William D. Ford Federal Direct Loans

William D. Ford Federal Direct Loans are low-interest loans for students and parents to help pay for the cost of a student's education. The lender is the U.S. Department of Education. The first step in applying is to complete the Free Application for Federal Student Aid (FAFSA) and then complete a Master Promissory Note (MPN).

Several types of William D. Ford Federal Direct Loans are available:

  • Direct Subsidized and Unsubsidized Loans - Direct subsidized loans are for students with financial need, as determined by filing the FAFSA form. No interest is charged on a direct subsidized loan while enrolled in a degree-seeking program, registered at least half-time. Direct unsubsidized loans are not based on financial need so interest is charged during all periods on an unsubsidized loan.
  • Direct PLUS Loans - Direct PLUS loans are low-interest loans available to parents of dependent students to help pay for the student's educational expenses. Interest is charged on the Direct PLUS loan during all periods.
  • Direct Consolidation Loans - Direct Consolidation loans are loans for borrowers who have completed their studies and want to combine different eligible federal student loans into one Direct Consolidation loan.

The following charts provide the maximum annual and lifetime loan amounts which can be borrowed through the William D. Ford Federal Direct Loan program.

Dependent Student Annual Loan Limits Sub + Unsub Total
Freshmen (0-29 credits) $3,500 + $2,000 $5,500*
Sophomore (30-59 credits) $4,500 + $2.000 $6,500*
Junior/Senior (60+ credits) $5,500 + $2,000 $7,500*
Independent Student Annual Loan Limits Sub + Unsub Total
Freshmen (0-29 credits ) $3,500 + $6,000 $9,500 *
Sophomore (30-59 credits) $4,500 + $6,000  $10,500 *
Junior/Senior (60+ credits)  $5,500 + $7,000  $12,500 *
Graduate $20,500 Unsubsidized Loans Only $20,500 *

 *  (Loan limits may be subject to proration when taking less than three terms per year)

Maximum Aggregate Life-time Loan Limits Sub + Unsub
Dependent Undergraduate $31,000 
Independent Undergraduate $57,500 
Graduate  $138,500 

Private Alternative Loans

Private alternative loans are educational loans available from outside lenders to help students in good credit standing to cover additional educational expenses over and above what regular financial aid may not cover. Students should always apply for federal financial aid first by filling the Free Application for Federal Student Aid and take out low interest Federal Direct (Title IV) loans first before considering taking out alternative loans. Title IV loans may be more favorable than the terms and conditions of private alternative loans. Due to federal regulations and a vast changing credit market, we are unable to give specific information or recommendations about lenders who may offer these types of loans. We do suggest that students investigate their personal banking institution and check out various lenders on the internet to compare rates and benefits that best suit their needs.