Federal Direct Loan (Undergraduate)


Although Penn does not include loans in dependent student’s financial aid packages, this loan can be used by U.S. students to assist with their Expected Family Contribution or to replace their work-study award. Because this is a student loan, repayment is deferred until six months after the student completes their education or ceases to be enrolled at least half-time.

The Federal Direct Subsidized Loan is need-based and offers the most favorable terms for eligible students. Maximum borrowing amounts are different depending on a student’s grade level and status as a dependent or independent student.  See chart below. A subsidized loan means the federal government covers your interest payments while you are enrolled at least half-time.

The Federal Direct Unsubsidized Loan is not need-based and can be used to replace the Expected Family Contribution up to the Cost of Attendance. Interest begins to accrue on this loan after the first disbursement.

How to Apply

Please download the instructions for how to apply

Entrance Counseling

Loan counseling is a required online tool to help you understand your rights and responsibilities as a Direct Loan borrower. You must complete this requirement before you can receive your Direct Loan. In most cases, you will only need to complete entrance counseling once during your degree.

You can complete your entrance counseling requirement at www.studentaid.gov. Select your student population and log in with your FSA ID. Penn will be notified of your completion within 3-5 business days. 

Rates, Fees & Repayment

The interest rate for these loans is 5.50% for loans disbursed between July 1, 2023 and June 30, 2024. Origination fees are currently 1.057%.

Consolidation, deferment (for graduate school), public service loan forgiveness, and income-based repayment options are available for this loan program.

Borrowing Limits

  Annual Maximums for Dependent Students Annual Maximums for Independent Students Maximum Amount that can be subsidized
First year $5,500 $9,500 $3,500
Sophomore $6,500 $10,500 $4,500
Junior/Senior $7,500 $12,500 $5,500
Aggregate Amount $31,000 $57,500 $23,000
Post-Bacc $5,500 $12,500 $5,500

Note: Your total annual borrowing limit may not exceed Penn’s cost of attendance less other financial assistance you receive.

Federal Government Resources

For more information on the Federal Direct Loan program, we recommend this FAQ from Federal Student Aid.

For information on specific Federal Direct Loans you have borrowed, log in the Federal Student Aid website using your FSA ID and password.