Federal Direct Loan Terms
Subsidized Loan
The Subsidized Direct Loan is offered to undergraduate students with a Student Aid Index that demonstrates eligibility on the basis of federal need and who meet other eligibility criteria. Interest starts to accrue after the 6-month grace period and throughout the repayment period. The interest rateA loan expense charged a borrower for the use of borrowed money. Interest is calculated as a percentage of the principal of the loan, which includes the original amount borrowed and any capitalized interest. for subsidizedA Subsidized Federal Direct Student Loan is made on the basis of the borrower’s financial need (FAFSA) and other specific eligibility requirements. The federal government pays the interest on subsidized loans while the borrower is enrolled at least half time, during the grace period, or during periods of deferment. loans with a first disbursementThe process of sending the proceeds of an educational loan to Boston University Student Accounting Services, usually at the start of each semester. occurring after June 30, 2024 and prior to July 1 2025 is 6.53%, fixed for the life of the loan.
Unsubsidized Loan
The UnsubsidizedAn Unsubsidized Federal Direct Student Loan is made to a borrower meeting specific eligibility requirements, but not based on financial need (FAFSA). The borrower is responsible for paying all interest that accrues throughout the life of an unsubsidized loan. During in-school status, deferment, and forbearance periods, the borrower may choose to pay the interest charged on the loan or allow the interest to be capitalized. Direct Loan is offered to students who do not qualify on the basis of their Student Aid IndexCollege financial aid offices use the Student Aid Index (SAI) to determine how much federal student aid you may be able to receive. The SAI is calculated using information from your FAFSA form. BU Financial Assistance uses information reported on the CSS Profile to determine eligibility for Boston University scholarships, not the SAI. for a subsidized loanA Subsidized Federal Direct Student Loan is made on the basis of the borrower’s financial need (FAFSA) and other specific eligibility requirements. The federal government pays the interest on subsidized loans while the borrower is enrolled at least half time, during the grace period, or during periods of deferment., or who qualify for only a portion of the subsidized loanA Subsidized Federal Direct Student Loan is made on the basis of the borrower’s financial need (FAFSA) and other specific eligibility requirements. The federal government pays the interest on subsidized loans while the borrower is enrolled at least half time, during the grace period, or during periods of deferment. annual limit. Interest is charged on an unsubsidized loanAn Unsubsidized Federal Direct Student Loan is made to a borrower meeting specific eligibility requirements, but not based on financial need (FAFSA). The borrower is responsible for paying all interest that accrues throughout the life of an unsubsidized loan. During in-school status, deferment, and forbearance periods, the borrower may choose to pay the interest charged on the loan or allow the interest to be capitalized. while the student is enrolled in school, beginning after the loan is fully disbursed. Students may elect to pay the interest or have it capitalizedUnpaid, accumulated interest that is added to the loan principal. Because the principal increases, so does the total cost of the loan. (added to the principalThe principal or loan balance is the amount of money borrowed or remaining unpaid on a loan. Interest is charged as a percentage of the principal. Insurance and origination fees will be deducted from this amount before disbursement.) and pay it during the repayment period. The interest rateA loan expense charged a borrower for the use of borrowed money. Interest is calculated as a percentage of the principal of the loan, which includes the original amount borrowed and any capitalized interest. for undergraduate unsubsidizedAn Unsubsidized Federal Direct Student Loan is made to a borrower meeting specific eligibility requirements, but not based on financial need (FAFSA). The borrower is responsible for paying all interest that accrues throughout the life of an unsubsidized loan. During in-school status, deferment, and forbearance periods, the borrower may choose to pay the interest charged on the loan or allow the interest to be capitalized. loans with a first disbursementThe process of sending the proceeds of an educational loan to Boston University Student Accounting Services, usually at the start of each semester. occurring after June 30, 2024 and prior to July 1, 2025 is 6.53%, fixed for the life of the loan.
