The U.S. Department of Education’s Federal Direct Loan Program offers loans that need to be repaid, with interest, after a student graduates or leaves college. Students are considered for Federal Direct Loans upon completing the Free Application for Federal Student Aid (FAFSA).

Federal Direct Subsidized Loans

These loans are for undergraduate students only and are need-based. They are:

• Reserved for students who have demonstrated financial need as determined by the FAFSA
• The government pays interest on Federal Direct Subsidized Loans during periods of at least half-time enrollment, and periods of deferment
  • After that, the interest is the student’s responsibility

More information about Federal Direct Subsidized Loans is available on the Federal Student Aid website.

Federal Direct Unsubsidized Loans

These loans are not a need-based program. They are:

• Available to all eligible students regardless of how much financial information is reported on the FAFSA. Students are responsible for the interest on a Federal Direct Unsubsidized Loan as soon as UConn disburses the funds
• Students can choose to pay the interest while they are still in school or defer interest payments until they drop below half-time status
• If a student chooses the second option, the interest that accrues while they are in school will capitalize (e.g. added to the principle balance) upon entering repayment

More information about Federal Direct Unsubsidized Loans is available on the Federal Student Aid website.

Helpful tools to understanding your responsibilities as a Federal Direct Loan borrower, your current loan debt, and future eligibility amounts can be accessed via https://studentaid.gov/asla/

Aggregate Loan Limit

A limit on the total amount of FFEL or Direct Subsidized Loans and/or Unsubsidized Loans that you may borrow for undergraduate and graduate study. If the total amount you receive over the course of your education reaches the aggregate loan limit, you will not be eligible to receive additional loans. However, if you repay some of your loans to bring your outstanding loan debt below the aggregate loan limit, you could then borrow again, up to the amount of your remaining eligibility under the aggregate loan limit. To review the aggregate loan limits that pertain to you, please visit: https://studentaid.gov/understand-aid/types/loans/subsidized-unsubsidized#how-much-can-i-borrow.

The following chart shows the annual loan limits for subsidized and unsubsidized loans.

Dependent Students

• The base amount may consist of Subsidized Federal Direct Loans, Unsubsidized Federal Direct Loans, or a combination.To be eligible for additional Unsubsidized Federal Direct Loan funds, parent applicants must be deemed to have adverse credit for borrowing a Parent PLUS Loan from the U.S. Department of Education, or the family must demonstrate extenuating circumstances as to why a credit approved Parent PLUS Loan cannot be satisfactorily repaid and be approved by the Office of Student Financial Aid Services.
• The U.S. Department of Education charges a loan fee for Federal Direct Loans. This fee is deducted from the loan by the U.S. Department of Education before the funds are applied to the student’s University account. Current rates are available on the Federal Student Aid website.

Independent Students

• If an individual is an independent undergraduate student, or a dependent student whose parents have applied for, but were denied a PLUS Loan, they may be eligible for an additional Unsubsidized Federal Direct Loan.
• However, a student may never borrow more than the cost of education minus financial aid received.The base amount may consist of Subsidized Federal Direct Loans, Unsubsidized Federal Direct Loans, or a combination.

Transfer Students

• Initial offers are based on a student’s projected grade level as determined by the Office of Undergraduate Admissions.
• Upon a final credit assessment, a student’s grade level may change. The change may result in a revision to their original financial aid award package.
• Loan funds may not be disbursed until the final credit evaluation is complete.

All borrowers are required to complete documents with the U.S. Department of Education before funds can be released to pay the fee bill:

Master Promissory Note (MPN)

Entrance Counseling

Loan Debt

The U.S. Department of Education’s StudentAid.gov site is a tool students can use to track their federal student loan debt (not including any Private Education Loans they may have borrowed). On this site, students can conduct a Financial Aid Review, view their lender information, and determine who currently services each of their federal student loans.

It is important students pay close attention to their award notices and disclosure statements from their Direct Loan Servicer(s) to best keep track of their federal loan debt.

Repayment of Loans

When a student begins attending less than half-time, plans to graduate, or stops attending the University, they must complete Student Loan Exit Counseling. The purpose is to ensure they understand their student loan obligations and are prepared for repayment.

Students can select from available payment plan options for Federal Direct Loans. Keep in mind that student loans do not have a prepayment penalty, so no matter which plan a student chooses, they always have the right to pay extra! More information on each of repayment plans is available on the Federal Student Aid website.

If an individual’s federal student loan debt is high relative to their income and family size, they may be eligible for an income-driven repayment plan. These plans are designed to make student loan debt more manageable by reducing the monthly payment amount. Additional information is available on the Federal Student Aid website.

More information on managing student loan payments, including what to do if an individual is having trouble making payments, can be found in our Financial Literacy site.

To learn more about understanding the options and responsibilities for repayment of loans, please visit the Federal Student Aid website.

For an estimate of monthly payments, please visit the Loan Repayment Simulator.

As of September 30, 2017, no additional loans will be available under the Federal Perkins Loan Program

• Federal Perkins Loans are borrowed from and repaid to the University of Connecticut. More information is available here.
• Questions or issues with Perkins Loans should be direct to UConn’s Federal Perkins Loan Office by e-mail or phone (860) 486-4835.
• Upon exit from the University of Connecticut, all Perkins Loan borrowers must complete a separate session of Exit Counseling through UConn’s contracted vendor ECSI.

Parents of dependent students may apply for a Federal Direct Parent PLUS Loan. More information about these loans is available on the parent plus loans page.

Private/Alternative Education Loans are non-federal loans made by private lenders. More information about these loans is available on the Private/Alternative Educational Loans section.