Federal Direct Unsubsidized Loan

Issue/Question

What is a Federal Direct Unsubsidized Loan?

Environment

• Federal Loans
• Financial Aid

Resolution

Note: An Unsubsidized Loan is a type of loan that the government does not pay the interest while the student is enrolled

1. The student has the option to either pay the accruing interest monthly or allow the interest to capitalize (to be added to the principal).
2. Required payments do not begin until six months after graduation or six months after the student drops below half-time enrollment. 
3. For the 2019-2020 academic year, the interest rate on
   • Undergraduate Unsubsidized Direct Loans is 4.529% for loans first disbursed on or after July 1, 2019 through June 30, 2020
   • Graduate Students is 6.079%. 
4. There is currently a 1.062% origination fee that is deducted by the federal government on the loan proceeds