Federal Direct Loans

Federal Direct Loans are awarded to all students who complete a FAFSA, meet eligibility requirements, submit all required documentation, and are enrolled at least half-time. This loan is borrowed by the student and no credit check is required. Students may be offered a Direct Subsidized and/or Unsubsidized Loan based on financial need, which is evaluated using the data reported on the FAFSA.

Direct Subsidized Loans

With a Subsidized Direct Loan, the federal government pays the interest on the loan while the student is in school at least half-time and during authorized periods of deferment. There is a maximum timeframe that students are eligible to borrow Subsidized Loans, which is 150% of the published length of the Undergraduate program a student is enrolled in. To learn more about this federal policy, please click here.

Direct Unsubsidized Loans

For Unsubsidized Direct Loans, students are charged interest from the time the loan is disbursed until it is paid in full. Borrowers may choose to pay the interest while they are in school, or defer payments until the end of their grace period. Any accrued interest will be capitalized and added to the principal amount of the loan at repayment, increasing the amount that must be repaid. If students choose to pay the interest as it accumulates, the long term cost of the loan will be less.

Repayment on Direct Loans begins six months after a student graduates, withdraws, leaves school, or drops below half-time status. 

2024-2025 Federal Direct Loan Interest Rates

The 2024-25 interest rates for Federal Direct Loans disbursed between July 1, 2024, and June 30, 2025, are as follows:

  • Federal Direct Subsidized and Unsubsidized Loans for undergraduate students: 6.53 % fixed for the life of the loan.
  • Federal Direct Unsubsidized Loan for graduate students: 8.08 % fixed for the life of the loan.

Origination Fee

All Direct Subsidized and Unsubsidized Loans are subject federal origination fee which is subtracted from the loan at the time of disbursement. The origination fee for Subsidized and Unsubsidized Loans from July 1, 2020 till June 30, 2025 is: 1.057%. 

Annual Loan limits

The maximum loan amount for which a student may receive in the Direct Subsidized and Unsubsidized Loan program is determined by the student’s grade level.

Grade level is determined based on the number of credits a student has completed. (The following annual maximums apply to undergraduate students.)

Completed Credit Requirements Annual Maximum
0-29 Credits $5,500 (up to $3,500 Subsidized)
30-59 Credits $6,500 (up to $4,500 Subsidized)
60-89 Credits $7,500 (up to $5,500 Subsidized)
90+ Credits $7,500 (up to $5,500 Subsidized)


An Additional Unsubsidized Direct Loan amount is available to students who are either classified on their FAFSA as “independent” according to federal guidelines, or whose parents are denied the Direct Parent PLUS Loan by the Department of Education during the application process. Additional Unsubsidized Direct Loan amounts are as follows:

Completed Credit Requirements Amount     
0-29 Credits $4,000
30-59 Credits $4,000
60-89 Credits $5,000
90+ Credits $5,000

Aggregate Loan limits

The following aggregate maximums apply to undergraduate students.

Condition Maximum
Without Additional Direct Unsubsidized Loan $31,000 ($23,000 Subsidized)
With Additional Direct Unsubsidized Loan $57,500 ($23,000 Subsidized)


The Office of Financial Aid reviews aggregate loan limits prior to awarding loans for the academic year. Students can check the amount of loans they have taken out during their academic careers through the Federal Student Aid website, To access and download your loan history log in with your FSA username and password, hover over your name on the top right of the screen and select "download my aid data" and follow the prompts.

For an estimate of your monthly loan payments after you graduate, take a look at the Department of Education’s loan simulator

Application Process

In addition to completing the FAFSA each year, first-time Direct Subsidized & Unsubsidized loan borrowers at CalArts must complete Entrance Counseling and a Master Promissory Note before they can receive these loans. 

Entrance Counseling is a tool to ensure you understand your obligation the repay loans you agree to borrow. 

A Master Promissory Note (MPN) is a legal document in which you promise to repay your loans and any accrued interest and fees to the U.S. Department of Education. It also explains the terms and conditions of your loans. You can utilize the same MPN for up to 10 years.

You are required to complete the following two steps before your loan can disburse:

  1. Complete a Master Promissory Note (MPN) online:
    Federal Direct Subsidized/Unsubsidized Master Promissory Note (MPN) 
  2. Complete Direct Loan Entrance Counseling:
    Complete Federal Direct Loan Entrance Counseling 


All application steps must be completed at least 30 business days prior to the start of a term which the student wishes to receive aid for. This includes:  

- Filing a FAFSA 
- Submitting any Missing Information requests
- Completing Verification (if applicable)
- Accepting the loan(s) in Financial Aid Self-Service
- Completing the loan process: Entrance Counseling, and Master Promissory Note
- Completing a PLUS application and authorizing a PLUS Loan credit check with the Department of Education (if applicable)

All loans require processing time before the funds will be ready to disburse. Students may receive loan funds for a term only if they are currently enrolled in that term at least half time and loan funds disburse prior to end of that term. If completion of required steps occurs after the 10 business days prior to the end of the term, the Office of Financial Aid cannot guarantee that loan(s) will be processed before the end of the eligible timeframe.

Loan Disclosure

Please note that the borrower has the right to cancel a portion of or the entirety of their loan within 30 days of the disbursement of the funds to the student’s account. After which time it is the borrower’s responsibility to return any unwanted funds to the lender or federal loan servicer. To request a cancellation, please contact the Office of Financial Aid at finaid@calarts.edu and state what loan and amount you would like canceled or reduced.