Direct Loans

The U.S. Department of Education offers low-interest loans to eligible students to help cover the cost of college or career school.

In the Direct Loan Program, you work with the Office of Financial Aid & Scholarships at the University of Michigan-Dearborn and the Direct Loan Program of the U.S. Department of Education. 

UM-Dearborn Code of Conduct for Student Loans

Once your Direct Loan has been originated, it will be serviced by a select group of loan servicers who are committed to helping student borrowers.  While your servicer be the agency that you contact for information about deferments, payments, and trouble in repaying your loan, your loans are still owned by the U.S. Department of Education through the Direct Loan Program.

Do you know who your loan servicer is?  You should establish your account access online once you receive your initial contact.  If you don't know who your servicer is, visit and click on the LOG IN button and access My Federal Student Aid. You will need to enter some basic identity information and you will be able to contact information for your servicer, but also how much you have borrowed as well as interest accrued to date.  Great information and easy for you to access! Easy to read display of information.

Annual and Aggregate (Total) Loan Limits for Direct Loans

(0-24 credits)
$5,500 (only $3,500 can be in subsidized loans) $9,500 (only $3,500 can be in subsidized loans) Up to $20,500 in unsubsidized loans
(25-54 credits)
$6,500 (only $4,500 can be in subsidized loans) $10,500 (only $4,500 can be in subsidized loans)  
Juniors and Seniors
(55 credits and above)
$7,500 (only $5,500 can be in subsidized loans) $12,500 (only $5,500 can be in subsidized loans)  
Maximum Total Debt From Stafford Loans Upon Graduation $31,000 (only $23,000 can be in subsidized loans) $57,500 (only $5,500 can be in subsidized loans) $138,500 (only $65,500 can be in subsidized loans)

Graduate loan debt will also include all Stafford Loans received as an undergraduate.

Federal Loans Interest Rates

Effective July 1, 2021: New Interest Rates for 2022-2023

  • The interest rate for Subsidized and Unsubsidized Direct Loans is a variable fixed rate of 4.99% for undergraduates 
  • The interest rate for Unsubsidized Direct Loans is a variable fixed rate of 6.54% for graduate students loans 
  • The interest rate for Parent PLUS Loan is a variable fixed rate of 7.54% 
  • The interest rate for the Graduate PLUS is a variable fixed rate of 7.54%

If you have subsidized loans, you won't be charged any interest as long as you are enrolled at least half-time (6 credits undergraduate and 4 credits graduate) or during authorized periods of deferment.

If you have unsubsidized loans, you will be charged interest from the day the loan disbursed until it is repaid. You are able to pay interest on a quarterly basis even if you are not required to make monthly loan payments. If you do not pay the interest while in school, grace or authorized deferment periods, your interest will capitalize (your unpaid interest becomes additional loan principal).

Effective July 1, 2022, interest rates on Federal Student loans will increase by about 1.25% for loans disbursed between July 1, 2022 and June 30, 2023.

Federal Loan Origination Fees

Loan fees have had small reductions for loans disbursed on or after October 1, 2020 and before October 1, 2022.

  • The loan fee for Direct Subsidized Loans and for Direct Unsubsidized Loans will be 1.057%
  • The loan fee for Direct PLUS Loans (for both parent and graduate and professional borrowers) will be 4.228%


Office of Financial Aid & Scholarships

1183 - James C. Renick University Center
4901 Evergreen Road
Dearborn, MI 48128
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