| Dependent StudentA student applicant for financial aid who is required to provide parent information on the FAFSA form. Here’s a link to information on who is and is not required to provide parent information on the FAFSA. Annual Loan Limits | First-Year | Sophomore | Junior | Senior |
| SubsidizedA Subsidized Federal Direct Student Loan is made on the basis of the borrower’s financial need (FAFSA) and other specific eligibility requirements. The federal government pays the interest on subsidized loans while the borrower is enrolled at least half time, during the grace period, or during periods of deferment. Only | $3,500 | $4,500 | $5,500 | $5,500 |
| SubsidizedA Subsidized Federal Direct Student Loan is made on the basis of the borrower’s financial need (FAFSA) and other specific eligibility requirements. The federal government pays the interest on subsidized loans while the borrower is enrolled at least half time, during the grace period, or during periods of deferment. & UnsubsidizedAn Unsubsidized Federal Direct Student Loan is made to a borrower meeting specific eligibility requirements, but not based on financial need (FAFSA). The borrower is responsible for paying all interest that accrues throughout the life of an unsubsidized loan. During in-school status, deferment, and forbearance periods, the borrower may choose to pay the interest charged on the loan or allow the interest to be capitalized. Total | $5,500 | $6,500 | $7,500 | $7,500 |
You can review annual and aggregate federal loan limits on the Federal Student Aid website.
Additional Unsubsidized Loan Limits
Independent undergraduate students may be eligible to borrow additional unsubsidized loans. First-Year students and Sophomores may be eligible to borrow an additional $4,000/year while Junior and Seniors may be eligible to borrow an additional $5,000/year. A dependent undergraduate with a parent who has been credit denied for a Federal Parent PLUS Loan may also be eligible for the higher unsubsidized loanAn Unsubsidized Federal Direct Student Loan is made to a borrower meeting specific eligibility requirements, but not based on financial need (FAFSA). The borrower is responsible for paying all interest that accrues throughout the life of an unsubsidized loan. During in-school status, deferment, and forbearance periods, the borrower may choose to pay the interest charged on the loan or allow the interest to be capitalized. limits.
Origination Fee
An origination fee of 1.057 percent is set by the U.S. Department of Education and deducted from loans with first disbursementThe process of sending the proceeds of an educational loan to Boston University Student Accounting Services, usually at the start of each semester. dates on or after October 1, 2020 and before October 1, 2024. This fee is deducted automatically from amounts borrowed. Thus, the net amount disbursed is less than the loan amount approved.
Maximum Annual Loan
Maximum annual loan amounts are set by federal statute and apply to the total combined subsidizedA Subsidized Federal Direct Student Loan is made on the basis of the borrower’s financial need (FAFSA) and other specific eligibility requirements. The federal government pays the interest on subsidized loans while the borrower is enrolled at least half time, during the grace period, or during periods of deferment. and unsubsidized loanAn Unsubsidized Federal Direct Student Loan is made to a borrower meeting specific eligibility requirements, but not based on financial need (FAFSA). The borrower is responsible for paying all interest that accrues throughout the life of an unsubsidized loan. During in-school status, deferment, and forbearance periods, the borrower may choose to pay the interest charged on the loan or allow the interest to be capitalized..
Maximum Cumulative Loan
The maximum cumulative (aggregate) subsidizedA Subsidized Federal Direct Student Loan is made on the basis of the borrower’s financial need (FAFSA) and other specific eligibility requirements. The federal government pays the interest on subsidized loans while the borrower is enrolled at least half time, during the grace period, or during periods of deferment. and unsubsidized loanAn Unsubsidized Federal Direct Student Loan is made to a borrower meeting specific eligibility requirements, but not based on financial need (FAFSA). The borrower is responsible for paying all interest that accrues throughout the life of an unsubsidized loan. During in-school status, deferment, and forbearance periods, the borrower may choose to pay the interest charged on the loan or allow the interest to be capitalized. amount is $31,000 (no more than $23,000 of which may be SubsidizedA Subsidized Federal Direct Student Loan is made on the basis of the borrower’s financial need (FAFSA) and other specific eligibility requirements. The federal government pays the interest on subsidized loans while the borrower is enrolled at least half time, during the grace period, or during periods of deferment.) for undergraduate study.