Loans

Federal Direct Loans
Eligibility Requirements

Federal Direct Loans are available to most IU students, regardless of financial need or credit history. You can apply for a Direct Loan if:

  • You are a U.S. citizen or national, a U.S. permanent resident, or eligible noncitizen
  • You maintain at least half-time student status (six credit hours for undergraduates, four credit hours for graduate students)

Loans can be used to pay for tuition and fees, room and board, books, and other education-related expenses. You must reapply for Direct Loans every year by filing a Free Application for Federal Student Aid (FAFSA). An origination fee of 1 percent applies to all Direct Loans.

Types of Direct Loans

There are two types of Direct Loan: subsidized and unsubsidized.

Subsidized Direct Loans

  • Available to undergraduate students only
  • Must have demonstrated financial need
  • U.S. Department of Education pays interest that accrues while recipient is enrolled at least half time
  • Available at lower interest rate than unsubsidized Direct Loans
  • Interest rates are subject to change every July 1

Unsubsidized Direct Loans

  • Available to undergraduate and graduate students
  • Do not have to demonstrate financial need to qualify
  • Available at a higher rate of interest than subsidized Direct Loans
  • Recipient pays all accrued interest
How Much You Can Borrow
Annual Maximum If Eligible
Status Dependent Student
Maximum Subsidized Direct Loan if Eligible Maximum Total Direct Loan (Subsidized and/or Unsubsidized) if Eligible
Freshman $3,500 $5,500
Sophomore $4,500 $6,500
Junior/Senior $5,500 $7,500
Graduate or Professional N/A N/A
Status Independent Student
Maximum Subsidized Direct Loan if Eligible Maximum Total Direct Loan (Subsidized and/or Unsubsidized) if Eligible
Freshman $3,500 $9,500
Sophomore $4,500 $10,500
Junior/Senior $5,500 $12,500
Graduate or Professional N/A $20,500

Lifetime Maximums If Eligible

Status Maximum Subsidized Direct Loan if Eligible Maximum Total direct Loan (Subsidized and/or Unsubsidized) if Eligible
Undergraduate Dependent Student $23,000 $31,000
Undergraduate Independent Student $23,000 $57,500
Graduate/Professional $65,500 $138,500
Doctoral Optometry $65,500 $224,000

Time Limit to receive Subsidized Direct Loans

First-time borrowers on or after July 1, 2013 need to be aware of limits on the maximum period of time that you can receive Direct Subsidized Loans. You may only receive Direct Subsidized Loans for up to 150% of the published length of your program. For example, if you are enrolled in a four-year bachelor’s degree program the maximum period for which you can receive Direct Subsidized Loans is 6 years (150% of 4 years = 6 years). There are some enrollment situations where you may become responsible for paying the interest that accrues on your Direct Subsidized Loan. Be prepared and view the chart at Federal Student Aid.

Loan Exit Counseling

When you are about to graduate or drop below half-time enrollment, you will be asked to complete Loan Exit Counseling. Exit Counseling is an interactive tool that will provide you with information on repaying your federal student loans. You will receive an email from our office notifying you how to complete the exit counseling process. You can also find information at the Federal Student Loans website.

Repaying Federal Direct Loans

Repayment begins six months after you graduate or drop below half-time status.

Additional student loan repayment information is available through the U.S. Department of Education Federal Student Aid website.

You can also start thinking about repayment options now by taking the following steps:

Apply for a Federal Direct Loan

If you complete the FAFSA, you will automatically be considered for a Federal Direct Loan in addition to other federal student aid programs. Learn how to apply for aid »