Federal Direct Student Loan Program

University of Maryland Global Campus participates in the William D. Ford Federal Direct Student Loan program, which offers long-term, low interest loans from the U.S. Department of Education. This is the largest federal aid program and the one you’re most likely to find in your aid offer.

Note: Students must be enrolled at least half-time to be eligible for a direct loan disbursement.

Subsidized and Unsubsidized Loans

There are two types of Federal Direct Student Loans: subsidized and unsubsidized. The primary difference is the point at which interest begins to accrue. Your financial aid award may include a combination of subsidized and unsubsidized loans. For example, a freshman with a subsidized loan of $500 may also receive an offer of an unsubsidized loan for $3,000 to meet the annual limit for a freshman.

Subsidized Loans

No interest will accrue on a subsidized loan, and no principal will be due until the end of the six-month grace period that will begin when you graduate, leave the university or drop below half-time enrollment (6 credits). Subsidized loans are awarded to undergraduate students who demonstrate financial need.

Unsubsidized Loans

Interest on an unsubsidized loan begins on the day the loan is disbursed and continues until the day that you repay the loan in full. You can pay the accumulating interest while you are in school; during the grace period; during deferment; or you have the option of capitalizing the interest (adding unpaid, accumulated interest to the total unsubsidized amount borrowed when you begin repayment). Capitalizing the interest may give you a way to postpone making interest payments, but it also increases the total cost of your unsubsidized loan.

Annual and Aggregate Loan Maximums

Direct Loan Annual Limits

The amount you can borrow annually depends on your grade level, as determined by your earned units.

Grade Level Earned Credits Dependent Undergraduate Student Independent Students


$5,500—a maximum of $3,500 can be subsidized

$9,500—a maximum of $3,500 can be subsidized



$6,500—a maximum of $4,500 can be subsidized

$10,500—a maximum of $4,500 can be subsidized



$7,500—a maximum of $5,500 can be subsidized

$12,500—a maximum of $5,500 can be subsidized



$7,500—a maximum of $5,500 can be subsidized

$12,500—a maximum of $5,500 can be subsidized





Subsidized and Unsubsidized Aggregate Loan Limit


$31,000—no more than $23,000 of this amount may be in subsidized loans

$57,500 for undergraduates—no more than $23,000 of this amount may be in subsidized loans
$138,500 for graduate or professional students—no more than $65,000 of this amount may be in subsidized loans (the graduate aggregate limit includes all federal loans received for undergraduate study)

You are independent if you meet at least one of the following conditions:

  • Are 24 years of age of older;

  • Enrolled in a masters or doctorate program;

  • Legally married at the time you sign your FAFSA application;

  • Have children or other dependents who receive more than half of their support from you now and through June 30 of the year in which you receive financial aid;

  • Have legal dependents other than a spouse or children who receive more than half their support from you;

  • Are a foster child, or ward of the court after the age of 13;

  • Are a legally emancipated minor with documentation of the court judgment (emancipated minor is a formal legal status that must be declared in a court of law. Simply moving out of your parents’ household does not count. A judge must legally declare you emancipated. The court order must still be in effect when you file your FAFSA);

  • Are in legal guardianship as determined by a court;

  • Are homeless (Homeless is defined as lacking fixed, regular, adequate housing. This includes living in shelters, hotels, cars, etc.);

  • Are a veteran of the Armed Forces;

  • Are currently serving on active duty in the Armed Forces for other than training purposes.

The Cost of Borrowing

As of October 1, 2020, you will pay 1.057 percent of your Direct Student Loan proceeds to the U.S. Department of Education as a loan origination fee. This fee will be deducted from each disbursement before it is credited to your university account.

The Interest Rate

Loan type Borrower type Loans first disbursed on or after July 1, 2020 and before July 1, 2021 Loans first disbursed on or after July 1, 2021 and before July 1, 2022
Direct Subsidized Loans




Direct Unsubsidized Loans




Direct Unsubsidized Loans

Graduate or Professional



Entrance Loan Counseling

When you are a new borrower of a Federal Direct Student Loan at UMGC, you must complete an entrance loan counseling session so that you will know your rights and responsibilities as a borrower. The online session will take you about 20 minutes to complete. You will only need to complete this information once.

Promissory Note

Borrowing from the Direct Loan program requires the completion of an Electronic Master Promissory Note. While attending UMGC you can use the E-MPN for multiple loans over one or more academic years. You will only need to complete this information once.

What is a Master Promissory Note?

Exit Loan Counseling

UMGC student borrowers who have taken out subsidized and unsubsidized Direct Loans, Grad PLUS loans, and/or Federal Consolidated loans must complete an online exit counseling session when they graduate, withdraw, or drop below half-time enrollment. Exit counseling helps borrowers understand their repayment plan options and their rights and responsibilities in the loan repayment process.

Log in with your Federal PIN or FSA ID to start the exit counseling process and then select "Complete Counseling" and "Exit Counseling."

Note: Exit counseling is not the same as the Financial Awareness Counseling (FAC) tool, which can be found on the same website. Using the FAC will not fulfill your exit counseling requirement, nor will taking a demo counseling session.

For further assistance, please consult the Direct Loan Exit Counseling Guide.


You will begin to repay your loan at the end of a six-month grace period that begins when you graduate, leave school, or drop below half-time enrollment (6 credits). Learn more about loan repayment.

Other Federal Loans

Review information on the need-based Federal Perkins Loan program.

Explore a loan for your dependent child's education.

Learn about using Federal loans for graduate studies.