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Federal Direct Subsidized/Unsubsidized Loan


Federal Direct Subsidized/Unsubsidized Loans are low-interest loans for undergraduate and graduate students who complete a FAFSA.


Student must:

  • Have a valid Free Application for Federal Student Aid (FAFSA) on file;
  • Must be fully admitted as a degree-seeking student in an undergraduate or graduate program at Indiana State;
  • Must be enrolled at least half-time when the loan is expected to be disbursed;
  • Must maintain Satisfactory Academic Progress (SAP) standards;
  • Must be a U.S. Citizen or eligible non-citizen;
  • Must not be in default on an educational loan or owe an overpayment on a federal education grant, or other federal debt, or has made satisfactory arrangements to repay that debt;

How To Apply


Federal Direct Subsidized Loans

  • Collect interest at 0% while the borrower is enrolled at least half-time;
  • Collect interest at a fixed APR when the borrower graduates or drops below half-time enrollment;
  • Require an origination fee assessed at disbursement for loans depending on when the loan originates;
  • Require unmet need as defined by the FAFSA;
  • Are only available for undergraduate students.

Federal Direct Unsubsidized Loans:

  • Collect interest at a fixed APR;
  • Require an origination fee assessed at disbursement for loans depending on when the loan originates;
  • Are available for undergraduate and graduate students.

Current interest rates are published annually at

Grade levels listed below have been in effect since Fall 2014. Because the Federal Direct Loan program does not require a credit check, it requires both annual and cumulative (lifetime) limits as listed below:


Repayment / Disbursement of Funds

  • Loan funds are applied to student accounts approximately ten days before the start of the semester.
  • Half of the amount applied for is disbursed at the start of the fall semester and the other half at the start of the spring semester.
  • Funds will first cover direct educational expenses on the student's account.
  • Any excess funds are refunded to the student via ACH direct deposit or sent to the student's permanent address.
  • Loan amounts will be prorated for undergraduate students graduating in December.
  • Borrowers have the right to cancel all or a portion of the loan with no penalty by submitting a loan reduction form within 14 days of disbursement.

To find out more about repayment options before receiving a Direct Loan, borrowers may contact the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243).

In addition, visit repayment.








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