Paying for College

Questions Families Asked about Federal Student Loans

Learn if Federal Direct Student Loans are related to the FAFSA, what the annual loan limit is, the difference between subsidized and unsubsidized loans, how to pay the interest while in school, if the loan can be deferred in graduate school, and more.
Man using laptop to get answers to questions on Federal Student Loans

Students applying for financial aid who submit the FAFSA will most likely find a Federal Direct Student Loan on their financial aid offers. The loan is awarded only to the students (parents won't find their names on the loan) and it comes with several benefits, including income-based repayment and options for deferment and forbearance. We answer some frequently asked questions about these loans below.

Q: Is the Federal Direct Student Loan related to the FAFSA?

A: Yes, a student will only receive the Federal Direct Student Loan if he or she submits the FAFSA. Every student eligible for federal aid who is enrolled at least half time in an eligible program may borrow a Federal Direct Student Loan.

Q: Is the annual Federal Direct Student Loan limit a combination of subsidized and unsubsidized loans? Or could a freshman get $5,500 from both?

A: The annual Federal Direct Student Loan limit is a combination of subsidized and unsubsidized loans. The limits for each grade level are as follows: $5,500 for freshmen, $6,500 for sophomores, $7,500 for juniors, and $7,500 for seniors. Of those totals, at least $2,000 each year will be unsubsidized. The amount of the subsidized loan depends on the student's financial need and other financial aid offered.

Q: Does everyone get $5,500 in a Federal Direct Student Loan or does it vary depending on the annual income of the parents?

A: Every student who submits the FAFSA is eligible to receive $5,500 (in freshman year) in Federal Direct Student Loans (a combination of subsidized and unsubsidized) regardless of family financial status. That amount increases to $6,500 for sophomore year, $7,500 for junior year, and $7,500 for senior year.

Q: Can you choose to get the Federal Direct Student Loan all subsidized or does the college choose for you?

A: The college financial aid office will determine the amount you're eligible to receive in a subsidized Federal Direct Student Loan. The amount is based on the student's eligibility for financial aid, which is calculated from the student's EFC. A college will subtract the student's EFC from the school's cost of attendance to determine the resulting amount of financial aid eligibility (or "financial need"). Colleges will fill in this amount with financial aid. After the college has offered grants, scholarships, and work-study, any resulting amount can be filled with a subsidized loan.

Q: For the unsubsidized loan, will we receive a statement with an opportunity to pay the interest? When will we receive that? And from who?

A: The unsubsidized loan will accrue interest while the student is in school, but the interest won't be due until after graduation, when the loan repayment begins. However, if you'd like to pay back the interest as it accrues, have the student log in to to find out the loan servicer. The student can contact the servicer to find out the amount of interest that has accrued and how to make a payment.

Q: My daughter wants to go on to medical school. If she does, will her undergraduate loans get deferred while she is medical school?

A: Yes, students may defer their federal loans (but usually not their private loans) if they are enrolled at least half time in graduate school.

Q: I heard my son can get an additional student loan if I don't get approved for a PLUS Loan. Is that true?

A: Yes, if a parent is denied a Federal PLUS Loan, the student can receive an additional $4,000 Unsubsidized Federal Direct Student Loan. Contact the college's financial aid office for more details.

If you have a question about Federal Direct Student Loans that we didn't answer above, feel free to reach out to us. You can call us at (800) 449-MEFA (6332) or email us at

View other federal loan FAQs