Federal Direct Subsidized Stafford Loan

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A Federal Direct Subsidized Stafford Loan is awarded as a need-based loan after grants, scholarships and other resources are subtracted or up to the annual maximum loan limit, whichever is lower. It is the U.S. Department of Education's major form of self-help aid and is available through the William D. Ford Federal Direct Loan Program. The federal government pays the interest on the loan until your repayment begins.  Fees of up to 1.057% will be charged and deducted proportionately from each loan disbursement.

For undergraduate students, the interest rate for  Federal Direct Subsidized loans disbursed between July 1, 2022 - June 30, 2023 is 4.99%. 

As of July 1, 2013 a new law went into effect for any new Direct Stafford Subsidized Loan Borrowers. This law allows you to receive Direct Stafford Subsidized Loans only within 150% of the length of your program of study.  Once you have reached the end of this limit you are no longer able to receive Direct Stafford Subsidized Loans.  For a more detailed explanation of the 150% usage limit, please see the information provided by the Department of Education. 150% Fact Sheet

Federal Direct Subsidized loans are not available for graduate/professional students. 

To Apply for a Federal Direct Subsidized Loan

To apply for a Federal Direct Subsidized Loan, the student must complete the FAFSA. If the student is eligible for a Federal Direct Subsidized Loan, the award amount will be posted on the student’s electronic Award Letter on SalukiNet.

A student is eligible to be considered for the Federal Direct Subsidized Stafford Loan if they:

  • have a valid EFC on file in the Financial Aid Office.
  • are enrolled in an eligible program on at least a half-time basis.
  • are making satisfactory academic progress.
  • have not already borrowed the maximum aggregate Federal Direct Stafford Loan amount.
  • are not ineligible for other reasons.

To Accept/Reduce/Decline a Federal Direct Subsidized Loan

The student must accept or decline a Federal Direct Subsidized Loan on the electronic Award Letter on SalukiNet by selecting “Accept” or “Decline” in the dropdown box on the Award Letter Accept/Decline Awards page.  The student can reduce the loan amount by selecting “Accept” in the dropdown box and entering a lower award amount in the “Partial Accept” field.  If the student wishes to request loan changes, they should use the “Request Changes” on the Award Letter Information Request page of the electronic Award Letter.

The first time a loan is accepted, the student must complete a Electronic Master Promissory Note. The loan will then be credited to the student's SIUC account, divided into two payments for the academic year. The student will also be required to participate in an Entrance Loan Counseling session.

All or part of the loan can be canceled within 90 days of the date the school notifies the student that the loan has been credited to their account.  Loan funds will first be used to pay for tuition, fees, room and board. If funds remain after these charges have been paid, the student will receive the remaining funds by check.