Federal Direct Loans

Federal Direct Loans are available to eligible students enrolled in an eligible degree program on at least a half-time basis (six credit hours per term).

Students interested in applying for a Federal Direct Loan must:

Complete the Free Application for Federal Student Aid (FAFSA) for the appropriate school year.

Upon receipt of your application materials and your registration for at least a half-time status (at least 6 credit hours), the Office of Financial Aid will review your application and determine your eligibility for loans.  Once the Office of Financial Aid begins releasing offers, you will receive an offer notification advising you of your aid eligibility.  (This information can also be viewed on your BannerWeb account.) You will then need to follow the instructions below to accept or decline all or a portion of your Federal Direct Loans.

To accept or decline your offered loans:

1) First-time borrowers only, complete the Authorization to apply Title IV funds by:

  • Accepting the Authorization of Title IV funds in BannerWeb. To complete your Authorization, follow these instructions.

2) Accept or decline all or a portion of your Federal Direct Loans via BannerWeb. To do so, follow these instructions.

3) First time borrowers only — complete entrance counseling and sign your Master Promissory Note at studentaid.gov.

In order to ensure your loans are processed and applied to your account by the first day of class, complete the above loan requirements at least six weeks prior to the first day of classes. If any of the above requirements are completed after that date, aid will be processed but it may not be available by the first day of class.

There are two categories of Federal Direct Loans:

Direct Subsidized Loans are made to students who demonstrate eligibility for need-based financial aid. The federal government pays the interest that accrues on the Subsidized Loan while the student is enrolled, and payments need not be made until six months after graduation, withdrawal from school, or reduction to less than half-time status.

Direct Unsubsidized Loans are available to those students who do not demonstrate eligibility for need-based aid. Interest does accrue on the Unsubsidized Loan during the student's enrollment. Repayment of principal plus accrued interest begins six months after graduation, withdrawal from school, or reduction to less than half-time status. (Accrued interest may be paid during enrollment, if the student wishes to do so.)

Annual loan limits vary by the student's year in school. The actual loan amount may be reduced by the expected family contribution and/or other aid. Undergraduates may borrow up to the following amounts from the Direct Loan program:

  • Freshmen: $5,500 (no more than $3,500 as a Federal Direct Subsidized Loan)
  • Sophomores: $6,500 (no more than $4,500 as a Federal Direct Subsidized Loan)
  • Juniors and seniors: $7,500 (no more than $5,500 as a Federal Direct Subsidized Loan)

The loan may be subsidized, unsubsidized, or a combination of the two.

Independent undergraduates may also borrow amounts, in addition to the annual loan limits listed above, from the Direct Unsubsidized Loan:

  • Freshmen and sophomores: $4,000
  • Juniors and seniors: $5,000
  • Graduate students may borrow up to $20,500 in Direct Unsubsidized Loan only.

Interest rates are set by the federal government every July 1st for the following year. The interest rate for Federal Direct Subsidized and Direct Unsubsidized Loans for undergraduate students disbursed on or after July 1, 2023, and before July 1, 2024, is 5.50%.  The interest rate for Federal Direct Subsidized and Direct Unsubsidized Loans for undergraduate students disbursed on or after July 1, 2024, and before July 1, 2025, is 6.53%. All loans disbursed on or after October 1, 2020, will have an origination fee of 1.057% deducted from the amount borrowed.

The interest rate for Federal Direct Unsubsidized Loans for graduate students disbursed on or after July 1, 2023, and before July 1, 2024, is 7.05%. The interest rate for Federal Direct Unsubsidized Loans for graduate students disbursed on or after July 1, 2024, and before July 1, 2025, is 8.08%. All loans disbursed on or after October 1, 2020, will have an origination fee of 1.057% deducted from the amount borrowed.

The Standard Repayment Plan allows for a repayment period of 10 years. Alternative repayment plans allowing for a longer repayment period are available.

Upon receipt of the appropriate application materials, the Office of Financial Aid will determine your eligibility and originate your loan. If you have previously borrowed a Direct Loan and signed a Master Promissory Note, then you will not need to sign another Note. New borrowers must sign a Master Promissory Note. First time borrowers must also complete Loan Entrance Counseling. Both may be completed at studentaid.gov.

For academic year loans, two equal disbursements are made — one at the beginning of each semester — through a direct credit to your account with the University of Richmond. For summer session and single term loans, one disbursement is made at the beginning of the term.