Federal Direct Subsidized and Unsubsidized Loans

Direct Subsidized and Unsubsidized Loans are federal student loans available to eligible students to assist with the costs of higher education. Your eligibility for these loans is evaluated based on a complete current year Free Application for Federal Student Aid (FAFSA) and school information. Students may receive both types of loans, but are subject to annual and career limits.

Direct Subsidized Loans are available to eligible undergraduate students.  You must have financial need as determined by the Student Financial Aid Office and have not exceeded your annual or lifetime aggregate loan limits. The U.S. Department of Education pays the interest on this loan while you are enrolled at least half-time in a degree-seeking status or approved non-degree status and for authorized periods of grace and deferments.

Direct Unsubsidized Loans are available to eligible undergraduate, graduate, and professional students, and there is no requirement to demonstrate financial need. If awarded, your award amount will be based on your unmet Cost of Attendance and your remaining annual and lifetime loan limits. You are responsible for paying the interest on a Direct Unsubsidized Loan during all periods, and if you choose not to pay the interest while in school and during grace, deferment, and/or forbearance periods, your interest will accrue and be capitalized.

For more information regarding Direct Stafford Loans, such as interest rates, loan limits (annual and career), repayment, and more please visit U.S. Department of Education's Federal Student Aid website.

Step By Step Direct Subsidized and Unsubsidized Loan Instructions

  1. You must file a FAFSA and receive an award notification from our office listing a Direct Subsidized and/or Unsubsidized Loan offer(s).

  2. You may initially accept, reduce, or decline the loan(s) on ULink using the option Accept/Decline Financial Aid under the Financial Aid section on the Student Services tab. You may review your student account activity on ULink using the Account option under the Tuition, Fees, Payment Options section on the Student Services tab. For assistance with ULink, review our ULink Financial Aid tutorials.

  3. If you are accepting a loan offer(s), you must be enrolled at least half-time in an eligible degree program or have approved non-degree status for the funds to disburse to your account. Half-time for undergraduates is 6 hours and half-time for graduate/professional students is 4.5 hours in fall and spring, and 3 hours in summer. You must continue to meet all other federal eligibility requirements.

  4. If you are a first-time Direct Subsidized and Unsubsidized Loan borrower at UofL, you must complete an Entrance Counseling session to be informed of your rights and responsibilities and to ensure you understand your obligation to repay the loan.

  5. If you are a first time Direct Subsidized/Unsubsidized Loan borrower, you must complete a Master Promissory Note (MPN) agreeing to the terms of the loan(s). Please note if you previously borrowed from a FFEL lender/bank, you will need a new MPN with Direct Loans. Before going to the MPN website be sure to have

    1. Your social security number.
    2. Your driver’s license number.
    3. Your permanent address and telephone number.
    4. Information for two references, including names, addresses, and telephone numbers.
  • Use calculators provided by U.S. Department of Education to see what your loan repayment will look like.
  • If you are eligible for Direct Subsidized Loan funds, you should borrow the maximum amount prior to accepting any Direct Unsubsidized funds. Direct Subsidized Loans have slightly better terms to help out students with financial need.