Direct Loans are borrowed funds you must repay with interest in which the lender is the U.S. Department of Education. Direct Loans have low, federal interest rates which can be used toward paying a student’s educational costs. The Direct Subsidized Loan is available to undergraduate students only who demonstrate financial need. The Direct Unsubsidized Loan is available to undergraduate and graduate/professional students and is not income or credit-based. For more information on Federal Direct Loans go to https://studentaid.gov/sa/types/loans/subsidized-unsubsidized .
Direct Subsidized Loan Basics
Interest: The interest charged on Direct Subsidized loans will be paid by the federal government while you are in school enrolled at least half-time, during periods of approved deferment, and during the 6-month grace period before you enter repayment. You will be responsible for interest charged at all other times.
For more information, view the Federal Interest Rate chart for Direct Subsidized and Unsubsidized loans.
Repayment: Direct Loans are generally set up to be repaid in monthly installments over a 10-year term and a payment of at least $50 a month, although you can pay off your loan sooner without penalty. Your loan repayment term and monthly amount will really depend on the total amount borrowed before you enter repayment. For example, if you borrowed a small amount your repayment term could be shorter than 10 years, while if you borrowed a large amount your monthly payment could be larger than $50. You begin repaying your loan at the end of a 6-month grace period. The grace period begins once you graduate, leave school or drop to less than half-time enrollment.
Activation: You must login to the CSUN Portal to accept a loan offer. Go to the Financial Matters tab and select Accept Loans (within the Financial Aid Essentials box) to access the loan acceptance page. A loan acceptance tutorial is available at http://www.csun.edu/financialaid/tutorials. There must be a signed and complete Master Promissory Note on file with the Department of Education before loan funds can be released. First tome borrowers at CSUN must also complete Loan Entrance Counseling (LEC). If these requirements are not completed, loan funds will not be distributed.
Loan Changes Effective July 1, 2013, for New Student Loan Borrowers
There is now a limit on the maximum period of time, measured in academic years, that you can receive Direct Subsidized loans. In general, you may not receive Direct Subsidized loans for more than 150 percent of the published length of your program.* The new provision for first-time borrowers will take effect on or after July 1, 2013. For additional information, please see the document about time limitation on Direct Subsidized loan eligibility.
*Please note that all financial aid recipients, including Direct Subsidized loan borrowers, must meet Satisfactory Academic Progress requirements.
Loan Changes Effective July 1, 2012
Elimination of Direct Subsidized loan for graduate and professional students
Graduate students will only be eligible for the Direct Unsubsidized loan.
Note: This provision does not apply to students enrolled in a credential or second bachelor program because they are not considered graduate students for financial aid purposes.
Direct Unsubsidized Loan Basics
Interest: Interest on unsubsidized loans is not paid by the federal government. You are responsible for interest that accrues on the loan while you are in school and during the six-month grace period. Interest begins accruing the day the first loan is disbursed. You may choose to make interest only payments while in school, or interest can be capitalized (added to the principal) and paid once you begin the repayment period.
For more information, view the Federal Interest Rate chart for Direct Subsidized and Unsubsidized loans.
Repayment: Direct Loans are generally set up to be repaid in monthly installments over a 10-year term and a payment of at least $50 a month, although you can pay off your loan sooner without penalty. Your loan repayment term and monthly amount will really depend on the total amount borrowed before you enter repayment. For example, if you borrowed a small amount your repayment term could be shorter than 10 years, while if you borrowed a large amount your monthly payment could be larger than $50. You begin repaying your loan at the end of a 6-month grace period. The grace period begins once you graduate, leave school or drop to less than half-time enrollment.
Activation: You must login to the CSUN Portal to accept a loan offer. Go to the Financial Matters tab and select Accept Loans (within the Financial Aid Essentials box) to access the loan acceptance page. A loan acceptance tutorial is available at http://www.csun.edu/financialaid/tutorials. There must be a signed and complete Master Promissory Note on file with the Department of Education before loan funds can be released. First time borrowers at CSUN must also complete Loan Entrance Counseling (LEC). If these requirements are not completed, loan funds will not be distributed.
Eligibility Requirements
- Subsidized: Available to students eligible for need-based financial aid. Select the "Subsidized Basics" tab for additional updates that affect first-time direct subsidized loan borrowers as of July 1, 2013.
- Unsubsidized: Available to students regardless of income.
- Students must apply for financial aid using the Free Application for Federal Student Aid (FAFSA).
- Students must be U.S. citizens or eligible noncitizens.
- Students must be enrolled (or plan to be enrolled) in at least six units, or four units for a master's program.
- Students must achieve satisfactory academic progress as established by the Financial Aid & Scholarship Department.
- Students must submit all documents requested by the Financial Aid & Scholarship Department.
- Students cannot be in default on a student loan or owe a repayment on any grants.
- Students must complete loan exit counseling if they fail to enroll or enroll in fewer than six units (four units if in a master's program).
Loan Limits
Annual Federal Direct Loan Limits
The base loan amount may be a combination of subsidized and an unsubsidized loans but will not be more than the established grade level or the cost of education. Graduating seniors who only attend one term may have their loans prorated based on federal regulation by the Financial Aid & Scholarship Department.
| Dependent Students | Base Subsidized/Unsubsidized | Additional Unsubsidized Eligibility |
|---|---|---|
| Freshman (0-29 units) | $3,500 | $2,000 |
| Sophomore (30-59 units) | $4,500 | $2,000 |
| Junior and senior (60-180 units) | $5,500 | $2,000 |
| Second bachelor's | $5,500 | $2,000 |
| Credential program | $5,500 | $0 (per federal regulation) |
| Independent Students | Base Subsidized/Unsubsidized | Additional Unsubsidized Eligibility |
|---|---|---|
| Freshman 0-29 units | $3,500 | $6,000 |
| Sophomore 30-59 units | $4,500 | $6,000 |
| Junior and Senior 60-180 units | $5,500 | $7,000 |
| Second bachelor's | $5,500 | $7,000 |
| Credential program | $5,500 | $7,000 |
| Post-baccalaureate unclassified: master's | $5,500 | $7,000 |
| Master's program | $0 | $20,500 |
| Doctoral program | $0 | $20,500 |
Aggregate Federal Direct Loan Limits
The aggregate limit for master's and doctoral students includes the amount borrowed as an undergraduate or credential student.
| Dependency Status | Subsidized | Maximum Subsidized and Unsubsidized |
|---|---|---|
| Dependent | $23,000 | $31,000 |
| Independent | $23,000 | $57,500 |
| Independent (master's and doctoral students only) | $0 | $138,500* |
*Due to federal legislative changes, master's and doctoral students are no longer eligible for Subsidized Direct Loans. For a comprehensive review of the federal student loan program, visit the U.S. Department of Education website.