Federal Subsidized and Unsubsidized Direct Student Loans (FDSL)
Overview
Subsidized and unsubsidized loans are federal student loans that assist students in paying tuition, fees, and related expenses.
Comparison of Federal Direct Loans
| DIRECT SUBSIDIZED LOAN | DIRECT UNSUBSIDIZED LOAN |
|---|---|
| Undergraduate students demonstrating financial need | Undergraduate and graduate students do not need to prove financial need |
| Institution determines amount that can be borrowed based on Cost of Attendance and other aid received | Institution determines amount that can be borrowed based on Cost of Attendance and expected family contribution (EFC) |
| U.S. Department of Education pays the interest on a Direct Subsidized Loan while you are in school at least half-time | The U.S. Department of Education does not pay the interest on a Direct Unsubsidized Loan while you are in school at least half-time |
| You will not pay interest for six months after you graduate or during deferment | Interest will accrue (accumulate) and be capitalized (that is, your interest will be added to the principal amount of your loan) if you do not pay while attending, during deferment, or forbearance |
Interest Rates for Direct Loans
| loan type | interest rates loans originated july 1, 2023 – june 30,2024 | Interest rates loans originated july 1,2024 – june 30, 2025 |
|---|---|---|
| Undergraduate Direct Subsidized & Unsubsidized Loans | 5.50% | 6.53% |
| Graduate Direct Unsubsidized Loans | 7.05% | 8.08% |
| Parent and Graduate Direct PLUS Loans | 8.05% | 9.08% |
There is a loan fee on all Direct Subsidized, Direct Unsubsidized, and Direct PLUS (Graduate Students/Parents) Loans. The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement. The percentage varies depending on when the loan is first disbursed, as shown in the chart below.
Fees by Loan Type (%)
| loan type | DISBURSED ON OR AFTER 10/1/20 AND BEFORE 10/1/2025 |
|---|---|
| Direct Subsidized and Unsubsidized Loans | 1.057% |
| Direct PLUS (Graduate Students/Parents) | 4.228% |
Federal Direct Subsidized and Unsubsidized Loan Repayment
Repayment can be managed on the website of your loan servicer, which will be assigned to you by the U.S. Department of Education. While the interest rate on the loan is fixed, interest starts accruing on the loan at the time of disbursement to Tarleton State University. Payments can be deferred until after graduation, as long as you are enrolled at least half-time. Accrued interest can either be paid quarterly while you are in school or capitalized (added) to the loan when you enter repayment. You will accrue future interest based on the principle balance while in repayment. The U.S. Department of Education has a Loan Repayment Estimator you can use to help estimate your loan repayment options.
Additional Steps for First-time Borrowers
The Master Promissory Note (MPN) is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the U.S. Department of Education. It also explains the terms and conditions of your loan(s). Unless your school does not allow more than one loan to be made under the same MPN, you can borrow additional Direct Loans on a single MPN for up to 10 years.
Entrance Counseling is a tool to ensure you understand your obligation to repay the loan and agree to the terms of the loan.
You will be notified through myGateway to complete the MPN and Entrance Counseling.
Additional Information
If you have other questions about interest, please email the Office of Financial Aid, or call us at 254-968-9070.
The Department of Education deducts the origination fee before you receive any loan money, so the loan amount you receive will be less than the amount you will have to repay.