How to Pay for College 2024-2025

FEDERAL DIRECT LOANS

A Federal Direct Loan is money borrowed from the federal government to help pay for your education that must be repaid. Loans are available to undergraduate and graduate students and parents of dependent students. Loan funds are provided through your school.

FEDERAL DIRECT LOAN TYPES

Direct Subsidized Loan

Direct Unsubsidized Loan

Direct Plus Loans

• Based on financial need. • Interest does not accrue while you’re in school. Interest begins accruing after your six-month grace period after you leave school and enter repayment.

• Not based on financial need. • Interest accrues from the time the loan is disbursed until the loan is paid in full.

• For parents of dependent students and students seeking graduate or professional degrees. • Interest begins to accrue from the time the loan is disbursed until the loan is paid in full.

To better understand the cost of borrowing a student loan, ASLA provides the College Cost Calculator Tool at asla.info. Interest rates and origination fees are set by the U.S. Department of Education. The origination fee is the percentage of your loan amount charged by the U.S. Department of Education for processing your loan. For federal student loans, the amount you receive will be lower than the amount you are awarded.

Federal Direct Loan Type

Interest Rate*

Origination Fee*

Subsidized and Unsubsidized Loans for Undergraduate Students PLUS Loans for Parents or Graduate / Professional Students Unsubsidized Loan for Graduate and Professional Student

6.53%

1.057%

9.08%

4.228%

8.08%

1.057%

*The rates and fees shown are for loans disbursed on or after July 1, 2024, and before July 1, 2025.

FEDERAL DIRECT LOAN LIMITS

Graduate and Professional Degree Student

Year

Dependent Undergraduate Student (except students whose parents are unable to obtain PLUS Loans) $5,500 (No more than $3,500 of this amount may be in subsidized loans.) $6,500 (No more than $4,500 of this amount may be in subsidized loans.) $7,500 (No more than $5,500 of this amount may be in subsidized loans.) $31,000 (No more than $23,000 of this amount may be in subsidized loans.)

Independent Undergraduate Student (and dependent students whose parents are unable to obtain PLUS Loans)

$9,500 (No more than $3,500 of this amount may be in subsidized loans.)

$20,500 (Unsubsidized Only.)

First Year

$10,500 (No more than $4,500 of this amount may be in subsidized loans.)

Second Year

$12,500 (No more than $5,500 of this amount may be in subsidized loans.)

Third and Beyond (each year)

$57,500 (No more than $23,000 of this amount may be in subsidized loans.)

$138,500 (No more than $65,500 of this amount may be in subsidized loans. The graduate debt limit includes Stafford Loans received for undergraduate study.)

Maximum Total Debt from Stafford Loans When You Graduate (aggregate loan limits)

Note: These annual loan limit amounts are the maximum yearly amounts you can borrow in both subsidized and unsubsidized loans. You can have one type of loan or a combination of both. Because you can’t borrow more than your cost of attendance minus any other financial aid you’ll receive, you may receive less than the annual maximum amounts. Also, the annual loan limits assume that your program of study is at least a full academic year. 5