The Federal Direct Loan Program is a loan funded by the federal government to help pay for your education. A student must have a valid Free Application for Federal Student Aid (FAFSA) on file to be eligible for any federal financial aid. A federal student loan is money that you borrow to assist with educational costs that must be repaid with interest. You can borrow less than what is offered to you and you can request more loan funds later (within the same academic year and enrolled at least half-time) if you need it. You should only borrow what you need. Federal student loans offer many benefits compared to other options you may consider when paying for college. Before taking out a loan it is important to understand that a loan is a legal obligation and understand your rights and responsibilities as a borrower.
Federal Direct Subsidized and Unsubsidized Loans (Student Loans)
The type and amount of loans you will be offered will be determined by your financial eligibility as calculated by the federal processor, your Dependency Status, and your grade level. Most students receiving loans must be enrolled in at least 6 units to be eligible. Classified and conditionally classified graduate students meet the enrollment requirement with 4 units. For more information on these loans visit the Federal Student Aid - Loans webpage.
- Subsidized Loans
- These are awarded based on calculated financial need. The federal government pays the interest while you are enrolled at least half-time. The federal government also pays the interest during the 6-month grace period after you graduate, leave school or drop below half-time enrollment and during a period of deferment.
- Unsubsidized Loans
- Unsubsidized loans are for eligible students, regardless of income and assets. You are responsible for paying the interest, but you can have it deferred while you are in college and during the grace period. If you do, the interest will be capitalized, which means that it is added to the principal amount you borrowed. Future interest will be calculated based on the higher loan amount. Therefore, it is to your advantage to pay the interest as you go along, so you will pay less in the long run. You will receive quarterly statements and can choose to pay the amount due or have it deferred.
Interest Rate and Origination Fees
For students not pursuing a master’s degree, the interest rate is a fixed 6.53% for new loans taken out for the 2024-2025 academic year. There is also a 1.057% origination fee. For students pursuing a master’s degree or post-master's certificate, the interest rate is a fixed 8.08% for unsubsidized loans taken out for the 2024-2025 academic year.
How Do I Accept and Complete the Process for a Loan
Read the Viewing and Accepting Your Aid Offer section of the website under the Help Book. Accept your loan offer in your MySSU Portal.
Before you receive your loan funds, you will be required to:
- Complete Loan Entrance Counseling, a tool to ensure you understand your obligation to repay the loan; and
- Sign a Master Promissory Note (MPN), agreeing to the terms of the loan.
Please note: If you have accepted your loan(s) but have not completed the Loan Entrance Counseling or Master Promissory Note by June 30 of the academic year, your loan will be canceled and you will no longer be eligible for the funds.
Annual Student Loan Acknowledgement
A student only needs to complete the MPNs and entrance counseling once while enrolled at Sonoma State. However, all borrowers should complete an Annual Student Loan Acknowledgement each year a new federal student loan is accepted at studentaid.gov. The intent of this process is to help borrowers understand how student loans affect their financial future.
If this is the first time accepting a federal student loan, the borrower is acknowledging that they understand their responsibility to repay the loan.
If the borrower has existing federal student loans, they are acknowledging that they understand how much they owe and how much more they can borrow.
Repayment of Loans
Regardless of your loan type, subsidized or unsubsidized, you do not need to begin repaying your loans until 6 months after you have graduated or your enrollment has dropped below half-time. This 6-month period of time is called your grace period. You only get a one-time grace period for existing loans. If you exhaust your grace period and then enroll half-time again, the next time your enrollment drops below half-time, you will enter repayment immediately. Any new loans borrowed during the most recent enrollment period will have a 6-month grace period, but repayment on the original loans will begin immediately. After your first disbursement is made, your loan will be assigned to a servicer. Your servicer's contact information will always be available to you at the Who’s My Student Loan Servicer? page on the studentaid.gov website.
Through your servicer's website you can create an account for online access, find forms, and view repayment information.
Loan Limits
Loans are subject to annual limits set by the federal Department of Education.
Seniors graduating in the Fall semester are subject to proration of their Direct Loan amount, based on the number of their registered units. This is a federal requirement.
| Grade Level | Dependent | Independent |
|---|---|---|
| Freshman | $5,500 (maximum $3,500 subsidized) | $9,500 (maximum $3,500 subsidized) |
| Sophmore | $6,500 (maximum $4,500 subsidized) | $10,500 (maximum $4,500 subsidized) |
| Junior/Senior, 2nd Bachelor | $7,500 (maximum $5,500 subsidized) | $12,500 (maximum $5,500 subsidized) |
| Credential, Unclassified Grad (taking pre-requisites) | $5,500 | $12,500 (maximum $5,500 subsidized) |
| Graduate Students | N/A | $20,500 (unsubsidized only) |
Federal Lifetime Loan Aggregates
- Total maximum amount of Direct Loans allowed for undergraduates is $57,500, of which no more than $23,000 may be in subsidized funds. Students who are dependent throughout their undergraduate career are further limited to a total maximum amount of $31,000 (no more than $23,000 may be in subsidized funds).
- Total maximum amount of Direct Loans allowed for master’s degree students is $138,500, of which no more than $65,500 may be in subsidized funds.
Direct PLUS Loans
For information on Direct Parent Loans for Undergraduate Students (PLUS) or Direct PLUS Loans, please visit the Federal PLUS Loans page of our website.
Alternative Loans
For information on alternative loans, please visit the Alternative Loans page of our website.