Federal Direct Loans

If you’re an undergraduate or graduate student, you can apply for a Federal Direct Loan regardless of financial need or credit history. To apply for a Federal Direct Loan, you must file your FAFSA each year and meet the eligibility requirements:

• You must be enrolled at least half time. If you’re enrolled less than full time for an academic year, your annual loan limits are adjusted downward proportionally based on your level of enrollment.
  • Undergraduate half time: six credit hours
  • Graduate half time: four credit hours
• You must be a U.S. citizen or national, a U.S. permanent resident, or an eligible noncitizen.

What your loan pays for

If you meet all requirements, you can borrow up to an annual maximum and a lifetime maximum. Your loan will pay for your tuition, fees, room and board, books, and other education-related expenses. Any funds that remain after these items are paid will be refunded to you.

What do subsidized and unsubsidized mean?

There are two types of Federal Direct Loans: subsidized and unsubsidized.

Subsidized loans

Direct Subsidized Loans are available to undergraduate students whose Student Aid Index shows that they need money for college. If you get a Direct Subsidized Loan, the U.S. Department of Education pays any interest that accrues while you’re enrolled at least half time. (Note that there are certain situations where you’ll become responsible for paying interest on the loan.)

Unsubsidized loans

Direct Unsubsidized Loans are available to both undergraduate and graduate students. You do not need to show financial need to qualify. You’re responsible for paying all interest on the loan.

If you’re preparing for grad school

If you have received a bachelor’s degree and are taking preparatory coursework to gain admission to an IU Bloomington graduate program, you may be able to receive Federal Direct Loans for up to 12 months. You’ll need to submit a preparatory coursework appeal to be eligible.