Federal Direct Loans

Section Navigation

What you need to know about Federal Direct and Direct PLUS Loans

To receive a Direct Loan, students must be registered for at least six credit hours per semester. You have been packaged with the maximum amount available to you at your grade level.   Eligibility for a Subsidized Direct Loan (Sub) is based on the federal need analysis formula.   The government pays the interest while you are enrolled for at least six hours per semester.   The Unsubsidized Direct Loan (Unsub) is not based on need and the student is responsible for the interest that accrues while attending school.   Interest can be deferred while in school, but it will be capitalized (added on the principal balance of the loan) at repayment, which occurs six months after leaving school.

Federal Direct Loan Limits

Dependent Students*Base Amount
Sub or Unsub.
Additional Unsubsidized
Loan Amount
Freshman $3,500 $2,000
Sophomore $4,500 $2,000
Junior or Senior $5,500 $2,000
Independent Undergraduate Students and Dependent Students** Base Amount
Sub or Unsub.
Additional Unsubsidized
Loan Amount
Freshman $3,500 $2,000 + $4,000
Sophomore $4,500 $2,000 + $4,000
Junior or Senior $5,500 $2,000 + $5,000
Graduate and Professional Students Base Amount
Additional Unsubsidized
Loan Amount

*Except Students Whose Parents Cannot Borrow a PLUS Loan
**Whose Parents Cannot Borrow a PLUS Loan

Aggregate Loan Limits (Effective July 1, 2008)

  • Undergraduate Dependent Students - $31,000 (no more than $23,000 can be subsidized).
  • Undergraduate Independent Students - $57,500 (no more than $23,000 can be subsidized).
  • Graduate and Professional Students - Currently $138,500 (no more than $65,500 can be subsidized).

The Office of Financial Aid will electronically transmit your loan eligibility for your Federal Direct Loan to the Federal Government around July 1 of each year. 

  • You may reduce or reject your Direct Loan at any time in writing. Follow the instructions on your award letter.
  • First-time borrowers are required to complete a Master Promissory Note and the Direct Loan Entrance Interview: go to Studentaid.gov.  
  • If you are a freshman, your first disbursement will be credited to your account after October 1.

Direct Loan Entrance Counseling

First-time borrowers are required to complete Direct Loan Entrance Counseling at studentaid.gov prior to receiving the first disbursement of a Direct Loan. However, a borrower who is receiving their first Direct Loan is not required to complete Entrance Counseling if they had previously received the same type of loan through the Federal Family Education Loan (FFEL) Program. If the borrower is receiving their first Direct PLUS Loan (as a graduate student), but had never received a prior FFEL PLUS Loan, the borrower would be required to complete Direct PLUS Entrance Counseling.  

Note: Parent borrowers are not required to complete entrance counseling.

This online counseling session will take approximately 30 minutes to complete. The borrower must complete the counseling session in one sitting in order for it to be recorded in the system. You will need your FSA ID to confirm your identity.

Once the counseling session is completed, the borrower will have several options:

  1. Complete and submit a Direct Loan Master Promissory Note (MPN).   The borrower can complete an MPN immediately following the counseling session or may log out and complete the MPN at a later time.  
  2. View and upload a completed counseling verification page.
  3. Complete and submit a Direct Loan PLUS Request.   (This option only appears if the borrower indicated that he or she is a graduate student during Step 1 of the counseling session.)
  4. Print the current counseling verification page.  

Direct Loan Master Promissory Note

If you are a first time borrower, a continuing NU student or a new transfer student, you will be required to sign your Direct Loan Master Promissory Note (MPN). You can go to StudentAid.gov and complete the MPN electronically.

You will need/expect the following:

  1. Your FSA ID to confirm your identity  
  2. Disclosure and Consent
  3. Provide Name and School
  4. Complete MPN
  5. Review/Read Draft MPN
  6. Sign your MPN
  7. Review signed MPN/Enter Confirmation Code
  8. Confirm Acceptance of MPN Terms and Submit MPN
  9. Print your MPN!

About Federal Direct Loan Interest Rates and Fees

If you have loans from prior years you may have a fixed interest rate of 6.8 percent for loans processed after June 30, 2006 or a variable rate that cannot exceed 8.25 percent.    

As of July 1, 2021, the interest rate for both the undergraduate Direct Subsidized Loan and Direct Unsubsidized Loan is fixed at 3.73 percent. The graduate Direct Unsubsidized Loan has a fixed interest rate of 5.28 percent. These interest rates are set by the federal government and are subject to change annually on July 1st. There is a 1.057% origination fee for all loans.

