Federal Direct Loan
View the Loan Application Process
Priority Deadline: July 1 (Applies to Traditional Undergraduate Students Only)
Federal Direct Loans are awarded to all students who complete a FAFSA, meet eligibility requirements, submit all required documentation, and are enrolled at least half-time. This loan is borrowed by the student and no credit check is required. Students may be offered a Direct Subsidized and/or Unsubsidized Loan based on financial need, which is evaluated using the data reported on the FAFSA.
Direct Subsidized Loan
With a Subsidized Direct Loan, the federal government pays the interest on the loan while the student is in school at least half-time and during authorized periods of deferment.
Direct Unsubsidized Loan
For Unsubsidized Direct Loans, students are charged interest from the time the loan is disbursed until it is paid in full. Borrowers may choose to pay the interest while they are in school, or defer payments until the end of their grace period. Any accrued interest will be capitalized and added to the principal amount of the loan at repayment, increasing the amount that must be repaid. If students choose to pay the interest as it accumulates, the long term cost of the loan will be less.
Repayment
Repayment on Direct Loans begins six months after a student graduates, withdraws, leaves school, or drops below half-time status.
| Academic year | First Disbursement | Loan Type | Interest Rate |
|---|---|---|---|
|
2024-25 |
On or after July 1, 2024 and |
Undergraduate Direct Loan: Subsidized & Unsubsidized |
6.533% |
|
2025-26 |
On or after July 1, 2025 and before July 1, 2026 |
Undergraduate Direct Loan: Subsidized & Unsubsidized |
6.39% |
Origination Fee
All Direct Subsidized and Unsubsidized Loans are subject federal origination fee which is subtracted from the loan at the time of disbursement.
| First Disbursement | Loan Fee | Fee on a Loan Amount Of |
|---|---|---|
| On or after October 1, 2020 and before October 1, 2026 |
1.057% | $58.14 on a $5,500 loan |
Annual Loan Limits
The maximum loan amount for which a student may receive in the Direct Subsidized and Unsubsidized Loan program is determined by the student’s grade level.
Grade level is determined based on the number of credits a student has completed. (The following annual maximums apply to undergraduate students.)
| Class | Credit Requirements | Annual Maximum | |
|---|---|---|---|
| Freshman | 0–29 credits | $5,500 ($3,500 subsidized) | |
| Sophomore | 30–59 credits | $6,500 ($4,500 subsidized) | |
| Junior | 60–89 credits | $7,500 ($5,500 subsidized) | |
| Senior | 90+ credits | $7,500 ($5,500 subsidized) | |
Students enrolling mid-year in an academic program, may be eligible to receive the full amount of Direct Loan funds up to the annual loan limits as specified by the federal government.
Please Note: this may result in receipt of loan funds at a higher amount in a single term due to a mid-year start date. If you later intend to enroll for all terms in an academic year, your loan funds will be equally distributed over the terms you are enrolled in. If you have questions about how this will impact any future awards, please contact the Office of Financial Aid.
Additional Unsubsidized Direct Loan
The Additional Unsubsidized Direct Loan is available to students who are either classified as “independent” according to federal guidelines, or whose parents are denied the Direct Parent PLUS Loan by the Department of Education during the application process. Additional Unsubsidized Direct Loan amounts are as follows:
| Class | Credit Requirements | Amount | |
|---|---|---|---|
| Freshman | 0–29 credits | $4,000 | |
| Sophomore | 30–59 credits | $4,000 | |
| Junior | 60–89 credits | $5,000 | |
| Senior | 90+ credits | $5,000 | |
Aggregate Loan Limits
The following aggregate maximums apply to undergraduate students.
| Condition | Maximum |
|---|---|
| Without Additional Direct Unsubsidized Loan | $31,000 ($23,000 subsidized) |
| With Additional Direct Unsubsidized Loan | $57,500 ($23,000 subsidized) |
Cal Lutheran reviews aggregate loan limits prior to awarding loans for the academic year. Students can check the amount of loans they have taken out during their academic careers at .
Federal Direct Unsubsidized Loans are fixed-rate student loans for Graduate students. These loans are "unsubsidized" because the interest accrues while the student is in school. Students can choose to pay the interest while in school, or add it to the balance of the loan when they enter repayment.
In order to be eligible for Direct Loans, a graduate student must:
- File a Free Application for Federal Student Aid (FAFSA)
- Be enrolled at least half time (at least 3 credits per semester) in a master's or doctoral program
- Be a U.S. Citizen or eligible non-citizen
- Be achieving Satisfactory Academic Progress as established by the University
- Cannot be in default on a student loan or owe a repayment on any grant funds
- Submit all documents required by the Financial Aid Office pertaining to Verification
Students pursuing only a Teaching Credential are considered fifth-year undergraduate students and follow the loan limits and credit requirements for third-year and beyond undergraduates. For more information, please visit Undergraduate Loans.
Repayment
Repayment on Direct Loans begins six months after a student graduates, withdraws, leaves school, or drops below half-time status.
| ACADEMIC YEAR | FIRST DISBURSEMENT | LOAN TYPE | INTEREST RATE |
|---|---|---|---|
|
2024-25 |
On or after July 1, 2024 and |
Graduate Direct Loan Unsubsidized |
8.083% |
|
2025-26 |
On or after July 1, 2025 and before July 1, 2026 |
Graduate Direct Loan Unsubsidized |
7.94% |
Origination Fee
All Direct Unsubsidized Loans are subject federal origination fee which is subtracted from the loan at the time of disbursement.
| First Disbursement | Loan Fee | Fee on a Loan Amount Of |
|---|---|---|
| On or after October 1, 2020 and before October 1, 2026 |
1.057% | $105.70 on a $10,000 loan |
Annual Loan Limits
Graduate and doctoral students are eligible to take out up to $20,500 per year in Direct Unsubsidized Loans.
Students enrolling mid-year in an academic program, may be eligible to receive the
full amount of Direct Unsubsidized Loan funds up to the annual loan limits as specified
by the Department of Education.
Please Note: this may result in receipt of loan funds at a higher amount in a single term due to a mid-year start date. If you later intend to enroll for all terms in an academic year, your loan funds will be equally distributed over the terms you are enrolled in. If you have questions about how this will impact any future awards, please contact the Office of Financial Aid.
Aggregate Loan Limits
Students who borrow Direct Loans have aggregate lifetime loan limits. This means that there is a maximum a student may take out in Direct Loans for his or her educational career. For Graduate and Doctoral students, the lifetime loan limit is $138,500. Of this amount, up to $65,000 may be subsidized. Students can check the amount of loans they have taken out during their academic careers at .