Subsidized and Unsubsidized Loans

Subsidized Loans are loans for undergraduate students with financial need, as determined by your cost of attendance minus expected family contribution and other financial aid (such as grants or scholarships). Subsidized Loans do not accrue interest while you are in school at least half-time or during deferment periods.

Unsubsidized Loans are loans for both undergraduate and graduate students that are not based on financial need. Eligibility is determined by your cost of attendance minus other financial aid (such as grants or scholarships). Interest is charged during in-school, deferment, and grace periods. Unlike a subsidized loan, you are responsible for the interest from the time the unsubsidized loan is disbursed until it’s paid in full. You can choose to pay the interest or allow it to accrue (accumulate) and be capitalized (that is, added to the principal amount of your loan). Capitalizing the interest will increase the amount you have to repay.

Subsidized and Unsubsidized Loan Limits

The amount you can borrow through the Federal Direct Loan Program is determined by your dependency status and classification in college. The annual and aggregate loan limits are listed in the charts below.

Loan Limits, Interest Rates, and Fees

Annual loan limits are determined by class (freshman, sophomore, etc.) and dependency status

Annual Loan Limits
Academic Level Dependent Independent
Freshman (0-30 credits) 3,500 ($2,000 Unsubsidized) 3,500 ($6,000 Unsubsidized)
Sophomore (31-60 credits) $4,500 ($2,000 Unsubsidized) $4,500 ($6,000 Unsubsidized)
Junior and Senior (61 credits or more) $5,500 ($2,000 Unsubsidized) $5,500 ($7,000 Unsubsidized)

Aggregate loan limits are the maximum loan amounts a student can receive throughout their academic career. Once the aggregate loan limit is met, the student becomes ineligible for Federal Direct Loans.

Aggregate Loan Limits
Subsidized Loan Limit Unsubsidized Loan Limit Combined Loan Limits
Dependent $23,000 $8,000 $31,000
Independent $23,000 $34,500 $57,500

The interest rate varies depending on the type of loan and the first disbursement date of the loan. The table below provides interest rates for loans first disbursed on or after July 1, 2022.

Interest Rates
Interest Rates for Direct Loans First Disbursed on or after July 1, 2023, and before July 1, 2024
Subsidized Unsubsidized Direct Parent Plus
6.53% 6.53% 9.08%

Federal Direct Loans have loan fees that are a percentage of the total loan amount. The loan fee is deducted from each loan the borrower receives; meaning, the amount that is received will be less than the amount borrowed. The borrower is responsible for repaying the full amount of the loan. The table below provides the loan fees for loans first disbursed on or after October 1, 2020 and before October 1, 2023

Fees
Fees for Direct Loans first disbursed on or after October 1, 2020 and before October 1, 2024
Loan Type Borrower Type Loan Fee
Direct Subsidized and Direct Unsubsidized Loans Undergraduate 1.057%
Direct PLUS Loans Parents of Dependent Students 4.228%

To Apply for a Subsidized and Unsubsidized Loan

  1. Complete a FAFSA (Free Application for Federal Student Aid)
  2. Complete Loan Entrance Counseling and Master Promissory Note (MPN)
    1. Log in to the Federal Student Aid site
    2. Click on Loans and Grants (top menu)
    3. Click on Loan Entrance Counseling
      1. Click I'm an Undergraduate Student, then click Start
    4. Once you have completed your Entrance Counseling, go back and click on Loans and Grant to complete the MPN
    5. Click on Master Promissory Note (MPN)
      1. Click I'm an Undergraduate Student, then Start

To Be Eligible You Must

  • Be a U.S. citizen, national or permanent resident
  • Be enrolled at least half-time
  • Not have defaulted or owe a refund to any previous aid program
  • Maintain satisfactory academic progress

First Time Borrowers

First-time Direct Loan borrowers must go to the Federal Student Aid site to complete the following:

• Loan Entrance Counseling
• Master Promissory Note (MPN)

30 Day Delay

Per federal regulations, loan borrowers that are first-time borrowers and have never been disbursed a federal student loan at any institution will be required to wait 30 days from the first scheduled day of the term before the first disbursement will be made on the loan.

To Receive Your Subsidized Loan

Documents with RED FLAGS must be resolved. Click on a document for forms. Click on Document Details for more information

Log in to your myBC portal
  1. Click on the Financial Aid tab
  2. Click on Application status
  3. Verify the term - click View Status tab
  4. Click on the - Sub Loan ACCPT/DECLN
  5. The loan amount you are offered is an estimated amount. You may Accept the full loan, Reduce the loan amount, or Decline the offer.

You must maintain a minimum of 6 (six) credits that apply to your program of study to receive the loan.