Direct Subsidized & Unsubsidized Loans

Related Pages

About Student Loans
Federal Loan Eligibility
Changes to Federal Student Loans for AY26-27
Direct PLUS Loans

Direct Subsidized and Unsubsidized Loans (sometimes referred to as Stafford Loans) are federal student loans provided by the U.S. Department of Education to help eligible students cover the costs of higher education. You are automatically considered for these loans when you submit your Free Application for Federal Student Aid (FAFSA). Federal direct loans do not require a credit check.

Below is a guide to help you understand the differences between these loans, your borrowing limits, and your repayment options.

 

While both loans share basic eligibility requirements—you must be a U.S. citizen or eligible non-citizen, enrolled at least half-time, maintain Satisfactory Academic Progress, and not be in default on a federal loan—there are key differences in who qualifies and how interest is handled.

Direct Subsidized Loans

  • Who is eligible: Undergraduate students only.
  • Financial Need: Awarded based on federally defined financial need.
  • Interest Accrual: The U.S. Department of Education pays the interest on your loan while you are in school at least half-time, during your six-month grace period after you leave school, and during eligible periods of deferment.

Direct Unsubsidized Loans

  • Who is eligible: Undergraduate, graduate, and professional students.
  • Financial Need: Not based on financial need.
  • Interest Accrual: You are responsible for paying the interest during all periods. Interest begins accruing as soon as the loan is disbursed. You can choose to pay the interest monthly while in school, or let it accrue and be capitalized (added to your principal balance) when you enter repayment

Interest is calculated as a percentage of your unpaid principal balance. Federal student loans also include an origination fee, which is a percentage of the loan amount deducted from each disbursement before the funds are sent to the school.

  • Interest Rates (For loans disbursed after July 1, 2025):
    • Subsidized (Undergraduate): 6.39%
    • Unsubsidized (Undergraduate): 6.39%
    • Unsubsidized (Graduate/Professional): 7.94%
  • Origination Fees: 1.057% for all Direct Subsidized and Unsubsidized loans disbursed before October 1, 2026.

The amount you can borrow each academic year depends on your grade level and whether you are considered a dependent or independent student.

Dependent Undergraduates

  • 1st Year: $5,500 total (Max $3,500 Subsidized + $2,000 Unsubsidized)
  • 2nd Year: $6,500 total (Max $4,500 Subsidized + $2,000 Unsubsidized)
  • 3rd & 4th Year / Post-Baccalaureate: $7,500 total (Max $5,500 Subsidized + $2,000 Unsubsidized)

Independent Undergraduates

  • 1st Year: $9,500 total (Max $3,500 Subsidized + $6,000 Unsubsidized)
  • 2nd Year: $10,500 total (Max $4,500 Subsidized + $6,000 Unsubsidized)
  • 3rd & 4th Year / Post-Baccalaureate: $12,500 total (Max $5,500 Subsidized + $7,000 Unsubsidized)

Graduate & Professional Students (Eligible for Unsubsidized only)

  • Graduate Students: Up to $20,500 maximum per year
  • Graduate Health Professionals: Up to $47,167 maximum per year

 

Congress passed the One Big Beautiful Bill Act (OBBBA) in July 2025, which introduced several changes to these federal student loans for graduate students beginning July 1, 2026. For more information on these changes, please visit Changes to Federal Loans in AY 2026-2027.

Loan funds are disbursed directly to your Columbia University student account, generally in at least two installments across the academic year. These funds are first applied to your tuition, fees, room and board, and other direct school charges. If there is money left over, you may receive a refund.

Both loan types feature a six-month grace period after you graduate, leave school, or drop below half-time enrollment before you must begin making payments.

Please note: Federal student loan repayment options were recently restructured under the "One Big Beautiful Bill Act," passed on July 4, 2025. For new borrowers entering repayment after July 2026, there are two main federal repayment pathways:

  • The Standard Plan: Fixed payments over 10 to 25 years, depending on your total loan balance.
  • The Repayment Assistance Plan (RAP): An income-driven plan requiring payments of 1% to 10% of your Adjusted Gross Income (AGI). It features a 30-year forgiveness timeline, waived interest, and potential supplementary government payments.

(Note for existing borrowers: Those on legacy plans like SAVE, PAYE, or ICR must switch to either IBR or the new RAP by 2028, with most being automatically transitioned to RAP). Visit our Student Loan Repayment page or StudentAid.gov to learn more about navigating these options.

If you receive a federal student loan, you will be required to repay that loan with interest. Interest is calculated as a percentage of the unpaid principal amount that you borrowed. If you don’t pay off interest, it can capitalize, meaning it is added to the principal balance of your loan and future interest is calculated with the higher principal. 

You can learn more about federal student loan interest rates and capitalization from StudentAid.gov.

The following table shows Columbia University’s Cohort Default Rates for federal loans on a three-year period. Data includes the percentage of a school’s borrowers who enter repayment on Direct Loan Program loans during a federal fiscal year (October 1–September 30) and default before the end of the second following fiscal year.

Rates can also be found at NSLDS Official Cohort Default Rate Search for Schools. Use OPEID 002707 for Columbia University in the city of New York.

 

The information in your financial aid file may be disclosed to third parties as authorized under routine uses in the Privacy Act notices called "Title IV Program Files" (originally published on April 12, 2004, Federal Register, Vol 59 p. 17351) and "National Student Loan Data System" (originally published on December 20, 1994, Federal Register, Vol 59 p. 65532). Thus, this information may be disclosed to federal and state agencies, private parties such as relatives, present and former employers and creditors, and contractors of the Department of Education for purposes of administration of the student financial assistance program, for enforcement purposes, for litigation where such disclosure is compatible with the purposes for which the records were collected, for use by federal, state, local, or foreign agencies in connection with employment matters or the issuance of a license, grant, or other benefit, for use in any employee grievance or discipline proceeding in which the Federal Government is a party, for use in connection with audits or other investigations, for research purposes, for purposes of determining where particular records are required to be disclosed under the Freedom of Information Act, and to a Member of Congress in response to an inquiry from the congressional office made at your written request.

DO YOU NEED HELP WITH DIRECT LOANS?

Students and families looking for more information about federal direct loans should first consult StudentAid.gov as a primary resource. You can also contact the Federal Student Aid Information Center (FSAIC) directly at 1-800-433-3243, or visit the webpage to email or receive Live Chat support (requires sign-in).

Students and families who need to complete paperwork to request federal direct loans can also consult with their school's financial aid office. 

If you require assistance with repaying direct loans, please consult our guidance on Student Loan Repayment.

If you require Columbia University assistance beyond the scope of what is outlined above, please contact the Student Service Center at [email protected] or by phone at 1-212-854-4400.