Federal Direct Subsidized & Unsubsidized Loans

A student needs to complete and submit the appropriate year FAFSA to receive consideration for Federal Direct Loans.

Direct Subsidized Loans

Direct Subsidized Loans are available to undergraduate students with financial need. The U.S. Department of Education pays the interest on a Subsidized Loan:

  • while a student is enrolled at least half-time
  • for the first six months after you leave school (referred to as grace period)
  • during a period of deferment (postponement of loan payments)

Direct Unsubsidized Loans

Direct Unsubsidized Loans are available to undergraduate and graduate students regardless of financial need. The student is responsible for paying the interest on the Unsubsidized Loan during all periods. If a student chooses not to pay the interest while enrolled in school and during grace and/or deferment periods, the interest will accrue and be capitalized (added to the principal loan amount).

2022-2023 Federal Direct Loan Interest Rates

The 2022-23 interest rates for Federal Direct Loans disbursed between July 1, 2022, and June 30, 2023, are as follows:

  • Federal Direct Subsidized and Unsubsidized Loans for undergraduate students: 4.99 percent fixed for the life of the loan.
  • Federal Direct Unsubsidized Loan for graduate students: 6.54 percent 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, 2021 till June 30, 2022 is: 1.059%. 

Annual and Aggregate Loan limits

There are annual and aggregate loan limits for students based upon their degree and class level as detailed at the Department of Education Website. For an estimate of your monthly loan payments after you graduate, take a look at the Department of Education’s loan simulator.

Learn more about Federal Subsidized and Unsubsidized Loans

Please click here to learn more about Federal Subsidized Loans.

Master Promissory Note & Entrance Counseling

In addition to completing the FAFSA each year, first-time Direct Subsidized & Unsubsidized loan borrowers at CalArts must complete the two steps below once before the first year they borrow loans: 

  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 - First time borrowers must complete Direct Loan Entrance Counseling before funds can be disbursed.