The Catholic University of America

Federal Direct Student Loans

Federal Direct Loans are low-interest loans from the U.S. Department of Education and are administered by Catholic University. It is the U.S. Department of Education's major form of self-help aid and is available through the William D. Ford Federal Direct Loan Program. There are two types of Federal Direct Loans: subsidized and unsubsidized.  The primary difference between the two loans is the point at which interest begins to accrue:

  • Subsidized Loan interest is paid by the federal government while the student is enrolled. Interest begins to accrue and the student's six-month grace period begins when the student borrower graduates, ceases to be enrolled, or drops below half-time enrollment.
  • Unsubsidized loan interest begins to accrue at the time of disbursement. Borrowers can pay the accumulating interest while in school or may capitalize the interest.

Your financial aid package may include a combination of subsidized and unsubsidized loans. All Federal Direct Student Loans are disbursed in two equal portions, half in the fall and half in the spring. A student must be enrolled at least half time while meeting all basic eligibility requirements (including Satisfactory Academic Progress) in order to receive a Federal Direct Student Loan. You will begin to repay your loan at the end of a six-month grace period that begins once you graduate, leave school or drop below half-time enrollment.


Direct Loan Fixed Interest Rates 2019-2020:

  Subsidized Unsubsidized*
Undergraduate 4.53 percent 4.53 percent
Graduate N/A 6.08 percent
  • Federal Direct Subsidized Loans for Undergraduate students is fixed at 4.53 percent. (Subsidized loans do not accrue interest until loan repayment begins, upon graduation or student is enrolled less-than half-time.)
  • Federal Direct Unsubsidized Loans for Undergraduate students is fixed at 4.53 percent. (Unsubsidized loans accrue interest from the time the loan is disbursed.)
  • The interest rate for Federal Direct Unsubsidized Loans for Graduate students is fixed at 6.08 percent.
* The U.S. Department of Education's Direct Loan Servicer will send you a quarterly loan interest statement.

 Direct Loan Fees

In addition to interest, a Loan Origination Fee of 1.062 percent is charged of the principal amount of each subsidized and unsubsidized Federal Direct Student Loan received. The U.S. Department of Education will deduct the fee before the loan disburses, so the loan amount disbursed will be less than the amount originally borrowed. Students are responsible for repayment of the entire amount, including the fee.

For any loan disbursement for a loan where the first disbursement is/will be… The origination fee percentage for Direct Subsidized Loans and Direct Unsubsidized Loans is…
On or after October 1, 2018 and before October 1, 2019 1.062
On or after October 1, 2019 and before October 1, 2020 1.059


Steps to Obtain a Federal Direct (Subsidized or Unsubsidized) Loan at Catholic University

Step 1: Complete the Free Application for Federal Student Aid (FAFSA). After Catholic University receives your FAFSA and if you are eligible for a Federal Direct Loan, it will be included in your financial aid package.

Step 2: Accept your Federal Direct Student Loan(s) in Cardinal Station at using the Username and Password that were mailed to you when you applied. Should you need this information again, you can contact the Computer Help Desk at 202-319-4357.

Step 3: (First-time Federal DIRECT Loan borrowers at Catholic University only) Complete a Federal Direct Loan Master Promissory Note (MPN) with the U.S. Department of Education's at  Once on the site you should select the Complete New MPN for Student Loans option, and then select Subsidized/Unsubsidized. Follow the steps to complete the note. If you are experiencing technical difficulty signing the Master Promissory Note online, please contact the Department of Education's customer service center for borrowers toll-free at 800-557-7394.

Step 4: (First-time Federal DIRECT Loan borrowers at Catholic University only) Complete a Federal Direct Loan Entrance Loan Counseling session at If you are a first-time borrower of a Federal Direct Student Loan at Catholic University, you must complete an entrance loan counseling session so that you will know your rights and responsibilities as a borrower. The online session will take you about 20 minutes to complete.

Important: Your Federal Direct Loan will not disburse to your student account unless you complete all of the steps.


