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Federal Direct Loan for Undergraduate Students

What You Need to Know

These loan funds are made available by the U.S. Department of Education to students who apply for federal aid consideration. The University of Dayton’s Office of Financial Aid will determine your eligibility for the funds after a careful review of your FAFSA results.

The program offers students the chance to borrow while enrolled at least half-time at an eligible institution. The student is the borrower on a Direct Subsidized or Unsubsidized Loan. The maximum annual amount that you may borrow under the Federal Direct Loan program depends on your degree program, class level and dependency status.

maximum Annual Amount
Class Level: Credit
First Year 0-29 $5,5001 $9,5001
Second Year 30-59 $6,5002 $10,5002
Third Year 60-89 $7,5003 $12,5003
Fourth Year+ 90+ $7,5003 $12,5003

1maximum of $3,500 subsidized
2maximum of $4,500 subsidized
3maximum of $5,500 subsidized

Federal Direct Loans for undergraduates will have a fixed interest rate. The interest on a subsidized loan will be paid for by the federal government until the loan enters the grace period. Unsubsidized loan interest will begin to accrue upon disbursement and will be capitalized onto the principal balance at repayment unless paid by the borrower during the in-school and grace period. Find current rates on

The U.S. Department of Education will retain an origination fee on any loan disbursement, which is a percentage of the principal loan amount. Therefore, be sure to account for this when determining the amount to borrow. Find current fees on