Federal Direct Loan

Direct Loans are borrowed funds you must repay with interest in which the lender is the U.S. Department of Education.  Direct Loans have low, fixed interest rates which can be used toward paying a student’s educational costs.  The  Direct Subsidized Loan is available to undergraduate students only who demonstrate financial need.  The  Direct Unsubsidized Loan is available to undergraduate and graduate/professional students and is not income or credit-based.

Direct Subsidized Loan Basics

Interest: The interest charged on  Direct Subsidized loans will be paid by the federal government while you are in school enrolled at least half-time, during periods of approved deferment, and during the 6-month grace period before you enter repayment.   You will be responsible for interest charged at all other times.

Repayment:Direct Loans are generally set up to be repaid in monthly installments over a 10-year term and a payment of at least $50 a month, although you can pay off your loan sooner without penalty.  Your loan repayment term and monthly amount will really depend on the total amount borrowed before you enter repayment.  For example, if you borrowed a small amount your repayment term could be shorter than 10 years, while if you borrowed a large amount your monthly payment could be larger than $50.  You begin repaying your loan at the end of a 6-month grace period.   The grace period begins once you graduate, leave school or drop to less than half-time enrollment. 

Activation: You must login to the myNorthridge Portal to accept a loan offer.  Go to the Financial Matters tab and select Accept Loans (within the Financial Aid Essentials box) to access the loan acceptance page.  A loan acceptance tutorial is available at  Loan Entrance Counseling (LEC) must be completed every year and there must be a signed and complete Master Promissory Note on file with the Department of Education before loan funds can be released.

Loan Changes Effective July 1, 2013, for New Student Loan Borrowers

There is now a limit on the maximum period of time, measured in academic years, that you can receive Direct Subsidized loans. In general, you may not receive Direct Subsidized loans for more than 150 percent of the published length of your program.* The new provision for first-time borrowers will take effect on or after July 1, 2013. For additional information, please see the document about time limitation on Direct Subsidized loan eligibility.

*Please note that all financial aid recipients, including Direct Subsidized loan borrowers, must meet Satisfactory Academic Progress requirements.

Loan Changes Effective July 1, 2012

Elimination of Direct Subsidized loan for graduate and professional students

Graduate students will only be eligible for the Direct Unsubsidized loan.

Note: This provision does not apply to students enrolled in a credential or second bachelor program because they are not considered graduate students for financial aid purposes.

For more information, view the Fixed Interest Rate chart for Direct Subsidized and Unsubsidized loans.

Direct Unsubsidized Loan Basics

Interest: Interest on unsubsidized loans is not paid by the federal government. You are responsible for interest that accrues on the loan while you are in school and during the six-month grace period. Interest begins accruing the day the first loan is disbursed. You may choose to make interest only payments while in school, or interest can be capitalized (added to the principal) and paid once you begin the repayment period.

Repayment: All federal Stafford loans must be paid back within 10 years regardless of the total amount borrowed. Repayment begins six months after you graduate, drop below half-time status or withdraw from school. Once you go into repayment, there is a $50 per month minimum payment depending on the total amount of loans accumulated.

Activation: If you want to accept the Stafford loan offered to you, activate the loan on the myNorthridge Portal by going to the "Financial Matters" tab and selecting "Accept Loans" in the "Financial Aid Essentials" box. Loan Entrance Counseling (LEC) must be completed every year at Northridge. You must also have a signed Master Promissory Note (MPN) on file with the Department of Education. If these requirements are not completed, loan funds will not be distributed.

Eligibility Requirements

  • Subsidized: Available to students eligible for need-based financial aid. Select the "Subsidized Basics" tab for additional updates that affect first-time direct subsidized loan borrowers as of July 1, 2013.
  • Unsubsidized: Available to students regardless of income.
  • Students must apply for financial aid using the Free Application for Federal Student Aid (FAFSA).
  • Students must be U.S. citizens or eligible noncitizens.
  • Students must be enrolled (or plan to be enrolled) in at least six units, or four units for a master's program.
  • Students must achieve satisfactory academic progress as established by the Financial Aid & Scholarship Department.
  • Students must submit all documents requested by the Financial Aid & Scholarship Department.
  • Students cannot be in default on a student loan or owe a repayment on any grants.
  • Students must complete loan exit counseling if they fail to enroll or enroll in fewer than six units (four units if in a master's program).

Loan Limits

Annual federal Stafford loan limits

The base loan amount may be a combination of subsidized and an unsubsidized loans but will not be more than the established grade level or the cost of education. Graduating seniors who only attend one term may have their loans prorated based on federal regulation by the Financial Aid & Scholarship Department.

Annual federal Stafford loan limits for dependent students
Dependent StudentsBase Subsidized/UnsubsidizedAdditional Unsubsidized Eligibility
Freshman (0-29 units)$3,500$2,000
Sophomore (30-59 units)$4,500$2,000
Junior and senior (60-180 units)$5,500$2,000
Second bachelor's$5,500$2,000
Credential program$5,500$0 (per federal regulation)


Annual federal Stafford loan limits for independent students
Independent StudentsBase Subsidized/UnsubsidizedAdditional Unsubsidized Eligibility
Freshman 0-29 units$3,500$6,000
Sophomore 30-59 units$4,500$6,000
Junior and Senior 60-180 units$5,500$7,000
Second bachelor's$5,500$7,000
Credential program$5,500$7,000
Post-baccalaureate unclassified: master's$5,500$7,000
Master's program$0$20,500
Doctoral program$0$20,500

Aggregate federal Stafford loan limits

The aggregate limit for master's and doctoral students includes the amount borrowed as an undergraduate or credential student.

Aggregate federal Stafford loan limits for students
Dependency StatusSubsidizedMaximum Subsidized and an unsubsidized
Independent (master's and doctoral students only)$0$138,500*

*Due to federal legislative changes, master's and doctoral students are no longer eligible for subsidized direct loans. For a comprehensive review of the federal student loan program, visit the U.S. Department of Education website.