Federal Direct Loan Basics

Subsidized Loans

There are two types of Federal Direct Loans, subsidized and unsubsidized. Subsidized Loans are given on the basis of financial need. Financial need is determined by subtracting the Estimated Family Contribution (EFC), provided from the FAFSA, from the cost of attendance. If your financial need is not fully met through other forms of aid (including grants and scholarships), you are eligible for Subsidized Loan funds up to the remaining amount of your financial need or up to the loan limits based on your grade level, whichever amount is lower. The Federal Government will pay interest on a Subsidized Loan while you are in school.

Please Note: There are significant changes to graduate students’ eligibility for student loans in 2012-13 as a result of the Budget Control Act of 2011.  Effective July 1, 2012, graduate students are no longer eligible to borrow subsidized loans – those in which the federal government pays the interest while the borrower is enrolled in school.  This does not affect your loan limits or the total amount that you can borrow.  It does mean that interest will begin accruing on all federal student loans which you borrow in 2012-13 and beyond.  The changes will not impact loans you’ve borrowed in the past.

Unsubsidized Loans

If you do not demonstrate financial need or if your need is fully met by other aid funds, and your full cost of attendance is not met by your other aid, you are eligible for a Federal Unsubsidized Direct Loan. If you accept the Unsubsidized Loan, interest will accrue while you are enrolled. You are not required to make payments on the loan as long as you remain enrolled at least half time.

Loan Limits

Freshmen $5500
Sophomores $6500
Juniors $7500
Seniors $7500
Graduate students $20,500
Veterinary students $40,500

View loan limits at the Office of the US Dept of Education

Independent students and students whose parents were denied for a PLUS loan are eligible for additional funding through the Federal Unsubsidized Direct Loan program. Contact your Financial Aid Counselor for more information.

Interest Rates

Current interest rates on all Federal Direct Loans are fixed.

Academic Year Rate on Subsidized/Unsubsidized loans for undergraduates Rate on Unsubsidized loans for grad students Rate on Grad Plus and Plus for undergraduates

View loan interest rates at the Office of the US Dept of Education

How do I apply for a loan?

Complete the FAFSA online to apply for financial aid. For more information on applying, please visit Steps to Apply.

  1. Accept your loan through MyPack PortalAll eligible students are offered a Federal Direct Loan. You may accept the full amount, a reduced amount, or you may decline it entirely.
  2. Complete the Master Promissory Note (MPN) and Loan CounselingNC State’s Office of Scholarships and Financial Aid will originate your loan electronically with the US Department of Education.  If this is your first Direct Loan, you must sign a Direct Loan Master Promissory Note (MPN) via the web and complete Entrance Loan Counseling at www.StudentLoans.gov to review a copy of the MPN please visit Sample Master Promissory Notes and Communications.
  3. Receive your loan fundsAfter you have signed the MPN and you have completed Entrance Loan Counseling, your loan will be scheduled for disbursement. If your loan is for the full academic year, your loan will be disbursed in two equal disbursements – one at the beginning of the fall semester and one at the beginning of the spring semester. Your loan funds will first offset any outstanding charges you owe the university for the semester, and after your charges are paid in full, a refund of any excess loan proceeds will be disbursed to you either by check or by direct deposit.

The National Student Loan Data System (NSLDS) is the US Department of Education’s centralized resource for information about all federal student loans that you have borrowed. You can find information about all of your current and prior student loans, even those you may have borrowed at a prior college or university.

NC State University adheres to the Code of Conduct which was created by the UNC System regarding the university’s relationship to lenders. The goal of the Office of Scholarships and Financial Aid is to provide students with information they need to make good decisions about borrowing, and to select the types of loan(s) and the lender(s) that offer the best terms for their particular needs.