Direct Subsidized/Unsubsidized Loans

Federal Direct Loans are available to students who apply for financial aid using the FAFSA. The interest rates are determined each June for new loans being made for the upcoming award year. Each loan will have a fixed interest rate for the life of the loan. These loans are guaranteed by the federal government. The FAFSA is the only application necessary to receive Federal Direct Loans but you must accept your loans on MaineStreet in order to receive them.

Repayment on Direct Loans is not required until 6 months after the student leaves school, as long as the student remains enrolled at least half-time. Interest accrual while the student is in school is dependent on the type of Direct Loan received (subsidized or unsubsidized).  Unsubsidized Direct Loans will accrue interest while the student is in school.

Interest Rates & Fees

The interest rates for Direct Loans with a first disbursement date on or after July 1, 2021 and before July 1, 2022 are:

  • 3.73% on Subsidized & Unsubsidized Undergraduate Direct Loans
  • 5.28% on Unsubsidized Graduate Direct Loan

The origination fee for a Direct Loan is 1.057% for loans originated on or after October 1, 2020 and before October 1, 2021, as well as for loans on or after October 1, 2021 and before October 1, 2022. For loans originated on or after October 1, 2019 and before October 1, 2020, the origination fee was 1.059%.

Annual and Lifetime Direct Loan Borrowing Limits

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 Award Notification and may be less than the annual maximum:

Grade Level and Dependency Credit Hours Earned Maximum Direct Subsidized Maximum Total Direct Loan(Subsidized and Unsubsidized)
Dependent first-year Less than 24 $3,500 $5,500
Dependent sophomore 24-53 $4,500 $6,500
Dependent junior or senior 54 and above $5,500 $7,500
Independent first-year Less than 24 $3,500 $9,500
Independent sophomore 24-53 $4,500 $10,500
Independent junior or senior 54 and above $5,500 $12,500
Graduate student any credit hours N/A $20,500

 NOTE: Dependent students whose parents are denied a Federal Direct PLUS Loan are eligible for the independent student limits if there is a valid Direct PLUS Loan denial (dated within the last year) on file with our office.

Lifetime Direct Loan Limits

There are also 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

Note: The graduate debt limit includes loans received for undergraduate study.

Loan Repayment and Consolidation

For an in-depth loan repayment calculator, click here.

Some students may want to consider consolidating their federal student loans into a Consolidation Loan. This is an option that has both pros and cons, so be sure you investigate this option carefully. For more information on Consolidation Loans, click here.