Requesting a Reduction, Cancellation or Reinstatement of a Federal Direct (Subsidized or Unsubsidized) Loan

To request an reduction or to cancel, please complete a Federal Direct Loan Reduction Request available on the Forms page.

To request an increase, please complete a Federal Direct Loan Stafford Increase Request available on the Forms page.

Direct Loan Limits

The federal government sets limits on the amount of money a student can borrow. Catholic University awards students that have filed the FAFSA the maximum amount eligible under such limits. The annual limit applies to the most a student can borrow in an academic year, while the aggregate limit applies to the maximum a student can borrow in a lifetime. Independent students and dependent students whose parent is denied a Federal Direct PLUS loan are eligible for an additional Federal Direct Unsubsidized Loan.

Below is a chart of annual and aggregate loan limits for the Federal Direct Loan Program

Annual Limits for Federal Direct Loans

  Completed Credits Subsidized Unsubsidized Total
Dependent Undergraduate        
Freshman 0 - 29 $3,500 $2,000 $5,500
Sophomore 30 - 59 $4,500 $2,000 $6,500
Junior & Senior 60+ $5,500 $2,000 $7,500

Independent Undergraduate        
Freshman 0 - 29 $3,500 $6,000 $9,500
Sophomore 30 - 59 $4,500 $6,000 $10,500
Junior & Senior 60+ $5,500 $7,000 $12,500

Graduate N/A N/A $12,000 $20,500

Aggregate Limits for Federal Direct Loans

  Subsidized Total (Subsidized & Unsubsidized)
Dependent Undergraduate $23,000 $31,000
Independent Undergraduate $23,000 $57,500
Graduate N/A $138,500


Direct Loan Exit Counseling

The federal government requires that students participate in Loan Exit Counseling prior to leaving or graduating from college so that you will know your rights and responsibilities. During Exit Counseling, you will also be given information about deferment and forbearance options and how to get the necessary forms. Even though you have a six-month grace period, the Exit Counseling process will help you set up a repayment plan, a direct withdrawal and a payment date. The Department of Education hosts Direct Loan Exit Counseling at The online session should take about 20 minutes to complete.


Direct Loan Repayment

Repayment of the Federal Direct Loan begins six months after the student graduates, or ceases to be enrolled at least half time. Generally, you'll have from 10 to 25 years to repay your loan, depending on which repayment plan you choose.

The Direct Loan Servicing Center will notify you of the date your first payment is due. If you do not choose a repayment plan, the U.S. Department of Education will place you on the Standard Repayment Plan, with fixed monthly payments for up to 10 years. Most Direct Loan borrowers choose to stay with the Standard Repayment Plan, but there are other options for borrowers who may need more time to repay or who need to make lower payments at the beginning of the repayment period. For additional information about the available repayment plan options or to change your repayment plan option as well as a repayment plan calculator, visit the


Direct Loan Deferment and Forbearance

A deferment is a postponement of payment on a loan, during which interest does not accrue if the loan is subsidized. If you can't make your scheduled loan payments, but don't qualify for a deferment, you may be able to receive a forbearance. A forbearance allows you to temporarily stop making payments on your loan, temporarily make smaller payments, or extend the time for making payments. For additional information, visit the


Direct Loan Consolidation

There may be advantages to consolidating (combining) your federal student loans into one loan, starting with the convenience of making a single monthly payment. Consolidation generally extends the repayment period, resulting in a lower monthly payment. This may make it easier for you to repay your loans. However, you will pay more interest if you extend your repayment period through consolidation since you will be making payments for a longer period of time. Direct Loans provides an online consolidation calculator that you can use to find out how much you'll pay each month if you consolidate. Contact the Direct Loan Consolidation Center for more information at 1-800-557-7392 or at


Loan Forgiveness

The U.S. Department of Education (DOE) offers several loan forgiveness program for Teachers and Public Service.  For information go to


Additional Direct Loan Information

Contact the Federal Direct Loan Servicing Center toll-free at (800) 848-0979.