Federal Direct Loans
The most common type of loans are Federal Direct loans. To be eligible for federal loans, the student must submit a FAFSA. TASFA students are not eligible for federal loans. Direct loans are generally offered to students based on federal limits and regulations. The student must be enrolled at least half time (6 hours for undergrad, 4 hours for graduate) in order to be eligible for Direct loans. The student is not required to make payments on Direct loans until the student graduates or drops below halftime enrollment. There is a six month grace period for most loans. PLUS loans have no grace period. Students enter repayment once they are fully disbursed but may be eligible for a deferment. Students would need to contact their loan servicer for more information.
For detailed information about Direct loans, visit: Direct Loans website.
Subsidized Direct Loan
The subsidized loan is only available to undergraduate students who demonstrate financial need as calculated from the FAFSA. This loan has an interest subsidy in which the government pays for the interest accrual while the student is enrolled at least half time. Interest begins accruing as soon as the student falls below half time enrollment.
Unsubsidized Direct Loan
The unsubsidized Direct loan is available to undergraduate and graduate students, and there is no requirement to demonstrate financial need. The student is responsible for the interest that begins accruing as soon as the loan is disbursed.
Parent PLUS Loan
Graduate/Professional PLUS Loan
Interest Rates and Charges
All Direct loans with an initial disbursement on or after 10/01/20 and before 10/01/23 will have a loan origination fee of 1.057%.
All Direct Plus loans with an initial disbursement on or after 10/01/20 and before 10/01/23 will have a loan origination fee of 4.228%.
Yearly and Aggregate Limits for Direct Loans
The maximum amounts available to borrow each academic year are set by the U.S. Department of Education. The amount offered for the academic year includes the fall, spring, and summer semesters.* The University of Houston-Downtown will determine how much of each type of loan the student is eligible for based on factors such as financial need, other financial aid awards, enrollment, and estimated cost of attendance. The maximum awards are shown below.
Dependent (Undergraduate) Student Limits:
| CLASSIFICATION | ANNUAL SUBSIDIZED MAX |
ANNUAL UNSUBSIDIZED MAX |
ANNUAL COMBINED MAX |
|---|---|---|---|
| Freshman (<30 hours) | $3,500 | $2,000 | $5,500 |
| Sophomore (30-59 hours) | $4,500 | $2,000 | $6,500 |
| Junior/Senior (60+ hours) | $5,500 | $2,000 | $7,500 |
| Post-Bac | $5,500 | $2,000 | $7,500 |
| Aggregate total allowed | $31,000 ($23,000 may be subsidized) | ||
Independent (Undergraduate) Student Limits:
| CLASSIFICATION | ANNUAL SUBSIDIZED MAX |
ANNUAL UNSUBSIDIZED MAX |
ANNUAL COMBINED MAX |
|---|---|---|---|
| Freshman (<30 hours) | $3,500 | $6,000 | $9,500 |
| Sophomore (30-59 hours) | $4,500 | $6,000 | $10,500 |
| Junior/Senior (60+ hours) | $5,500 | $7,000 | $12,500 |
| 2nd Bachelor’s or Teaching Certificate |
$5,500 | $7,000 | $12,500 |
| Aggregate total allowed | $57,500 ($23,000 may be subsidized) | ||
Graduate Student Limits:
| UNSUBSIDIZED LOAN | $20,500 PER YEAR |
|---|---|
| Aggregate total allowed (including undergraduate loans) |
$138,500 ($65,500 may be subsidized)** |
* Financial aid awards are generally offered for the fall and spring semesters only,
so if a student plans to attend summer school, he or she should plan to save some
of the annual amount for summer expenses. For more information see summer financial aid section.
**Effective July 1, 2012, graduate students are no longer eligible to receive Direct
Subsidized loans. The aggregate limit for subsidized loans for graduate students includes
amounts that were received as an undergraduate or prior to July 1, 2012 only.
Subsidized Loan Limits based on Program Type
Past borrowers who paid off their loan debt on or before July 1, 2013 or first time borrowers after July 1, 2013 are subject to a limit on the maximum period of time they may receive subsidized loan. The limit is measured in academic years and is 150% of the published length of your program. For example, if you are enrolled in a four-year bachelor’s degree program at UHD, the maximum period of time that you can receive subsidized loans is six years (4 years x 150% = 6 years).
Steps to receive Direct Loans
- Complete the Free Application for Federal Student Aid (FAFSA) online at fafsa.gov. For more information, see How to Apply.
- Submit any required documentation to UHD for processing and awarding of your financial aid. For more information, see Processing your Aid.
- Accept the award online through your e-Services account. For more information, see Accepting Awards.
- For first time borrowers, complete Direct loan Entrance Counseling and sign the Master
Promissory Note online through studentaid.gov
- Entrance Counseling is an online module that explains the loan process and your obligations as a student borrower.
- The Master Promissory Note is valid for ten years, and must be completed prior to disbursement. The MPN includes the terms and conditions of your student loan and is considered your promise to repay the loan. The MPN requires students to list two references who do not share the same last name, address, or phone number as the borrower.
- The student must be enrolled at least half time (6 hours for undergrad, 4 hours for graduate) in order to be eligible for Direct loans.
Exit Counseling and Repayment
Students who are graduating will be required to complete Direct Loan Exit Counseling. Exit counseling is available to complete online through studentaid.gov or in person at our Exit Counseling sessions. Graduating students will receive notification of the Exit Counseling requirement and times and dates of in person sessions by email.