A Federal Direct Subsidized Loan is a low-interest, need-based loan with flexible repayment options.
We encourage your efforts to borrow as little as possible.
Do a little math now to save yourself hundreds or thousands of dollars later! Check out this budget example to help you think about your own budgeting process.
Am I Eligible?
This loan is available to undergraduate students who meet basic eligibility requirements.
The U.S. Department of Education pays the interest on a Direct Subsidized Loan:
While you’re in school at least half-time
For the first six months after you leave school (referred to as a grace period)*
During a period of deferment (a postponement of loan payments)
*Note: If you received a Direct Subsidized Loan that was first disbursed between July 1, 2012, and July 1, 2014,
you will be responsible for paying any interest that accrues during your grace period. If you choose not to pay
the interest that accrues during your grace period, the interest will be added to your principal balance.
See more information about eligibility requirements, interest and fees, repayment option and the latest federal updates here.
Review this checklist for required online processes that you need to complete in order to receive your loan funds.
Compare unsubsidized loans with other types of federal loans.
Watch this short video about responsible borrowing.
What's the Interest Rate?
Your interest rate is determined by the first disbursement date of your loan and your academic level. You can view the latest and previous interest rate information here.
How Much Subsidized Loan Can I Borrow?
Your maximum annual and aggregate borrowing limit depends on your undergraduate grade level and your federally determined dependency status, or your graduate student status. Please note that if you advance from freshman class level to sophomore class level during the academic year, or from sophomore class level to junior class level, you become eligible for increased annual limits. If you wish to have your loan eligibility re-evaluted based on a class level change during the academic year, please contact Cal Student Central.
Remember that you can borrow less than the maximum amount each year. Doing so will help keep your total debt low.
How Do I Apply? When and Where Does it Pay?
Once you’ve decided how much federal loan to borrow, you'll need to complete required online processes before the loan can pay (disburse).
You can also print a Federal Subsidized Loan Checklist for Students to help you keep track of your application progress.
Attending Fall-only: November 30
Attending Fall/Spring or Spring-Only: April 30
Attending Summer Sessions:
Enrollment Periods: Deadline to Complete Loan Process:
WHAT YOU HAVE TO COMPLETE
Accept your loan on CalCentral.
Complete a Master Promissory Note (MPN) at studentloans.gov.
Complete Entrance Loan Counseling at studentloans.gov.
WHAT HAPPENS NEXT?
After 2 to 3 business days, your Master Promissory Note and Entrance Loan Counseling will be received by the Financial Aid and Scholarships Office.
After verifying that you do not have any blocks, that your financial aid application is complete, and that you meet all other basic eligibility requirements, your loan will disburse to your account.
WHERE DOES YOUR LOAN GO?
Your loan disburses to your student account and pays for any outstanding charges that you have for the term that the loan is disbursed.
If there is no outstanding balance on your student account when the loan is paid, or if your loan disbursement is larger than your balance, you will receive a refund.
If you are going to receive a refund, you will get a notification from Billing and Payment Services.
How Do I Cancel Some or All of My Loans?
Within 120 Days of Disbursement
You have the right to cancel all or part of any disbursement of a Federal Direct Loan without being charged interest or other loan fees as long as the cancellation is processed within 120 days of your loan’s original disbursement date to CARS.
To request a cancellation, go to CalCentral. If you are a enrolled for the spring or summer 2018, please complete the following process:
Log into CalCentral.
Choose the “Loans & Work-Study” link from the left menu bar.
Select “Revise Loan Amounts” and enter your changes.
If the deadline has passed, you will not be able to make a change.
When you cancel your loan by reducing the amount, a charge will be applied to your student account within 2 to 3 business days, which may create a balance due. You are responsible for paying this balance.
Don’t send a payment to your servicer if you cancel your loan online. Be prepared to send your payment to your bill.
More Than 120 Days After Disbursement
If it has been more than 120 days since your loan disbursement date, you cannot cancel your loan. However, you can make a payment to your servicer. Locate the servicer’s contact information by logging into your National Student Loan Data System account and clicking on the Financial Aid Review button.
In order to ensure that your payment is applied to a particular loan, you must include a letter with your payment that has specific instructions about how to apply your payment.
For example: "Please apply this $200 payment to my unsubsidized loan first disbursed on 01/10/09, paying off any accrued interest and then applying any remaining payment to the principal of that loan."
Where Can I Get Federal Loan Updates?
Read about the latest legal changes that may affect your loans.