Federal Direct Subsidized & Unsubsidized Loans
How do I apply?
Students must file a Free Application for Federal Student Aid (FAFSA) each year to qualify for a federal student loan. Qualified applicants must be a U.S. citizen or eligible alien. Lake Superior State University evaluates the FAFSA information and determines which types of loans you are eligible for and sends you an Official Offer of Award. First time borrowers will need to complete Entrance Counseling and sign a Master Promissory Note (MPN) prior to loan funds disbursing to their account. Once enrolled at LSSU, students must meet the Satisfactory Academic Progress (SAP) standards to be eligible for additional loans.
What is the difference between Subsidized and Unsubsidized Loans?
Subsidized (Sub.) Loan
The federal government does not charge interest on subsidized loans while a borrower is attending school at least half-time (6 or more credits), during the six-month grace period and during deferments (postponements of repayment). Financial need (determined from the FAFSA) must be shown to receive this type of loan.
Unsubsidized (Unsub.) Loan
For students without financial need, the Direct Loan Program offers Direct Unsubsidized Loans. Unlike the subsidized loan, the federal government charges interest on unsubsidized loans while borrowers are attending school, during the six-month grace period and during deferments. If borrowers do not wish to pay the interest while in school, the interest amounts will be capitalized (added) to the principal loan balance.
Interest Rates and Processing Fees for Subsidized and Unsubsidized Loans:
- 5.50% fixed interest rate for undergraduate loans disbursed between July 1, 2023 and June 30, 2024
- 1.057% origination fee rate for undergraduate loans disbursed on or after October 1, 2023 and before October 1, 2024
Federal Direct Loan Program Limits:
|
Year
|
Dependent
Undergraduate |
Independent
Undergraduate* |
|---|---|---|
| Freshman 0-25 credits earned |
$5,500 No more than $3,500 may be in subsidized loans. |
$9,500 No more than $3,500 may be in subsidized loans. |
| Sophomore 26-55 credits earned |
$6,500 No more than $4,500 may be in subsidized loans. |
$10,500 No more than $4,500 may be in subsidized loans. |
| Junior/Senior 56+ credits earned |
$7,500 No more than $5,500 may be in subsidized loans. |
$12,500 No more than $5,500 may be in subsidized loans. |
| Aggregate Loan Limits(maximum lifetime eligibility) | $31,000 No more than $23,000 may be in subsidized loans. |
$57,500 No more than $23,000 may be in subsidized loans. |
*The independent undergraduate loan limits also apply to dependent students whose parents are unable to borrow under the Parent PLUS loan program.
The Following are sample disclosure statements and borrower rights:
- Plain Language Disclosure for Direct Sub/Unsub Loans
- Direct Sub/Unsub Loan Borrower’s Rights and Responsibilities Statement
- Disclosure Statement for Sub/Unsub.
Due to the processing time, loan requests cannot be honored during the last two weeks of the semester. Please submit any request for Alternative or Direct Loans to the LSSU Financial Aid Office before the last two weeks of the semester.
Effective beginning 2014-15, the LSSU Financial Aid Office will not process a loan for less than $200/year or $100/semester.
