Direct Loans

Loans help cover the cost of college.

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

You are considered for Direct loans when you complete the Free Application for Federal Student Aid.

The amount of loan funds you are eligible for depend on the following grade level, dependency status, cost of attendance, and need.

If you decide to borrow loans, you will need to complete the following

  • Entrance Loan Counseling
  • Master Promissory Note (MPN)
  • Exit Loan Counseling

Annual and Aggregate (Total) Loan Limits for Direct Loans

  Dependent
Undergraduate
Independent
Undergraduate
Graduate
Freshman
(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
Sophomores
(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).

Federal Loan Origination Fees

Loan fees have had small reductions for loans disbursed on or after October 1, 2020 and before October 1, 2023.

  • 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%

FAQs

Office of Financial Aid & Scholarships

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