more than $30,000 in federal student loans.

Direct Unsubsidized Loans are eligible for all of the different repayment plans offered by the U.S. Department of Education.

Eligible repayment plans:

Recommendations

  1. File the FAFSA every year to maintain eligibility for student aid.
  2. Apply for grants and scholarships.
  3. Borrow Direct Subsidized Loans (if eligible) first. Then, take out Direct Unsubsidized Loans. If you have borrowed the maximum and still can’t pay all of your costs, consider other funding options.
  4. Compare the costs and benefits of Parent PLUS Loans and private student loans. If you have a creditworthy cosigner, you may get a lower interest rate with a private student loan.

Get this article in your inbox.

Email This Article
Lender
Benefits

College Ave Student Loans

  • Competitive fixed and variable APRs starting at 2.69%1
  • Multiple repayment options including: full principal and interest, interest-only, deferred, and flat payment
  • Flexible payment terms ranging from 5, 8, 10, and 15 years2
  • Coverage up to 100% of your school-certified cost of attendance ($1,000 minimum)3
  • No origination, application and processing fees, no fees for early repayment
  • Apply online in 3 minutes and get an instant credit decision
Learn More »

Get the money you need for school quickly and at a great price.

  • Low rates, free to apply, and no disbursement fees
  • 0.25% interest rate reduction when you make payments by automatic debit1
  • Borrow up to 100% of the school-certified cost of attendance (minimum $1,000)3
  • The most repayment choices - and help making sense of them
  • No penalty for early repayment

We get it. You want to pay as little interest as possible and have monthly payments you can afford. That's why the College Ave Student Loan Product has low rates and multiple repayment options to help you manage the total cost of the loan.

College Ave Student Loan Full Terms and Information

Sallie Mae Student Loans

  • Variable Rates: 2.75% APR - 10.65% APR (lowest rate shown includes auto debit discount). Fixed rates also available.1
  • Choose from multiple repayment options, including no payments while in school1
  • Get 24/7, online help with our exclusive Study StarterSM benefit, which includes free access to 4 months of Chegg Study® and EasyBib® Plus and 30 minutes of Chegg® Tutors6
Learn More »

Sallie Mae® Smart Option Student Loan® for Undergraduate Students

When grants, scholarships, and federal aid are not enough, choose the Smart Option Student Loan® for Undergraduate Students. You can apply for the money you need for college, and the flexibility you want.

  • Competitive variable rate starting from 2.75% APR to 10.65% APR (Competitive fixed rates also available. Lowest rate shown includes auto debit discount.)1
  • No origination fee and no prepayment penalties2
  • Easy online application accessible on all devices
  • Get a 0.25 percentage point interest rate reduction while enrolled in and making monthly payments by automatic debit3
  • You can apply for the funds you need to cover all your school-certified expenses for the entire school year including tuition, fees, books, supplies, housing, meals, travel, and even a laptop4
  • Applying with a cosigner may help you get a better rate
  • You may apply to release your cosigner from the loan after you graduate, make 12 on-time principal and interest payments and meet certain credit requirements5
Sallie Mae Student Loan Full Terms and Information

Discover® Student Loans

  • Cover up to 100% of your school-certified college costs including tuition, housing, books and more.1
  • Get a one-time cash reward for good grades.2
  • Variable rates: 1.80% - 10.37% APR3 (lowest rate shown includes an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments; lowest rates shown are for undergraduate loans)
  • Choose from in-school or deferred repayment options, and there is never a penalty for prepayment.
  • $0 fees for the life of your loan including no application, origination or late fees.
  • Apply now in 15 minutes or less.
Learn More »

Discover® Student Loans

  • Discover Student Loans provides options for Associate or Bachelor's degree programs at eligible colleges and for Masters and Doctoral degree candidates at eligible graduate schools.
  • You can borrow up to 100% of your school-certified costs (including tuition, housing, books and more). Aggregate loan limits apply.
  • Apply today! Choice of great fixed or variable interest rates.
  • Count on $0 fees, including application, origination or late fees.
  • You have the option to make either interest-only or $25 fixed, monthly payments while in school and during the grace period to lower the overall loan cost. However, you can also choose to defer payments, meaning that monthly payments are not required until after the grace period or enrollment drops below half-time.
  • Get a one-time cash reward for each new Discover undergraduate and graduate student loan when you get at least a 3.0 GPA (or equivalent). Reward redemption period is limited. 2
  • 6-month grace period for undergraduate loans and 9-month grace period for graduate loans.
  • By adding a cosigner, you may improve your likelihood for loan approval and may lower your interest rate.
  • Applying online is quick and easy and our knowledgeable, US-based Student Loan Specialists are ready to help you anytime 24/7. Tools and information at DiscoverStudentLoans.com can help students and parents through each step of the process — from exploring financial aid to repaying student loans.
Discover Student Loan Full Terms and Information

CommonBond Student Loans

  • Competitive fixed & variable rates starting at 3.66%
  • Flexible 5, 10, or 15-year terms
  • Award-winning customer service every step of the way
Learn More »

CommonBond Private Student Loan

Student loans pay for college or graduate school at thousands of schools across the country

Get the help you need to pay for school with CommonBond. We’ve got your back with competitive rates, award-winning service, borrower protections, and multiple repayment options. No hidden fees, no double-digit APRs here. And we offer resources to help you make the right personal finance choices.

We’re on a mission to make student loans more affordable, more transparent, and easier to manage. We provide choices and support every step of the way, and take pride in being a partner on your educational journey. And the best part? With CommonBond, you’ll always receive a competitive rate. No double-digit interest rates here.

Here’s what you get when you choose CommonBond:

  • Flexibility: Since everyone's financial situation is different, we provide flexibility — so you can make the best decision for yourself –
    • Borrow up to 100% of your school's cost of attendance.
    • Loan terms of 5, 10, and 15 years, each available at both fixed and variable rates.
    • Multiple repayment options, from paying as you go while in school (in exchange for a lower rate) to completely postponing payments until you graduate.
  • Service: Our award-winning Care Team is available by phone, email, and live chat to answer any questions you have. Breathe easy — our experts know what you're going through!
  • Simplicity: With our easy online application, you can get approved in minutes. There are no pre-payment penalties and no hassles. No kidding.
  • Resources: We provide expert content, helpful webinars, and easy-to-use tools to help you understand the impact of your choices — so you can make the right decisions.
  • Social Promise: Your loan makes a difference. For every loan we fund we also fund the education of a child in need. We're the first — and only — lender to make that promise.
CommonBond Private Student Loan Full Terms and Information

Find & Compare Private Student Loans for Your School: