Federal Subsidized and Unsubsidized Direct Student Loans (FDSL)

Comparison of Federal Direct Loans

Direct Subsidized LoanDirect Unsubsidized Loan
Undergraduate students demonstrating financial needUndergraduate and graduate students do not need to prove financial need
Institution determines amount that can be borrowed based on Cost of Attendance and other aid receivedInstitution determines amount that can be borrowed based on Cost of Attendance and expected family contribution (EFC)
U.S. Department of Education pays the interest on a Direct Subsidized Loan while you are in school at least half-timeThe U.S. Department of Education does not pay the interest on a Direct Unsubsidized Loan while you are in school at least half-time
You will not pay interest for six months after you graduate or during defermentInterest will accrue (accumulate) and be capitalized (that is, your interest will be added to the principal amount of your loan) if you do not pay while attending, during deferment, or forbearance

2022-2023 Interest Rates for Direct Loans

Loan TypeInterest Rate
July 1, 2022 – July 1, 2023
JULY 1, 2023 – JULY 1, 2024
Undergraduate Direct Subsidized & Unsubsidized Loans4.99%5.50%
Graduate Direct Unsubsidized Loans6.54%7.05%
Parent and Graduate Direct PLUS Loans7.54%8.05%

Rates apply to loans first disbursed on or after July 1, 2023 and before July 1, 2024.

There is a loan fee on all Direct Subsidized Loans and Direct Unsubsidized Loans. The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement. The percentage varies depending on when the loan is first disbursed, as shown in the chart below.

Fees by Loan Type (%)

Loan TypeFee
Direct Subsidized and Unsubsidized Loans1.057%
Direct PLUS (Graduate Students/Parents)4.228%

Rates apply to loans first disbursed on or after October 1, 2020 and before October 1, 2022.

Your borrowing limit will depend on your status (independent or dependent) and your class status (i.e. freshman).

Annual Limits for Loans Disbursement, July 2012 and Onward

Annual LimitsDependent StudentsIndependent Students*
Undergraduate prerequisite2,6258,625
First Year Undergraduate or
(0-29 credit hours earned)
Second Year Undergraduate or (30-59 credit hours earned)6,50010,500
Third year + Undergraduate (60 + credit hours earned)7,50012,500
Graduate Prerequisite, Teacher Certification or License Renewal5,50012,500
Graduate / ProfessionalN/A20,500

* Includes dependent graduate students whose parents are unable to obtain a PLUS Loan.

In addition to the annual borrowing limits, there is also and aggregate, or cumulative, lifetime borrowing limit.

Annual Cumulative Borrowing Limits ($)

Aggregate LimitsSubsidizedTotal
Dependent Undergraduate, Teacher Certification, License Renewal or Prerequisite23,00031,000
Independent Undergraduate, Teacher Certification, or License Renewal or Prerequisite23,00057,500
Graduate / Professional65,500138,500

Federal Direct Subsidized and Unsubsidized Loan Repayment

Repayment can be managed on the website of your loan servicer, which will be assigned to you by the U.S. Department of Education. While the interest rate on the loan is fixed, interest starts accruing on the loan at the time of disbursement to Tarleton State University. Payments can be deferred until after graduation, as long as you are enrolled at least half-time. Accrued interest can either be paid quarterly while you are in school or capitalized (added) to the loan when you enter repayment. You will accrue future interest based on the principle balance while in repayment. The U.S. Department of Education has a Loan Repayment Estimator you can use to help estimate your loan repayment options.

Additional Steps for First-time Borrowers

The Master Promissory Note (MPN) is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the U.S. Department of Education. It also explains the terms and conditions of your loan(s). Unless your school does not allow more than one loan to be made under the same MPN, you can borrow additional Direct Loans on a single MPN for up to 10 years.

Entrance Counseling is a tool to ensure you understand your obligation to repay the loan and agree to the terms of the loan.

You will be notified through myGateway to complete the MPN and Entrance Counseling.

Additional Information

If you have other questions about interest, please email the Office of Financial Aid, or call us at 254-968-9070.

he Department of Education deducts the origination fee before you receive any loan money, so the loan amount you receive will be less than the amount you will have to repay.