Federal Direct Loans

Federal Direct Loans are low-interest loans provided by the U.S. Department of Education to help students cover the cost of higher education. These loans are available to both undergraduate and graduate students, with options for Subsidized and Unsubsidized. Students must complete the Free Application for Federal Student Aid (FAFSA) to qualify. Federal Direct Loans offer flexible repayment plans and deferment options.

Types of Federal Direct Loans

Federal Direct Subsidized Student Loans

  • Need-Based: Interest is paid by the government while enrolled in at least 6 credits.
  • Grace Period: No interest charged during the six-month grace period.
  • Eligibility: Available to undergraduate students only, enrolled in 6 or more credits per semester.

Federal Direct Unsubsidized Student Loans

  • Non-Need Based: Available regardless of financial need; interest accrues immediately.
  • Interest Management: Borrowers can pay interest as it accrues or allow it to capitalize, increasing the principal loan amount.
  • Eligibility: Available to undergraduate students enrolled in 6 or more credits each semester, and graduate students enrolled in 3 or more credits each semester.

Interest Rates for 2025-2026:

(For loans first disbursed from 7/1/2025 - 7/1/2026)

  • Undergraduate Subsidized & Unsubsidized Loans: 6.39%
  • Graduate Unsubsidized Loans: 7.94%

Loan Origination Fee:

Loans disbursed between Oct. 1, 2020, and Oct. 1, 2025, incur a . Only 98.943% of the gross loan amount is disbursed.

Use our Loan Origination Fee Calculator to determine your gross and net amount.

Repayment:

Begins six months after graduation or if enrolled in fewer than 6 credits (3 credits for graduate students). A will be assigned to communicate with students regarding repayment options.

Note: Borrowers may without penalties.

How to Apply

  1. FAFSA: Complete the to apply for financial aid, including loans. After submission, you will receive a financial aid offer letter detailing your eligibility.
  2. Loan Acceptance:
    • Review your Financial Aid Plan.
    • Accept or decline loans through BU BRAIN Self Service under the Financial Aid tab.
    • First-time borrowers must complete a and online
    • Note: Loans may only be accepted/adjusted during the academic year.  After the academic year ends, no further adjustments can be made.

Loan Limits

Undergraduate Loan Limits (Dependent):

  • Freshman: $5,500 ($3,500 may be subsidized)
  • Sophomore: $6,500 ($4,500 may be subsidized)
  • Junior/Senior: $7,500 ($5,500 may be subsidized)

Undergraduate Loan Limits (Independent):

  • Freshman: $9,500 ($3,500 may be subsidized)
  • Sophomore: $10,500 ($4,500 may be subsidized)
  • Junior/Senior: $12,500 ($5,500 may be subsidized)

Graduate Loan Limit:

  • Up to $20,500 in unsubsidized loans each year.
  • Students in specific programs (Doctor of Pharmacy, PhD in Psychology, Clinical Science and Master of Public Health) may borrow up to $33,000 annually.

Total Aggregate Loan Limits

  • Dependent Undergraduate: $31,000 (max $23,000 subsidized)
  • Independent Undergraduate: $57,500 (max $23,000 subsidized)
  • Graduate Students: $138,500 (includes all borrowing)
  • Doctor of Pharmacy, PhD in Psychology, Clinical Science and Master of Public Health: $224,000 (includes all borrowing)