Federal Direct Loans
Direct Loans, from the William D. Ford Federal Direct Loan Program, are low-interest loans for eligible undergraduate and graduate students to help cover the cost of higher education. These federal loans are borrowed directly from the U.S. Department of Education at participating schools. These loans do not require a credit check. A small origination fee is withheld from the loan when it is disbursed to you.
Types of Direct Loans
Direct Subsidized Loans
Direct Subsidized Loans are available to undergraduate students who demonstrate financial need based on the results of the Free Application for Federal Student Aid (FAFSA). You are not charged interest on these loans while you are in school at least half-time and during deferment periods. Graduate students are not eligible for subsidized loans
Direct Unsubsidized Loans
Direct Unsubsidized Loans are available to students regardless of financial need (although the FAFSA must still be filed). Interest accrues on an unsubsidized loan from the time it is first disbursed to you. You can pay the interest while you are in school or allow it to accrue and be capitalized (added to the principal of the loan) upon repayment.
2025-2026 Interest Rates for loans disbursed July 1, 2025 - June 30, 2026
| Type of Loan | Undergraduate Students | Graduate Students |
|---|---|---|
| Subsidized | 6.39% Fixed Interest Rate | N/A - Graduate students are not eligible for subsidized loans |
| Unsubsidized | 6.39% Fixed Interest Rate | 7.94% Fixed Interest Rate |
Borrowing Limits
- Annual Borrowing Limits
Academic Level Dependent Students Independent Students Freshman (0-29 hours) $5,500 $9,500 Sophomore (30-59 hours) $6,500 $10,500 Junior & Senior (60+ hours) $7,500 $12,500 Graduate Student N/A $20,500 Students are offered Federal Direct Loans based on their academic level at the time the financial aid offer is created. Students who change academic levels after their offer has been created must contact our office to request an increase in loan eligibility based on their new academic level. This will not be completed automatically.
For example, the annual Direct Loan limit for a freshman is $5,500. If, after fall grades have been posted, the student has completed enough credit hours to be considered a sophomore ($6,500 annual limit), they could contact our office to have their Direct Loans increased to sophomore level standing for the spring semester.
To request an increase, please contact our office by phone at 319-273-2700 or email fin-aid@uni.edu.
- Aggregate (Lifetime) Borrowing Limits
Student Type Aggregate Loan Limit Dependent Undergraduate $31,000 Independent Undergraduate $57,500 Graduate Student $138,500
Online Loan Requirements
There are two online requirements direct loan borrowers must complete on the Federal Student Aid website. These must be completed or your loan will not pay out.
Loan Deferment
Federal student loan borrowers are eligible to have their loans deferred while enrolled at least half-time (6 credit hours for undergraduates, 5 credit hours for graduates). The deferment process for all federal student loan programs is done automatically, based on enrollment following the first 2 weeks of each semester, and thereafter periodically during the semester.
To check on the status of your federal loans, please contact your federal loan servicer.