How to Pay for College 2026-2027

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. • For loans first borrowed on or after July 1, 2026, Parent PLUS Loans are limited to $20,000 per year per student and $65,000 total per student. • 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 Student Loan Estimator 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

6.52%

1.057%

Graduate / Professional Students

8.07%

1.057%

PLUS Loans For Parents

9.07%

4.228%

*The rates and fees shown are for loans disbursed on or after July 1, 2026, and before July 1, 2027.

FEDERAL DIRECT LOAN LIMITS

Graduate and Professional Degree Student (Professional programs includes law, medicine, dentistry, etc.)

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)

Graduate: $20,500 Professional: $50,000

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

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.)

Graduate: $100,000 Professional: $200,000

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

Note: These annual loan limits are the maximum amounts you may borrow in Direct Subsidized and/or Unsubsidized Loans. Actual eligibility may be less based on your cost of at tendance and other financial aid received. Annual limits assume your program of study is at least a full academic year. Graduate and professional students are eligible only for Direct Unsubsidized Loans and are subject to separate aggregate loan limits. Students with prior federal graduate borrowing may be subject to different borrowing limits. 5