Federal Pell Grant

A Federal Pell Grant, unlike a loan, does not have to be repaid. Pell grants are awarded to students who demonstrate financial need and who have not yet earned a bachelor’s or professional degree. The maximum award for the 2021 – 2022 award year (July 1, 2021 to June 30, 2022) is $6,495. The amount of Federal Pell Grant funds you may receive over your lifetime is limited by federal law to be the equivalent of six years of Pell grant funding. Since the maximum amount of Federal Pell Grant funding you can receive each year is equal to 100%, the six year equivalent is 600%.

The Pell Grant amount awarded will depend on:

  • Financial need
  • Cost of Attendance
  • Enrollment Status

You may not receive Federal Pell Grant funds from more than one school at a time.

Federal Direct Loan Program

Direct Loans, from the William D. Ford Federal Direct Loan Program, are low-interest loans for eligible students to help cover the cost of higher education at a four-year college or university, community college, trade, career or technical school. Eligible students borrow directly from the U.S. Department of Education at participating schools.

There are several benefits in using the Direct Loan Program:

  • A Direct Loan is a source of funding for student loans.
  • The option of an income-contingent repayment plan or an income-based repayment plan when you enter repayment. This means you will have the option of ensuring that your loan repayment amount will always be affordable based on what your income will allow.
  • Students in the Direct Loan program who enter into public service jobs can have any remaining balance on their loans forgiven after ten years of public service work. (While this option does not exist in the FFEL program, students who borrowed in that program can consolidate their loans into the DL program in order to take advantage of this forgiveness program.)
  • Most lenders offer benefits during repayment after a student makes payments from 2 to 4 years. Very few students end up receiving those benefits. In DL, students earn benefits after only 1 year.
  • Should a student make payments late under DL, the late fees charged are less than the late fees charged in the FFEL Program.

Federal Direct Loans

  • A Direct Subsidized Loan is awarded on the basis of the student’s financial need and other specific eligibility requirements. The federal government does not charge interest on these loans while borrowers are enrolled at least half-time, during a six-month grace period, or during authorized periods of deferment.
  • A Direct Unsubsidized Loan is not based on the student’s financial need, but students must also meet specific eligibility requirements. Interest is charged throughout the life of the loan. The borrower may choose to pay the interest charged on the loan or allow the interest to be capitalized (added to the loan principal).
  • A Direct PLUS Loan is a federal loan that graduate or professional degree students and parents of dependent undergraduate students can use to help pay education expenses. The U.S. Department of Education makes Direct PLUS Loans to eligible borrowers through schools participating in the Direct Loan Program.

Federal Subsidized Student Loan Borrowing Limitations

As of July 1, 2013, a first-time Federal Subsidized Student Loan borrower is no longer eligible for the Subsidized Student Loan program if he or she exceeds 150% of the published length necessary to graduate within an undergraduate degree program.

In addition, a borrower reaching the 150% limit becomes ineligible for the interest subsidy benefits on all Federal Subsidized Loans disbursed to the borrower on or after July 1, 2013.

Direct Loan Resource Center

In order to receive federal student loans, you must complete certain requirements. The Department of Education has created a website (www.studentaid.gov) to manage borrower requirements and provide valuable information regarding federal student loans. The three items listed below are required from all borrowers.

  • Entrance Interview
    To ensure that you understand your rights and responsibilities as a student loan borrower, the Federal Government requires you to participate in loan counseling before receiving a Direct Loan, if you have not previously received a Direct Loan, Federal Family Education Loan or Supplemental Loans to Students (SLS) Loan.
  • Sign Master Promissory Note (MPN)
    The Master Promissory Note, commonly referred to as MPN, is a document that must be signed in order to receive a federal student loan.  The signed MPN binds you to the federal government as a promise to repay the student loan you intend to take out to help cover your educational expenses. The MPN provides valuable information about the rights and responsibilities you have as a borrower.
  • Exit Interview
    Prior to graduating or leaving school, Direct Loan borrowers must complete exit counseling. The Direct Loan Exit Counseling will explain your rights and responsibilities as a Direct Loan Borrower. Your Federal PIN is required in order to complete the Exit Interview because your personal loan information will be provided.

Annual Direct Loan Limits – Effective July 1, 2013

Dependent Students

Freshman: $3,500 Base Amount, $2,000 Additional Unsubsidized Loan Amount for a total of $5,500

Sophomore: $4,500 Base Amount, $2,000 Additional Unsubsidized Loan Amount for a total of $6,500

Junior or Senior: $5,500 Base Amount, $2,000 Additional Unsubsidized Loan Amount for a total of $7,500

Independent Students

Freshman: $3,500 Base Amount, $6,000 Additional Unsubsidized Loan Amount for a total of $9,500

Sophomore: $4,500 Base Amount, $6,000 Additional Unsubsidized Loan Amount for a total of $10,500

Junior or Senior: $5,500 Base Amount, $7,000 Additional Unsubsidized Loan Amount for a total of $12,500

Graduate Students: $0 Base Amount, $20,500 Additional Unsubsidized Loan Amount for a total of $20,500

Note: It is important to note that even if a student is financing their education on their own, dependency status is still determined by the school.

Undergraduate Grade Level Determination

Any student pursuing an undergraduate degree must be classified by grade level, as well as meet grade level progression in order to comply with the requirements of FSA and the William D. Ford Federal Direct Loan (Direct Loan) Program.  Graduate students do not have grade level requirements.

Please refer to the table below to determine the grade level or the progression rate for an undergraduate student.

Freshman (Year 1)

Sophomore (Year 2)

Junior (Year 3)

Senior (Year 4)

0-29 Credits

30-59 Credits

60-89 Credits

90+ Credits

Current Interest Rates

Congress has passed the Bipartisan Student Loan Certainty Act of 2013, which ties federal student loan interest rates to financial markets. Under this Act, interest rates will be determined each June for new loans being made for the upcoming award year, which runs from July 1 to the following June 30. Each loan will have a fixed interest rate for the life of the loan.

The following table provides the interest rates for new Direct Loans made on or after July 1, 2021, and before July 1, 2022. These rates will apply to all new Direct Loans made during this time.


Direct Subsidized Loans (Undergraduates) = 3.73% Interest Rate

Direct Unsubsidized Loans (Undergraduates) = 5.28% Interest Rate

Direct Unsubsidized Loans (Graduate or Professional Students) = 5.28% Interest Rate

Direct PLUS loans (Parents and Graduate or Professional Students) = 6.28% Interest Rate

Learn about interest rates and fees associated with federal student loans.