Types of Loans
Federal Direct Loans are available to most students who complete the FAFSA. In order to receive loans, students must complete the FAFSA and accept their loans in MaineStreet every year.
- First-time borrowers must complete the MPN and Entrance Counseling at studentaid.gov to receive loans
- Loan amounts are based on academic grade level and financial need as determined on the FAFSA
- Interest rates are determined prior to the start of each upcoming academic year. Interest rates are fixed for the life of each loan.
- Students must begin making payments at the end of the grace period, or within 6 months of graduating, dropping below half-time enrollment, or leaving school. Interest accrues during the grace period, and there are no penalties for making early payments.
Federal Direct Subsidized Loans
- The federal government subsidizes (pays the interest on) the loan while the student is enrolled at least half-time
- Based on a student’s financial need (including their SAI) as determined on the FAFSA
Federal Direct Unsubsidized Loans
- Interest accrues while the student is in school. The student can choose to either pay the interest while in school or have the interest added to the loan principal to be repaid later.
- Graduate students are only eligible for unsubsidized loans.
Click here for full details on Federal Direct Student Loans.
Alternative student loans are available from private lenders. We strongly recommend that students accept their Federal Direct Loan eligibility before applying for an alternative loan.
- Apply directly through the lender
- Typically requires a credit check and cosigner
- Deferred payment options may be available
- Interest rates vary
If you do not accept your full Federal Direct Loan eligibility, certification of your alternative loan could be delayed. Contact our office if you have applied for an alternative loan and do not wish to borrow your Federal Direct Loan.
Questions to ask a lender before applying for an alternative loan:
- Is there a minimum amount I have to borrow?
- Are payments required while I’m in school?
- What is the interest rate? Is it fixed or variable?
- What are the repayment terms?
- Can the loan be used to pay for prior balances?
Use ELMSelect’s lender comparison tool to begin researching alternative loan options.
Federal Direct PLUS Loans are provided by the Department of Education to graduate students and parents of dependent undergraduate students.
Students must file a FAFSA each year in order to be eligible for a PLUS Loan.
- Apply directly at studentaid.gov
- Requires a credit check
- Undergraduate students whose parent borrower is denied a PLUS loan may be offered additional federal loans.
- Deferred payment options are available
- Payments are deferred automatically for graduate students
- Repayment schedule is over 10 years
- Interest rates are fixed each year
How to Apply
Parent Borrowers:
- Go to https://studentaid.gov and log in using the parent borrower’s name, SSN, Date of Birth, and FSA ID.
- Choose option Request a PLUS Loan. This process will determine whether you are approved or denied,
- If you are approved, you must choose the option Complete Master Promissory Note (new borrowers and borrowers who use an endorser need to complete the MPN)
Graduate Student Borrowers:
Go to https://studentaid.gov and log in using the graduate student’s name, SSN, Date of Birth, and FSA ID.
- Choose option Request a PLUS Loan. This process will determine whether you are approved or denied
- If you are approved, you must choose the option Complete Master Promissory Note (new borrowers and borrowers who use an endorser need to complete the MPN)
Federal Direct Loan Rates and Fees:
The interest rates for Direct Loans with a first disbursement date on or after July 1, 2025 and before July 1, 2026 are:
- 6.39% on Subsidized & Unsubsidized Undergraduate Direct Loans
- 7.94% on Unsubsidized Graduate Direct Loans.
The origination fee for a Direct Loan is 1.057% for loans originated on or after October 1, 2020.
Federal Direct PLUS Loan Rates and Fees:
PLUS Loans with a first disbursement date on or after July 1, 2025 and before July 1, 2026 will have an interest rate of 8.94%.
The origination fee for a Federal Direct PLUS Loan is 4.228% on or after October 1, 2020.
Full details on historic Federal Loan Interest Rates and Fees
Federal regulations specify the maximum Federal Direct Loan amount any student can borrow each academic year, depending upon grade level. Actual eligibility is specified on the University of Maine Financial Aid Offer, and may be less than the annual maximum:
| Annual Loan Limits by Grade Level | Dependent Students (except students whose parents are unable to obtain PLUS Loans) | Independent Students (and dependent undergraduate students whose parents are unable to obtain PLUS Loans) |
|---|---|---|
| First-Year Undergraduate (0-23 credits) | $5,500-No more than $3,500 of this amount may be in subsidized loans. | $9,500-No more than $3,500 of this amount may be in subsidized loans. |
| Second-Year Undergraduate (24-53 credits) | $6,500-No more than $4,500 of this amount may be in subsidized loans. | $10,500-No more than $4,500 of this amount may be in subsidized loans. |
| Third Year and Beyond Undergraduate (54+ credits) | $7,500 per year-No more than $5,500 of this amount may be in subsidized loans. | $12,500-No more than $5,500 of this amount may be in subsidized loans. |
| Graduate or Professional Student | Not Applicable (all graduate and professional degree students are considered independent). | $20,500 (unsubsidized only). |
| Subsidized and Unsubsidized Aggregate Loan Limit | $31,000-No more than $23,000 of this amount may be in subsidized loans. | $57,500 for undergraduates-No more than $23,000 of this amount may be in subsidized loans. $138,500 for graduate or professional students-No more than $65,500 of this amount may be in subsidized loans. The graduate aggregate limit includes all federal loans received for undergraduate study. |
There are lifetime limits regarding how much Direct Loan you can borrow. The limits, effective July 1, 2008, are as follows:
| Grade Level and Dependency | Maximum Direct Subsidized | Maximum Total Direct Loan (Subsidized and Unsubsidized) |
| Dependent undergraduate | $23,000 | $31,000 |
| Independent undergraduate | $23,000 | $57,500 |
| Graduate student | $65,500 | $138,500 |
Master Promissory Note
The Master Promissory Note (MPN) is a legal document in which you promise to repay your loans(s) and any accrued interest and fees to the U.S. Department of Education.
It also explains the terms and conditions of your loan(s), including how interest is calculated, when interest is charged, available repayment plans, and deferment and cancellation provisions.
Loan Entrance Counseling
First-time borrowers of Federal Direct loans must complete entrance counseling before UMaine can release the loan. Entrance counseling is also required for Federal Grad PLUS loan borrowers who never previously borrowed a Federal Grad PLUS loan.
Entrance counseling ensures that the borrower understands the terms and conditions of the loan, as well as borrower rights and responsibilities.
Plus Loan Denial
If a parent is denied a Parent Direct PLUS Loan, students may be eligible for additional Direct Unsubsidized Loans. Students will be offered additional direct loan eligibility in MaineStreet if our office receives notification from the Department of Education that a Parent PLUS Loan application has been denied.
Manage your federal loans
Log into StudentAid.Gov to keep track of your federal loans, grants, and work-study. This is where you can identify your servicer and learn how to make payments.
Loan exit counseling
Exit Counseling is an online educational course for borrowers of Federal Direct, Federal Grad PLUS, and Federal Perkins loans.The counseling is require for all borrowers who are no longer attending, or are currently registered for less than six credits. Exit Counseling needs to be completed even if you are planning to continue your education at another institution.
During Exit Counseling, you will learn about the following:
Loan Forgiveness
In certain situations, you can have your federal student loans forgiven, canceled, or discharged.
Borrower rights and responsibilities
Your rights as a borrower
Your responsibilities as a borrower