Sample Repayment Schedule for Direct Subsidized and Unsubsidized Loans

Processed after July 1, 2021

Subsidized and Unsubsidized fixed at 3.73 percent interest(for undergraduates only)

Loan AmountNo. of PaymentsMonthly PaymentTotal Repaid
$5,500 120 $58 $7,015
$12,000 120 $128 $15,305
$19,500 120 $207 $24,871
$27,000 120 $287 $34,436

Fixed 5.28 percent interest rate for Graduate Unsubsidized

Loan AmountNo. of PaymentsMonthly PaymentTotal Repaid
$20,500 120 $224 $29,323
$41,000 120 $449 $58,646
$61,500 120 $733 $87,968
$82,000 120 $977 $117,291

Direct Plus Loans for Parents and Graduate Students

Direct  PLUS Loans are an option to bridge the gap between the cost of attendance and our financial aid package.   Direct PLUS Loans are for either parents or step-parents of undergraduate students, and graduate students borrowing on their own.   Borrowers must be US citizens or an eligible non-citizen, by federal definition.   Loan approval is subject to credit criteria established by the US Department of Education.   A credit report will be obtained from a national credit bureau once you submit a request for approval.  

The following conditions are considered adverse credit history and may cause the application to be initially denied:  

  • Any open account that is currently 90 or more days past due.
  • Any account (open or closed) that was charged off (written off), or placed in collection, during the two years preceding the date of the credit report with a balance greater than zero.
  • Borrower's wages were garnished; Deed in Lieu is being reported; has had a foreclosure; has had a State, County or Federal Tax Lien in the past 5 years preceding the date of the credit report.
  • Borrower has had a repossession, or any involuntary repossession, with the past 5 years preceding the date of the credit report.
  • Mortgage account has the loan listed as having the foreclosure process started.
  • Any Title IV debt that is currently in default.

Proof of extenuating circumstances may allow you to qualify for a PLUS loan.

Direct Plus Loan Features

  • Borrowing Limits - Eligibility is determined by the cost of attendance less financial aid.
  • Interest Rates - The interest rate is fixed at 6.28 percent for PLUS loans effective July 1, 2021 and is subject to change on July 1, 2022.
  • Fees - PLUS Loans have a 4.228 percent loan origination fee.
  • Disbursements - PLUS Loan proceeds are sent directly to the university and are generally disbursed in two equal amounts at the beginning of each school term. The funds are sent by Electronic Funds Transfer.
  • Repayment - You are required to apply for a Direct PLUS Loan each time you need a new one.   Repayment of your Direct PLUS Loan may be deferred until six months after the student ceases to be enrolled at least six hours per semester.   The minimum repayment of principal and interest is $50.   The maximum repayment period is 10 years.   In school deferments are available for up to 5 years in some cases.


  • Can be used to supplement the student’s Direct Loan funding and even cover up to the Features and   full cost of attendance (less financial aid).
  • Benefits Not dependent on your family’s income or assets; a credit check is required.
  • No employment requirement
  • Does not require collateral, but may need an Endorser (co-signer).
  • Payments can be postponed up to three years in cases of economic hardship when in repayment.
  • Pre-payment can be made at any time without penalty.
  • The loan will be forgiven in full in the event of permanent disability of the borrower or death of the borrower or student.

PLUS Loan Sample Repayment Schedule at 6.28 Percent Fixed Interest Rate

Loan AmountsNumber of PaymentsPayment AmountsTotal Repaid
$4,000 120 $50 $5,722
$6,000 120 $72 $8,582
$10,000 120 $119 $14,304
$15,000 120 $179 $21,456
$20,000 120 $238 $28,608
$25,000 120 $298 $35,759
$30,000 120 $358 $42,960
$35,000 120 $417 $50,063
$40,000 120 $477 $57,215
$ 50,000 120 $596 $71,519

If your Federal PLUS Loan is not listed as pending aid on the second bill, you need to contact the Financial Aid Office

 How to Apply for a Direct PLUS Loan

Parents, or Graduate students, interested in borrowing through the PLUS Loan program for the 2021-22 year are requested to wait until June 1, 2021 to apply. 

  • You will go to StudentAid.gov to begin the application process.
  • Log in. You will need your FSA ID for this.
  • Request either the Parent PLUS loan or the Graduate PLUS loan. PLUS loans are available to parents of dependent undergraduate students enrolled at least half time in an eligible program at an eligible school. These are low-interest, unsubsidized loans available to parents to supplement their children's aid package, up to the school's cost of attendance. Graduate and professional degree students may borrow under the PLUS Loan program up to their school's cost of attendance minus other financial assistance. Other financial assistance includes Direct Subsidized Loans, Direct Unsubsidized loan, scholarships and grants.
  • Upon approval, your loan application information will be sent to the University electronically for certification and disbursement. Note: You will not see your PLUS Loan amount listed in our Financial Aid package unless you have applied for and have been accepted for this loan, and the school has certified the loan.
  • Dependent undergraduate students whose parents are unable to get a PLUS loan may borrow additional amounts above the subsidized loan maximums.   Contact the Financial Aid Office for more information.