The Federal Direct Loan program is a federal aid program that helps you pay some of your educational expenses. This program is available to students with and without financial need.
Federal SUBSIDIZED Direct Loan
This loan is awarded to students who demonstrate financial need. Occidental students may borrow based on their need, year in school, and satisfactory academic progress. When a student is enrolled at least half-time, no repayment of interest or principal is required. For the 2025-2026 school year, this loan has an interest rate of 6.39%.
To complete online entrance counseling or to sign a master promissory note for this loan, please visit www.studentaid.gov.
Federal UNSUBSIDIZED Direct Loan
This loan is available to all students, regardless of their financial need. While the terms of this loan are similar to those noted above, interest accrual is immediate . Students may choose to pay interest while in school or have it capitalized onto the principal balance until they enter repayment. For the 2025-2026 school year, this loan has an interest rate of 6.39% for undergraduate students (graduate and professional rates are different).
To complete online entrance counseling or to sign a master promissory note for this loan, please visit www.studentaid.gov.
Additional Direct Loan Facts
Looking for more detailed information about the Federal Direct Loan Program? Here are some basic guidelines.
Fees
The federal government charges an origination fee when the loans are issued. Therefore, a student borrowing $3,500 in the Subsidized Loan will receive less credited to their student account, disbursed in two installments, one in the fall and one in the spring. For loans disbursed between July 1, 2024–September 30, 2025 the origination fee is 1.057%.
Subsidized vs. Unsubsidized
The main difference between the Subsidized Direct Loan and the Unsubsidized Direct Loan is subsidy.
The federal government pays for the interest on the Subsidized Direct Loan while a student is enrolled at least half-time. Interest on the Unsubsidized Direct Loan accrues from the time the money disburses to the student's account until the time the loan is repaid.
Repayment
Repayment begins six months after graduation, at a minimum of $50 per month. Your actual repayment is determined by the total amount borrowed and interest accrued. In general, there is a maximum of 10 years to repay the loan.
Federal Direct Loan Limits
Annual and grade level limits in the Federal Direct Loan program (subsidized and unsubsidized) are as follows:
|
SCHOOL YEAR |
MAXIMUM SUBSIDIZED |
MAXIMUM UNSUBSIDIZED |
MAXIMUM UNSUBSIDIZED (IF NOT ELIGIBLE FOR SUBSIDIZED) |
|---|---|---|---|
|
FIRST-YEAR |
$3,500 |
$2,000 |
$5,500 |
|
SECOND-YEAR |
$4,500 |
$2,000 |
$6,500 |
|
THIRD-YEAR |
$5,500 |
$2,000 |
$7,500 |
|
FOURTH-YEAR |
$5,500 |
$2,000 |
$7,500 |
|
FIFTH-YEAR |
$5,500 |
$2,000 |
$7,500 |
|
GRADUATE STUDENT |
$8,500 |
$2,000 |
$10,500 |
Maximum aggregate borrowing in the Federal Direct Loan program (subsidized and unsubsidized):
| STATUS | AMOUNT |
|---|---|
| Dependent Undergraduates | $31,000 |
| Dependent Undergraduates whose Parents ineligible for PLUS | $57,500 |
| Independent Undergraduates | $57,500 |
| Graduate Students | $138,500 |
These loan limits apply to the Direct Loan programs only. A student may borrow more than these amounts in any one year (if eligible) and may accumulate more than the aggregates shown by borrowing in different loan programs.
National Student Loan Data System (NSLDS)
All federal student loan information is sent to the National Student Loan Data System (NSLDS). NSLDS is a national database for loans (and grants) awarded to students under Title IV of the Higher Education Act (HEA) of 1965, as amended. NSLDS provides a convenient, central location for borrowers to track federal student loans from approval to repayment. NSLDS can only be accessed by authorized personnel at Occidental College as well as other authorized agencies. To view your federal student loan information from NSLDS, login at studentaid.gov.
Understand how interest is calculated and what fees are associated with your federal student loan.
For more information on federal interest rates and fees, visit Federal Student Aid.