Financial Aid & Scholarship Office

Federal Direct Loans

Federal Direct Loans are for undergraduate, credential and post-baccalaureate students enrolled at least half-time. The loans you receive will be either subsidized, unsubsidized, or a combination of both.

  • A subsidized loan is awarded on the basis of financial need. Interest on subsidized loans is paid by the federal government while a student is enrolled at least half-time.
  • An unsubsidized loan is not awarded on the basis of need. You will be charged interest from the time the loan is disbursed until it is paid in full. You may opt to allow the interest to accumulate while you are in school or during other allowable periods of nonpayment. This interest will be added to the principal amount of your loan, and additional interest will be based on that higher amount.

See Federal Direct Loan Limits for loan eligibility. You may apply for additional loans above the amount you have been offered if you have not reached your annual loan eligibility and cost of attendance.

See Federal Direct PLUS Loans(opens in new window) for information on loans for graduate or professional students and loans for parents of dependent undergraduate students.

Interest Rates and Processing Fees

  • Federal Direct Loans have fixed interest rates that that will not change for the life of the loan
  • The loan interest rate depends on when the loan was first disbursed (paid out)
  • Interest rates for the upcoming academic year are adjusted by Congress on June 1
  • There is a loan fee on all Direct Subsidized, Unsubsidized, and PLUS Loans*
  • Most older loans made before July 1, 2006 have variable interest rates that are adjusted each year on July 1
Interest rates for loans first disbursed on or after July 1, 2023, and before July 1, 2024:
Interest rates

Direct Subsidized Loans (Undergraduates)

5.50% fixed

Direct Unsubsidized Loans (Undergraduates)

5.50% fixed

Direct Unsubsidized Loans (Graduate or Professional Students)

7.05% fixed

Direct PLUS Loans (Parents and Graduate or Professional Students)

8.05% fixed

*Processing Fees: There is a loan fee on all Direct Subsidized, Unsubsidized, and PLUS Loans. The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement. The percentage varies depending on the type of loan:

  • Direct Loans: 1.057%
  • Direct PLUS and Graduate PLUS: 4.228%

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Federal Direct Loan Limits

Federal Direct Student Loans Annual Limits
Dependent Undergraduate or PBACAnnual Limit*Aggregate Limit**
Sub & UnsubAdd'l UnsubAnnual Total
First Year (0-29.9 units)$3,500$2,000$5,500$31,000 (no more than $23,000 of which can be subsidized
Second Year (30-59.9 units)$4,500$2,000$6,500
Third Year + (60+ units)$5,500$2,000$7,500
CRED, CCRED$5,500$0$5,500
Independent Undergraduate or PBACAnnual Limit*Aggregate Limit**
Sub & UnsubAdd'l UnsubAnnual Total
First Year (0-29.9 units)$3,500$6,000$9,500$57,500 total (no more than $23,000 of which can be subsidized)
Second Year (30-59.9 units)$4,500$6,000$10,500
Third Year + (60+ units), PBAC, CCRED, CRED, QLGRAD programs$5,500$7,000$12,500
Independent GraduateAnnual Limit*Aggregate Limit**
UnsubAnnual Total
Graduate***$20,500$20,500$138,500 total (undergrad & grad combined)

* Annual limit, or up to the cost of attendance, whichever is less.

**Aggregate limit, or the cumulative limit of Federal Direct Loan allowed for a degree program. Undergraduate aggregate limits are different for dependent and independent students. The aggregate limit for graduate students is separate from the undergraduate limit.

***Graduate students will be eligible for an unsubsidized loan only. The annual limit for Federal Direct PLUS Loans for graduate students will be $20,500.

Note: Dependent students whose parents are unable to obtain a PLUS loan may borrow loan amounts equivalent to an independent student.

Loan amounts for graduating seniors enrolled for one semester only:

- enrolled in fewer than 12 units, loans are prorated down, based on units
- enrolled in more than 12 units, loans are prorated up based on units

First-time Federal Direct Subsidized Loan borrowers (on or after July 1, 2013) will have a time limitation for subsidized loan eligibility. In general, the maximum period of time (measured in academic years) that these students can receive Federal Direct Subsidized Loans is 150% of the published length of their program. Once a student reaches the Subsidized Loan time limitation, he or she may be eligible for Unsubsidized Federal Direct Loans only. Click here for detailed information on calculating Subsidized Loan time limitations(opens in new window).


2023-24 Summer Session Federal Direct Loan Application(opens in new window)

2024-25 Federal Direct Loan Application(opens in new window)

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Loan Entrance Counseling and Master Promissory Note (MPN)

First–time borrowers of Federal Direct Loans must complete Loan Entrance Counseling(opens in new window) and submit a Subsidized/ Unsubsidized Master Promissory Note(opens in new window) (MPN) before the first loan disbursement may be released. The promissory note is your promise to repay loan funds disbursed to you. You are required to submit only one note during your academic career at Chico State.

If you are required to complete and submit a promissory note, you will receive notification by email, and it will appear on your To Do List in your Student Center. Once you complete these items, they will be removed from your "To Do List" within three business days. 

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Loans are generally released in two disbursements, half in fall and half in spring. One-semester loans have a single disbursement. If you are applying for a loan to help cover additional expenses for one semester, as for study abroad, it is possible to arrange for a one semester loan. Contact the Financial Aid and Scholarship Office to explain your needs.

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Grace Period

When you graduate, withdraw, or drop below half-time enrollment, you will be required to take Loan Exit Counseling. This will inform you about your grace period, deferment, forbearance and repayment options. You will have a six-month grace period before you are required to start repaying your federal student loans. Direct PLUS loans do not have a grace period, but borrowers can defer repayment for six months(opens in new window). The repayment period begins when the loan is fully disbursed, and the first payment is due 60 days after the final disbursement.

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The U.S. Department of Education uses several loan servicers for the Federal Direct Loan Program.  When you receive your first Direct Loan, you will be contacted by your loan servicer. You will be notified by the servicers as to where and when to send payments. There are several repayment plans to help you manage this important financial responsibility. You are responsible for beginning repayment on time even if you don’t receive this information. Failing to make payments on your loan can lead to default. Find more details and examples of repayment amounts at

Find out who your loan servicer is: 
Toll free: 1-800-433-3243

Direct Loan Consolidation