The Federal Direct Subsidized Loan is an interest bearing, subsidized federally-insured loan to undergraduate students; however, a student does not start accruing interest on the loan until the graduation or the student is enrolled in less than six (6) credit hours. The student may be awarded the following maximum yearly amounts: freshmen - $3500, sophomores - $4500, and juniors and seniors - $5500. The William D. Ford Direct Subsidized Loan is a need-based loan program, which requires applicants to fulfill need analysis requirements. The aggregate limit for undergraduate study is $23,000.
The Federal Direct Unsubsidized Stafford Loan is a non-need based loan available to undergraduate students. This loan provides an additional $2000 per year for dependent undergraduate students. Unlike the Subsidized Loan, 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 and added to the principal.
The Federal Direct Parent Loan for Undergraduate Students (PLUS) allows the parent of a dependent student to borrow up to the estimated cost of attendance minus other types of aid to pay for educational expenses. Applicants are required to pass a credit check. PLUS loans have a fixed interest rate and an origination fee. Parents are expected to begin making payments on these loans 60 days after disbursement.