Direct Subsidized and Unsubsidized Loans for Students

A Direct Subsidized Loan is available to students who have financial need. A Direct Unsubsidized Loan is an option for students who do not demonstrate financial need. Need is determined by completion of the Free Application for Federal Student Aid (FAFSA).

Prior to July 1, 2010, subsidized and unsubsidized Federal Stafford Loans were available to students through the Federal Family Education Loan Program (FFLEP); however, this program has been discontinued. General information on Stafford Loans is still provided for your reference at CFNC. If you have an existing Stafford Loan(s) through College Foundation, Inc., go to My Loan Status for details.

Direct Subsidized Loans

For the student with financial need, the federal government pays the interest on the subsidized loan while the borrower is enrolled in college at least half time and for six months after enrollment stops. At the end of the six-month grace period, the borrower becomes responsible for the loan interest and repayment.

The Direct Loan amount students may borrow depends on their grade level in school, program length, amount of other financial aid received, dependency status and – in the case of the Direct Subsidized Loan—the amount of their financial need.

Information on Direct Loan limits and interest rates are available at the Federal Student Aid website.

If you have an existing Stafford loan through College Foundation, see interest rates or loan limits information.

Direct Unsubsidized Loans

Student borrowers with no financial need are eligible for Direct Unsubsidized Loan. Interest on these loans is not paid by the federal government and is the responsibility of the student at all times.

Information on Direct Loan limits and interest rates are available at the Federal Student Aid website.

If you have an existing Stafford loan through College Foundation, see interest rates or loan limits information.

How Do New Borrowers Apply for a Direct Loan?

The first step is to complete the Free Application for Federal Student Aid (FAFSA) and have your results sent to the financial aid offices of the schools to which you are applying. Each financial aid office will then determine if you are eligible for a Direct Subsidized or Unsubsidized Loan. If you are eligible, the financial aid office will include the loan and loan amount in your financial aid award package.

Once you choose the school you will attend and accept its offer of financial aid, it will direct you on how to apply for any Direct Loans from the U.S. Department of Education for which you are eligible.

Further information on Direct Loans is available at Federal Student Aid website or by calling the Department of Education at (800)848-0979.